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Asian Market Update – Tuesday: Cryptocurrency prices consolidate after strong rally

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Bitcoin

The Big Question: When can we expect the next short-term bitcoin rally?

Prices of cryptocurrencies pointed lower overnight during the Asian trading session on Tuesday, showing typical signs of a technical consolidation before the next leg up.

At midday in Asia, bitcoin was down 2.27 percent to $5,615. The loss in the price of bitcoin on Tuesday did not even get close to erasing the strong gains made in the past few days since, when bitcoin surged through the $5,000 mark and continued to rally all the way to about $5,850.

The price of ethereum also saw a loss of 1.5 percent loss to $328 at around midday in Asia. Ethereum has performed steadily following the protocol upgrade deployed on Monday, known as the Byzantium hard fork. Tuesday’s fall, though pretty steep, is still smaller than the single-day loss seen on Sunday ahead of the hard fork, when the virtual currency dropped to near the $316 level.

Litecoin on Tuesday saw the biggest loss, trading down 4.66 percent to $61.62. However, litecoin remains above the $60 mark after surging past that on Saturday.

Though losses in the price of the three major cryptocurrencies were far away from erasing the solid gains from the past a few days, talks of wether bitcoin has reached a level where correction is inevitable, have emerged.

Main Market Movers – Mid-day Asian Trading Session

Indexes Value at Midday Daily Change
Japan- Nikkei 225 21,260 0.03%
China-Shanghai Composite Index 3,380 0.06%
China-CSI 300 3,921 0.09%
South Korea-KOSPI 2,486 0.26%
Hong Kong –Hang Seng 28,734 0.15%
Australia-ASX 200 5,893 0.80%

Major Asian equity markets traded slightly higher during Tuesday morning trading, but gains in the main indexes on Tuesday were much smaller than in previous days, showing signs of a weakening rally in Asian stocks.

In China, the Shanghai Composite Index was up 0.06 percent to about 3,380 before midday. The CSI 300 Index, which tracks the 300 largest companies listed in Shanghai and Shenzhen, was up 0.09 percent to 3,921 before midday.

In Hong Kong, the Hang Seng Index edged up 0.15 percent to around 28,734 before midday.

In Japan, the Nikkei 225 was up 0.03 percent to around 21,260.

In South Korea, the Kospi gained a slight 0.26 percent to around 2,486 shortly before midday.

Down Under, the ASX 200 also added 0.8 percent to around 5,893. Aussie stocks saw the biggest gains among major Asian indexes on Tuesday.

The minor gains on Tuesday followed much stronger gains made on Monday in Asian stock markets, boosted by better-than-expected inflation data out of China. China’s consumer price index grew 1.6 percent year-on-year in September, slowing from August’s 1.8 percent, and remained below the 2-percent mark for an eighth straight month.

Currencies

The Japanese yen gained 0.1 percent the US dollar at midday Tuesday to 112.07 per dollar.

The Chinese yuan lost 0.17 percent against the US dollar, to 6.6010 per dollar.

The Australian dollar lost 0.04 percent on the dollar, changing hands at 1.2740 per US dollar at midday.

Commodities

WTI Oil was down 0.23 percent to $51.78 per barrel.

Brent Crude lost 0.16 percent to $57.80 per barrel.

Gold was down 0.08 percent to $1,293 an ounce.

Business News across Asia

In Japan: A data-falsifying scandal for one of the largest steel producers in the country – Kobe Steel is still brewing, as new media reports pointed out on Tuesday, the company has been faking data for more than a decade.

Take away: The company is likely to face further scrutiny and losses in value, after about $1.8 billion was knocked off its market value last week. Losses may also spread to other Japanese companies in the similar industries if the market starts to speculate that this is a widespread practice among Japanese industrial companies.

In China, news reports on Tuesday suggest that Chinese companies – PetroChina and Sinopec – are offering to buy up to 5 percent of Saudi Arabia’s Aramco, per Reuters.

Take away: This would give China a say in the world’s largest oil producer, which has been mulling to issue a record-setting IPO that could raise as much as $100 billion.

Featured image from Pixabay.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.3 stars on average, based on 37 rated postsFredrik Vold is an entrepreneur, financial writer, and technical analysis enthusiast. He has been working and traveling in Asia for several years, and is currently based out of Beijing, China. He closely follows stocks, forex and cryptocurrencies, and is always looking for the next great alternative investment opportunity.




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Analysis

Stocks Go Nowhere Ahead of the Fed

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Global stock markets had a very quiet Tuesday, as traders took a step back before tomorrow much-awaited Fed rate decision. While most of the major indices finished the day virtually unchanged, risk assets gained ground in general, as investors sentiment improved following the slightly nervous Monday session.

