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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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U.S. Stock Futures Point to Tepid Tuesday Start as Democrats Vow to Fight Trump’s Emergency Declaration

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U.S. stock futures headed for modest gains on Monday, as the President’s Day holiday kept trade volumes subdued ahead of what’s expected to be an active week in the market. Meanwhile, cryptocurrencies exploded to the upside as trade volumes reached new highs for the year.

Stock Futures See Modest Gains

The U.S. futures market traded slightly higher in the holiday-shortened session. The Dow Jones mini futures contract edged up 14 points to close at 25,902.00. The benchmark Dow Jones index surged 1.7% on Friday en route to fresh three-month highs.

S&P 500 mini futures ticked up 1.25 points to settle at 2,778.25. The Nasdaq 100 mini contract rose 17 points to 7,080.75.

The New York Stock Exchange was closed on Monday for President’s Day. Regular trading hours are set to resume on Tuesday.

Further reading: Does this Chart Spell Doom for the S&P 500 Index?

Trump vs Democrats (Again)

As CCN reported earlier today, Democrats have vowed to fight President Trump’s emergency declaration to fund a new steel barrier on the southern border with Mexico. Trump exercised his executive powers on Friday shortly after signing $333 billion in new funding agreements that avoided a second costly government shutdown.

The new budget includes $1.38 billion in additional border funding, which is far less than the $5.7 billion Trump requested. By declaring a state of emergency, the president can divert funds from other programs to construct his new steel barrier.

According to The Wall Street Journal, the state of California has already announced plans to sue the Trump administration over the declaration. Xavier Becerra, the state’s Attorney General, told CNBC this weekend that he “definitely and imminently” planned to pursue legal action.

Crypto Bulls Ignite New Rally

Crypto markets put on a show Monday, as the asset class rallied more than $12 billion in the span of a few hours. The combined value of all cryptocurrencies peaked at $133.2 billion, according to CoinMarketCap. That’s the highest level in over five weeks.

The rally was sustained by an incredible surge in trade volume. Turnover spiked more than 66% to $33.4 billion, far exceeding the the volume surge that accompanied the mid-November selloff.

The top 40 cryptocurrencies all reported gains. Bitcoin, the largest of the digital assets, rose 8.4% to $3,932.72. Ethereum climbed 14.4% to $146.89. XRP climbed to $0.3232, having gained 7.6%.

EOS was the standout performer, as the price rocketed 23.5% to $3.48. The cryptocurrency is trading at its highest level since November.

Litecoin maintained its bullish posture, as the price surged 12% to $48.48. Bitcoin cash rallied 19.1% to reach $145.44.

For more on the Monday crypto rally, read: Cue the Crypto Recovery: Coins Surge $9 Billion Overnight as Ethereum, EOS Break Out.

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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4.7 stars on average, based on 772 rated postsChief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi




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Market Overview

Who can Verify it?

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Hi Everyone,

This might be considered old news to some but I didn’t take it seriously myself until this article came out today on bitcoin.com.

Lately, we’ve been talking a lot about bitcoin’s rising transaction rate, which is now coming close to its all-time highest levels.

So, it seems that many of these transactions are coming from an entirely new bitcoin use case, other than just for sending money. It also seems that this is rapidly becoming the focus of hot debate among crypto spheres.

going into too much technical detail, what’s happening here is that some new projects are making use of Bitcoin’s stability as a network to maintain the stability of other crypto projects.

The use of crypto’s main Blockchain in this way has some upset that it could be “spamming the network” and by raising the amount of data stored it could increase the fees.

Proponents of the concept, on the other hand, feel that this is actually just another real use case of bitcoin and the ability to store data in this way is built into the code for a reason.

No matter what side you’re on, at this point we can take comfort in the fact that transaction fees in bitcoin are at a two year low at the moment, despite the added traffic.

As well, real-world use of bitcoin continues to rise, whether or not you consider the above as such. For example, in Indonesia, cryptoassets have just been legally recognized as a trading commodity.

Last week, we noticed a large spike in Indonesian volumes on P2P site Local Bitcoins. Well, that figure has continued on to double this week.

