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Market Overview

Asian Market Update – Tuesday: Ethereum Surges as BTC Dominance Hits All-Time Low

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Fading light

Bitcoin is barely moving as dominance fades.

The top coins in terms of market cap were all up on the second day of 2018, with many traders and analysts around the world coming back from their holidays today.

During afternoon trading in Asia, ethereum was the big gainer among the major coins, trading up by more than 12 percent on Coinbase. As CCN reported yesterday, the bitcoin dominance index has now reached an all-time low with the combined market cap of the top four altcoins – ripple, ethereum, bitcoin cash, and cardano – now surpassing that of bitcoin.

Bitcoin meanwhile was pretty much flat Tuesday morning, trading down from the early hours of Asian trading before it surged back up. Investors are now speculating what path bitcoin will take in 2018 as it becomes increasingly difficult to use as a payment method, but still serves its purpose as a form of ‘digital gold’. However, it is speculated that 2018 will be the year when altcoins take on a bigger role and bitcoin’s dominance in the market fades.

Litecoin also surged Tuesday morning, trading up by nearly 8 percent by the afternoon in Asian trading. Litecoin has been on the rise again since New Year’s Eve, after taking a hit during the last week of 2017.

Main Market Movers – Mid-day Asian Trading Session

Indexes Value at Midday Daily Change
Japan- Nikkei 225 22,764 -0.08%
China-Shanghai Composite Index 3,348 1.24%
Hong Kong –Hang Seng 30,515 1.99%
South Korea-KOSPI 2,467 1.26%
Australia-ASX 200 6,080 -0.06%
S&P 500 E-Mini Futures 2,678 0.37%

Most of the main equity markets in Asia Pacific posted strong gains on Tuesday, led by markets on the Chinese mainland, Hong Kong and South Korea, while markets in Japan and Australia were down slightly.

In China, the Shanghai Composite Index edged up 1.24 percent to 3,348. In Hong Kong, the Hang Seng Index gained 1.99 percent to 30,515.

Positive sentiment was boosted by better-than-expected manufacturing activity on the Chinese mainland. The Caixin/Markit Manufacturing Purchasing Managers Index rose to 51.5 in December, up from 50.8 in November and higher than a 50.6 percent forecast by Reuters.

In South Korea, the Kospi tacked on 1.26 percent to 2,467 on Tuesday.

Overall, the S&P 500 E-Mini Futures was 0.37 percent higher at 2,678.

However, in Japan, the Nikkei 225 Index was down 0.08 percent to 22,764.

Down under, the S&P/ASX 200 was off 0.06 percent at 6,080.

Currencies

The Japanese yen firmed 0.15 percent against the US dollar at midday Tuesday changing hands at 112.42 per dollar.

The Chinese yuan also firmed 0.16 percent against the US dollar at 6.4956 per dollar.

The Australian dollar was up 0.41 percent on the dollar, changing hands at 1.2753 per dollar at midday.

Commodities

WTI Oil was up 0.67 percent to $60.48 per barrel.

Brent Crude edged up 0.41 percent to $66.88 per barrel.

Gold gained 0.61 percent to $1,310 an ounce.

News across Asia

In India, the country’s manufacturing activity expanded at the fastest pace in five years in December, boosted by rising output and new orders, according to a private survey out on Tuesday. The Nikkei Manufacturing Purchasing Managers’ Index rose to 54.7 in December, up from 52.6 in November, reaching its highest level since August 2012, per Reuters.

Take away: Under a sweeping program dubbed “Made in India,” the Indian government has been pushing for an industrial upgrade and improvement of its manufacturing capabilities. However, so far the upgrade has had little affect on economic growth, as the Indian economy has continued to slow down.

In Indonesia, officials are expecting direct investments to grow 10 to 14 percent for 2018, with investment in e-commerce and the services sector expected to expand by up to 80 percent and 40 percent, respectively, according to a report by Reuters.

Take away: Indonesia has been one of the fastest growing economies in the Asia Pacific region with a huge demand for investment in infrastructure and other sectors. Foreign investment, including large amounts from China, are expected to grow significantly in the country over the next few years.

Featured image from Pixabay.

Disclaimer: The author owns bitcoin, ethereum and litecoin. He holds investment positions in the coins, but does not engage in short-term trading.