DAX 30 Index Futures, 4-Hour Chart Analysis

European and Asian stocks were steadily holding on to last week’s gains, with even the Chinese market settling down with only slight losses, despite the country’s exit from the scheduled trade talks with the US.

On Wall Street, the Nasdaq and the Russell 2000 outperformed the Dow and the S&P 500, signaling a risk-on shift under-the-hood, even as the major indices traded in very narrow ranges in the low-volume low-volatility environment.

EUR/USD, 4-Hour Chart Analysis

Currencies had a much more active season, even as the major pairs didn’t experience real trending moves, before the central bank meeting. The EUR/USD pair, which has been in the center of attention for days finished with small gains after some sudden spikes in both directions, as traders tried to bet on tomorrow’s renewed guidance by the Fed.

In economic news, the US CB Consumer Confidence Index came in above expected at 138.2, a 17-year high, just shy of the all-time high set in 2000, right at the time of the peak of the Dot-Com bubble. On the other hand, the Case-Shiller Housing Price Index missed the already modest consensus estimate, with an only 5.9% yearly price increase, once again confirming the slowdown in the segment in the rising yield environment.

XHB (Homebuilder ETF), 4-Hour Chart Analysis

Shares in the sector are down by 20% on average compared to the January bull market high, and as Treasury yields in the US are still hitting multi-year or even decade-long highs across the yield curve, further pain could be ahead for bulls in the coming months.

That said, a dovish surprise tomorrow could set up a pullback in yields and a possible bounce in the sector, even as the general tightening trend will almost certainly persist for a while.

Rate Hike Near Certainty with All Eyes on the Fed’s Guidance

The odds of the third hike this year by the Fed are almost 100% for tomorrow, but even major changes, and sizeable surprises are possible, with regards to the economic guidance and the Central Bank’s preferred monetary as well.

2-Year US Treasury Yield, 4-Hour Chart Analysis

The US-China trade war could serve as a dovish excuse, despite its limited effects so far, while the US economy provided plenty of ammunition to hawks, such as strong growth, an uptick in some of the key inflation measures, and a tight labor market.

While the 2-Year Treasury yield failed to close at a new cycle high, the short-end of the curve is at a decade-long high, so a bigger surprise could lead to a very volatile afternoon session tomorrow.

Copper Futures, 4-Hour Chart Analysis

Commodities also had a mostly quiet and mixed session with WTI Crude oil slightly retreating off its 10-week high near $73 per barrel and gold holding on near the $1205 level, but copper experiencing more volatility and closing with muted losses after Chinese markets reopened.

Featured image from Shutterstock

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 354 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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Market Overview

Market Update: U.S. Stocks Drift Lower Ahead of Fed; Bakkt Offers Up Physical Bitcoin Futures

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U.S. stocks drifted mostly lower on Tuesday, as traders reduced their exposure to riskier assets ahead of the Federal Reserve’s upcoming policy decision on Wednesday. Crypto markets were down across the board despite getting some positive news from a keenly awaited blockchain startup.

Stocks Mostly Lower

The S&P 500 Index declined 0.1% at 2,915.57, with seven of 11 primary sectors finishing lower. Losses were largely concentrated in utilities and consumer staples. After a strong open, Dow industrials reversed course to finish down 69.71 points, or 0.3%, at 26,492.34.

The technology-heavy Nasdaq Composite Index bucked the downtrend, climbing 0.2% to 8,007.47.

Monetary policy is back in focus on Wednesday as the Federal Reserve concludes its two-day meeting in Washington. Fed officials widely expected to raise interest rates for the third time this year. The policy statement, which will be released at 2:00 p.m. ET, will be accompanied by a quarterly summary of economic projections covering GDP, unemployment and inflation.

Altcoins, Tokens Plunge

The cryptocurrency market lost more than $10 billion in combined value on Tuesday, though losses were largely concentrated in altcoins and tokens. Ethereum, XRP, EOS and XLM – ranked nos. 2, 3, 5 and 6 by market cap, respectively – each fell by at least 10%.

Capital outflows from bitcoin left the digital currency with a loss of 3.9%. BTC was last valued at $6,381 on total trade volumes of $4.5 billion.

After a promising week, cryptocurrencies entered a brief period of consolidation before resuming their slide on Monday. Combined market values are down $24 billion from Friday’s high. While the pullback wasn’t unexpected, given XRP’s massive rally last week, the extent of the selloff offers further evidence of a prolonged bear market that is disproportionately impacting altcoins and tokens.