With the size of the Indonesian remittance market topping $2.7 billion in Q3-2018, this is quickly becoming a crypto market to watch.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • US-China trade deadline: 11 days | Days to Brexit: 39
  • Presidents Day (Reduced Volumes)
  • Crypto Markets Rising

Please note: All data, figures & graphs are valid as of February 18th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Markets continued to rise on the news that another US government shutdown has now been averted. This morning, Asian markets are celebrating the completion of the last round of trade talks and optimism for what’s to come.

The timetable for Brexit may have just been shortened. As we know the deadline for Article 50 is on March 29th. However, it seems that the final deadline for May to close a deal has now been shortened by Parliament.

The US session will be partially shut down today in celebration of President’s Day. Check for market hours on the assets you’re trading at this link.

Cryptos Rising

Crypto markets have risen nicely over the weekend. A move that has largely been led by Ethereum.

In this graph, we can see ETH (white line) against a basket of other cryptoassets. Notice the sudden spike yesterday morning, which was followed by a full retracement. After which, Ethereum continued to rise throughout the afternoon and by the evening turned into a market-wide rally.

I was able to put out a short tweetstorm this morning with several graphs and the highlight, in my opinion, is the rising volume across changes. In this chart from coincheckup.com, we can see that global volumes had bottomed out around $14 billion on February 8th but have now come up as high as $27 billion today.

Movements that happen on strong volume tend to be more meaninful in the market as it shows the flows have power behind them.

Let’s have an amazing week ahead!

Best regards,

Mati Greenspan
Senior Market Analyst

Connect with me on….

eToro: @MatiGreenspan Twitter: @MatiGreenspan LinkedInMatiGreenspan |Facebook:MatiGreen

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 152 rated postsSenior Market Analyst at Etoro.com.




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Does this Chart Spell Doom for the S&P 500 Index?

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It has been an impressive eight-week stretch for the U.S. stock market, with the S&P 500 Index staging one of its best relief rallies of the past three decades. Investors expecting to ride out another bull market should tread carefully now that the latest earnings forecasts are in.

Scary Chart

Following a painful entry into bear-market territory on the eve of Christmas Eve, the S&P 500 Index has recovered an astounding 18%. On Friday, it closed at 2,775.60, its highest since Dec. 3.

The recent run of good fortune has come largely on the back of better than expected corporate earnings as well as signs of progress on U.S.-China trade talks. But these catalysts could become headwinds in the near future.

Case in point: FactSet recently issued grim guidance for S&P 500 companies, forecasting a year-over-year drop in earnings during the first quarter of 2019. The research firm’s rationale for the downgrade comes from the so-called bottom-up earnings per share (ESP), which is “an aggregation of the median EPS estimates for all the companies” in the S&P 500 Index. This figure declined by 4.1% in January, a much bigger decline than the five-year, ten-year and 15-year averages.

All 11 primary sectors tracked by the S&P 500 recorded a decline in their bottom-up EPS estimate during the month of January. The biggest losses were reported by energy and information technology, the S&P’s largest and fifth largest sectors, respectively.

That leads us to the following scary chart, which appeared on the Quoth the Raven Twitter feed on Friday:

Forward earnings are a forecast of a company’s next-period earnings, usually to completion of the current fiscal year or next fiscal year.

Related reading: The January Stock Rally Could Face a Painful Reversal.

Watch Out for 2,800

Morgan Stanley, one of America’s largest banks, is warning investors not to “get caught up in price momentum” of the latest rally. The warning comes as the S&P 500 is once again approaching 2,800, a level where rallies come to die.

While valuation isn’t a reliable predictor for market timing, the headwinds posed by 2,800 are compelling. Combined with dismal earnings guidance, it’s likely that market fundamentals will detract from the latest rally attempt.

If the S&P 500 does go beyond 2,800, its valuation based on 2019 average per-share earnings will be 16.5 times forward earnings. As Bloomberg notes, that’s the average reading of the past five years and a strong sign that stocks are becoming overvalued.

“Don’t get caught up in the price momentum, as if the market is telling you something that may happen,” Mike Wilson, a strategist at Morgan Stanley, told Bloomberg TV. “The data isn’t improving, and the data probably isn’t going to improve over the next two to three quarters, and that’s going to create uncertainty again when you’re trading at 2,750-2,800.”

Featured image courtesy of Shutterstock. Charts via Barchart.com. 

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 772 rated postsChief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi




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