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

Pre-Market: Sell The Rumor, Buy The News?

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After a long period of uncertainty, the US finally decided to commence with the second round of tariffs directed at China, slapping a 10% levy on $200 billion worth of goods, and threatening with tariffs on another $267 billion of goods in case of a Chinese retaliation. The tariffs will increase to 25% in 2019, but for now, the Chinese response was measured, with only an announcement coming from the Chinese ministry of commerce, saying that the country has no choice but to retaliate.

Shanghai Composite, 4-Hour Chart Analysis

While stock futures fell initially following the after-hours announcement by Donald Trump, today equities are slightly higher across the board, with even the Shanghai Composite staging a rally off its fresh bear market low. The new tariffs were widely expected by the market, so the “buy-the-news” response is understandable, but for a sustained rally in Chinese assets, a resumption of the trade talks between the two largest economies would likely be needed.

DAX 30 Index, 4-Hour Chart Analysis

The main European indices are little changed with the DAX still hovering around the 12,000 level and the EuroStoxx 50 being stuck ear 3350. Both benchmarks hit three-week highs in early trading, but the rally on the Old Continent is still lacking real momentum, especially given the distance to the bull market highs.

EEM (Emerging Markets ETF), 4-Hour Chart Analysis

Emerging markets are still very weak with the recent bounce being barely visible on the charts, and the segment is still stuck in a strong downtrend, with especially the most vulnerable countries weighing heavily. Emerging market currencies are mixed today, with the Turkish Lira completely erasing its rate hike gains, but with the Brazilian Real, the Chinese Yuan, and the Argentinean Peso being relatively stable after the US trade announcement.

S&P 500 Index Futures, 4-Hour Chart Analysis

Stocks are set to open slightly in the green on Wall Street, with the major indices still being within striking distance of their all-time highs, and with only the Nasdaq pulling back meaningfully recently. The S&P 500 is just a tad below its record high, and with the MACD indicator back in neutral territory, a move to new highs could still be just around the corner.

Dollar Stable as Oil Jumps Amid Syria Escalation

Interestingly forex markets remained stable despite the trade war escalation, with the Dollar drifting slightly lower compared to its major peers, and losing a bit more ground against the main China-related currencies. Commodities are also higher today, with especially the China-linked copper and crude oil being in the green and gold trading virtually unchanged.

WTI Crude Oil Futures, 4-Hour Chart Analysis

While the scope of the Syrian conflict shrank in recent months, the tensions around the last rebel stronghold Idlib are rising. Russia and Turkey (which back opposing forces) surprisingly announced the formation of a demilitarized zone around the city to avoid a siege and a likely bloodbath, but overnight, a Russian recon plane was downed, which could lead to a reescalation in the country.

Russia is blaming Israeli forces for the casualty, and an open conflict between the two countries would be increase risks in the region, and possibly drive oil prices higher. The Brent Oil contract has been already outperforming the WTI one thanks to the sanctions against Iran, and today Saudi officials stated that the Kingdom is comfortable with the $80 per barrel Brent price, further widening the divergence between the two contracts.

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 347 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 Fall as Trump Set to Unveil New China Tariffs; Crypto Selloff Resumes

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U.S. stocks declined on Monday as investors once again weighed the prospects of an all-out trade war between the United States and China. On the cryptocurrency front, Ethereum led a broad decline in afternoon trading.

Stocks Fall

All of Wall Street’s major indexes headed for losses on Monday. The technology-heavy Nasdaq Composite Index was the hardest hit, falling 1.4% to 7,895.79. The large-cap S&P 500 Index fell 0.6% to 2,888.80, with losses mainly concentrated in information technology and consumer discretionary shares. Dow industrials closed down 92.55 points, or 0.4%, to 26,062.12.

The CBOE Volatility Index, commonly known as the VIX, spiked 12.8% to 13.62. The so-called “fear index” had declined in each of the past five sessions. Prior to that, it reached two-month highs as stocks declined following Labor Day.

U.S.-China Trade War

The White House is preparing to unveil a new round of tariffs on China targeting $200 billion in goods, marking the most dramatic escalation in the year-long trade war. According to the Financial Times, Washington’s trade haws are urging President Trump not to back down on tariffs, which are believed to run as high as 25% for certain goods. U.S. officials had previously said they are likely to impose a 10% tariff rate on 40% of Chinese imports.