ICE’s Bakkt Announces Physical Bitcoin Futures

Although bearish forces still control crypto prices, market fundamentals continue to paint a brighter future for digital assets. Case in point: Bakkt, the new cryptocurrency startup created by Intercontinental Exchange (ICE), is set to unveil the first physically delivered bitcoin futures contracts. The announcement, which was confirmed on Tuesday by ICE, will offer new pathways for institutional investors and retail traders to access cryptocurrency.

“Our first contracts will be physically delivered Bitcoin futures contracts versus fiat currencies, including USD, GBP and EUR,” Bakkt tweeted on Tuesday. “For example, buying one USD/BTC futures contract will result in daily delivery of one Bitcoin into the customer’s account.”

ICE’s new crypto platform is set to launch in November. In addition to securitizing crypto assets, Bakkt has partnered with some of America’s biggest companies to bring bitcoin payments to consumers.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 614 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Market Overview

Relatively Vigorous

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Hi Everyone,

Social media is abuzz with the news that Instagram’s founders are leaving the company and handing the keys over to Mark Zuckerberg.

When they initially sold Instagram to Facebook for $1 billion in 2012, Mike Krieger and Kevin Systrom were kept in post, to manage the creative development of the rapidly growing platform.

However, after many clashes with their parent company and its founder over politics and product features, it seems the two are ready to move on to their next adventure.

Several $FB holders that I’ve spoken with recently have shrugged off the recent trend of users migrating away from Facebook by stating that the social network giant has managed to buy out most of the competition.

After the co-founder of WhatsApp famously urged his followers to delete facebook in April, the bigger question now becomes, will Zuckerberg manage to retain the attention of the public while those responsible for building up these platforms are working against him.

Facebook’s stock has had a rather turbulent year so far. It will be interesting to see how the shares open up today.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Knife to Throat Negotiations
  • Don’t Rush Central Bankers
  • Backtracking Crypto Slander

Please note: All data, figures & graphs are valid as of September 25th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Stocks in Asia are down sharply today, as authorities are using vivid imagery as a negotiating tool with the United States.

It’s clear that China is willing to talk and the latest rhetoric seems to be more about respect than leverage. A gentle reminder that it’s difficult to negotiate when you’re backed into a corner.

The China50 index has now revealed a new trading range (solid yellow lines) between 10,750 and 12,000 points. Both of these levels have proven to be critical junctures (dotted yellow lines) over the last two years.

In Japan, on the other hand, stocks are flying as the central bank has offered even more support to the market.

Central Bank Yapping

The Bank of Japan has been among the most aggressive institutions when it comes to monetary policy and quantitative easing. A speech this morning from BoJ governor Kuroda confirms that this attitude isn’t about to change…

This means that, despite printing trillions of Yen and owning more than 75% of Japan’s ETFs, the Bank hasn’t quite accomplished its goals yet.

In a surprise turn of events, Governor Kuroda did acknowledge that there may be side effects to this aggressive policy. Yet, he insists that the bank is ready to ease further if needed.

Over in Europe, Mario Draghi from the European Central Bank is making waves of his own, saying that there has been a “relatively vigorous pick-up in inflation.”

Personally, I’m wondering how to interpret this statement. What does “relatively vigorous” mean, anyway?

Nonetheless, any sort of pick-up in inflation, no matter what adjectives we use to describe it, could move the ECB’s timetable forward. We’re seeing a relatively vigorous pick-up in the Euro, which is now testing $1.18.

Tomorrow, we’ll get a critical interest rate decision from the US Federal Reserve, with the odds in favour of a 0.25% hike. More on that in tomorrow’s update. Trading stands a good chance of being muted going into the announcement.

Crypto Backtracking

As crypto prices seem to be walking back their gains from last week, another financial institution seems to be backtracking on their crypto policy.

The Bank of International Settlements has put out a new study, which reveals that news events regarding crypto regulations do in fact have a fair impact on market prices.

As indicated above, their report includes the following statement…

This represents a complete turnaround in the BIS’s sentiment towards cryptocurrencies and comes in stark contrast to a statement made in February by BIS General Manager…

So not only have they flipped their opinion of whether or not it should be traded, they’re now giving advice to cryptotraders on how to trade. Hooray!!

Have a wonderful day ahead!

Wishing you an amazing weekend ahead!

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.

Best regards,
Mati Greenspan
Senior Market Analyst

Connect with me on….

eToro: @MatiGreenspan | Twitter: @MatiGreenspan | LinkedIn: MatiGreenspan | Facebook:MatiGreenspan

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 130 rated postsSenior Market Analyst at Etoro.com.




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