The Trump administration is escalating its trade war against China amid reports that Beijing was looking to take a more assertive stance on tariffs. That said, China’s Foreign Ministry has once again reiterated that a trade war isn’t in anyone’s interest.

“We have always maintained that the only correct means to resolve the trade dispute is through dialogue and consultation on an equal basis with mutual trust and respect,” ministry spokesman Geng Shuang recent said, as quoted by CNBC.

The new round of tariffs will be announced mere days after both countries signaled their readiness to return to the negotiating table.

Cryptos Decline

The cryptocurrency market was back on the defensive Monday, with Ethereum leading a broad downtrend that included tokens, altcoins and bitcoin. The combined market capitalization of all coins fell to a low of around $193 billion, according to CoinMarketCap.

Ether’s price pivoted lower after regaining more than 30% of lost value. The second-largest cryptocurrency plunged10.5% to $197.50. Among the top-ten ERC-20 tokens by market cap, nine reported losses.

Bitcoin also pulled back sharply after failing to make new highs. BTC was down 3% to $6,311 despite relatively strong technical indicators that pointed to short-term upside.

There was no immediate catalyst for the sudden reversal, a sign that bearish sentiment continues to dictate market trends. In terms of news, Ripple has confirmed that one of Japan’s largest financial institutions will soon launch a payment app using the company’s xCurrent technology. Meanwhile, security issuer XBT has announced plans to launch a new product designed to give investors access to a basket of cryptoassets.

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 601 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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Analysis

Pre-Market: China Bear Market Deepens as Shares Hit 4-Year Lows

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Global stocks and other risk assets started the week with slight losses so far, and the recently weak segments continue to struggle, while US markets are still acting relatively strong, suggesting the continuation of the recent trends. European markets are among the weaker ones again, even after last week’s bounce, with the major benchmarks all being around 10% off their highs, in stark contrast with their US peers.

Shanghai Composite, 4-Hour Chart Analysis

With all eyes on the second round of US tariffs directed to China, it’s no surprise that the pressure on the Shanghai Composite didn’t ease yet, and the benchmark slid to yet another almost 4-year low this morning. The Chinese Yuan is holding on well in the meantime, with the August low being in no danger, as of now.

USD/TRY (Turkish Lira), 4-Hour Chart Analysis

That said, emerging market currencies are back in the crosshairs, with Argentinean Peso, the Brazilian Real, and the Turkish Lira all drifting in early trading.  The Lira, which got a boost from the emergency 6% rate hike by the local central bank last week, is headed towards pre-rate hike levels, and that doesn’t bode well for the coming weeks with regards to Turkish and other emerging market assets.

Dow Futures, 4-Hour Chart Analysis

Economic releases will be few and far between this week compared to last week’s busy calendar, and today, only the Empire State Manufacturing Index made some waves, missing the consensus estimate, and suggesting a slowdown in the recently well-performing US segment. The final CPI in the Eurozone didn’t cause any surprises, coming in at the originally reported 2.0% annualized rate. The Dow, the Nasdaq, and the S&P 500 all opened slight below Friday’s levels after the releases, but the more interesting moves are in Forex markets.

Dollar Declines Against Majors as Commodities Mixed

DXY, 4-Hour Chart Analysis

After Friday’s bounce, the Dollar couldn’t maintain its momentum and today, the reserve currency is lower against most of its global peers, with the Dollar index sliding towards its July lows. With the Fed’s next rate hike just around the corner, the current move is more the product of Mario Draghi’s inflation warning, which is pushing the Euro higher since Thursday’s ECB meeting.

From a longer-term perspective, the Dollar’s strength could be undermined by the Trump administration’s pro-cyclical fiscal expansion, at least against the majors, but until the US economy keeps on booming, we expect bulls to be in control of the Greenback’s market.

Gold, 4-Hour Chart Analysis

Commodities are trading without a clear direction today, with copper following Chinese stocks lower, maintaining the strong correlation, while gold and crude oil are slightly higher. The WTI crude contract is edging towards the $70 per barrel price level again, still trading within a narrowing range, while the main precious metal is also stuck near the $1200 level following a four-month-long decline.

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 347 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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