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Asian Market Update – Tuesday: Litecoin price skyrockets despite creator’s warning; Asian stocks down

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litecoin

The Big Question: What’s going on with litecoin?

Bitcoin might very well be the top story these days, but an explosive run by litecoin in recent days has gotten the attention of the cryptocurrency world and beyond.

After gaining more than $68 to hit a new record of $235 on Coinbase on Monday, litecoin prices continued to surge Tuesday morning in Asia. At midday, the cryptocurrency was up 17 percent to $255, another all-time high.

Though litecoin has been in a strong uptrend all year, its appeal has been hidden in the shadow of bitcoin. That was until last weekend when the price exploded, sending the coin surging by more than 150 percent over the past 5 days. Having gained more than 4,000 percent this year (more than bitcoin’s 2,000 percent), litecoin may be ready to take the step into mainstream following bitcoin’s enormous success.

Litecoin’s rapid increase in value comes after creator Charlie Lee even warned of the risks of buying litecoin, saying on Twitter:

“Sorry to spoil the party, but I need to reign in the excitement a bit… Buying LTC is extremely risky. I expect us to have a multi-year bear market like the one we just had where LTC dropped 90% in value ($48 to $4). So if you can’t handle LTC dropping to $20, don’t buy!”

According to CryptoCoinsNews, some of the reasons reported for litecoin’s price surge may be:

  • An increasing user base on Coinbase, being the most popular platform for new investors in cryptocurrencies. Litecoin is one of few cryptocurrencies available on the platform, and many new users may simply be buying litecoin because they learn about it from Coinbase.
  • Appearances of Charlie Lee on several prominent news networks, including CNBC, may have boosted public interest.
  • Gaming giant Steam has replaced bitcoin payments with litecoin citing rising costs for bitcoin transactions for small purchases.

Also, a strong fan base for litecoin is in the making. Many argue that litecoin is bitcoin’s younger sibling and could rise to where bitcoin is today.

Ethereum also continued on a strong upswing on Tuesday morning. At midday, ethereum was up 2.70 percent to $532 -a record high for the cryptocurrency. Tuesday’s gain followed a huge gain of $71 to a high of about $518 on Monday.

Bitcoin was nearly unchanged on Tuesday, after a big surge on Monday following bitcoin’s debut on the on the CBOE Futures Exchange in Chicago. At midday on Tuesday, bitcoin price was down 0.7 percent to $16,765 on Coinbase. Bitcoin gained more than $1,600 on Monday.

Main Market Movers – Mid-day Asian Trading Session

Indexes Value at Midday Daily Change
Japan- Nikkei 225 22,900 -0.17%
China-Shanghai Composite Index 3,303 -0.57%
Hong Kong –Hang Seng 28,832 -0.46%
South Korea-KOSPI 2,459 -0.47%
Australia-ASX 200 6,009 0.18%
S&P 500 E-Mini Futures 2,666 0.08%

Major Asian equities were narrowly down on Tuesday morning, after three days of straight gains that continued on Monday, following strong performance on Wall Street overnight.

The slow Asian trading was led by stocks on the Chinese mainland. The Shanghai Composite Index edged down 0.57 percent at midday on Tuesday to 3,303. That came after the People’s Bank of China injected 150 billion yuan (about $22.7 billion) into the financial markets through a reverse bond repurchase arrangement on Tuesday.

In Hong Kong, the Hang Seng Index was down 0.50 percent to 28,832.

In South Korea, the Kospi lost 0.47 percent to 2,459 at midday.

In Japan, the Nikkei 225 Index was off 0.17 percent to 22,900.

Stocks moved up a bit Down under, with the ASX 200 up a slight 0.18 percent to 6,009 at midday.

The S&P 500 E-Mini Future was up 0.08 percent to 2,666.

Investors are closely watching meetings of the Fed and the ECB this week. The Fed will conclude its two-day meeting on Wednesday and markets are looking for cues of rate hikes in 2018. The Fed had previously signaled three hikes in 2018, but recent positive economic data could change the number of rate increase, some analysts say. The ECB, which is scheduled to meet on Thursday, is not expected to make any major changes.

Meanwhile, tax reform talks in the US, trade talks among North American countries and Brexit negotiations are continuing.

Currencies

The Japanese yen firmed 0.06 percent against the US dollar at midday Tuesday, changing hands at 113.47 per dollar.

The Chinese yuan lost 0.02 percent against the US dollar at 6.6214 per dollar.

The Australian dollar firmed 0.10 percent on the dollar, changing hands at 1.3273 per dollar at midday.

Commodities

WTI Oil gained 0.47 percent to $58.27 per barrel.

Brent Crude edged up 0.96 percent to $65.32 per barrel.

Gold was up 0.18 percent to $1,244 an ounce.

News across Asia

In China, officials and experts are warning Chinese companies that do business in Australia of potential changes in policy, as China-Australia relations have worsened. Aussie officials have voiced sharp criticism of China over alleged Chinese influence in Australian politics through business operations.

Take away: China-Australia trade ties have traditionally been strong, with China importing tens of billions of dollars worth of Australian goods. But recent signs show that that could change as China shows willingness to use trade as leverage in political disputes with Australia.

In the Philippines, a bank that has been blamed for being used to steal $81 million from Bangladesh’s central bank has accused monetary officials there for covering up their negligence and making the bank a scapegoat. Bangladesh Bank has asked US officials to join a lawsuit against the Philippines’ Rizal Commercial Banking Corp (RCBC) over the stolen funds. Unidentified hackers stole the money from Bangladesh Bank and sent it to RCBC.

Take away: The case, if Bangladesh Bank wins, could provide precedent for other hacking incidents where a company or bank were unknowingly involved.

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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  1. saxonlucius

    December 12, 2017 at 3:56 pm

    I had just mentioned a couple days ago that Litecoin is a good contender to take first place on the private Exchanges. The single largest, most credible exchange in the west, is GDAX. I don’t use GDAX, but I did before the Ether Flash Crash over a year ago. GDAX has Bitcoin, Litecoin, and Ethereum. For most Americans just getting into Crypto, GDAX offers the easiest way to get into it with minimal security and a great API. The cheapest currency is Litecoin, and it looks like the lowest risk for anyone coming in. I have huge respect for Charlie Lee, and he may be right, but I feel as though a lot of people are underestimating the number of people who are entering the market now. All I ever hear about on NPR, the News, and TV is Bitcoin. People are asking me constantly about it. For now, Crypto is not only the drug of the American Consumer but the World Consumer.

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Market Overview

Market Update: U.S. Stocks Edge Lower in Tepid Trading; Earnings Up 21% So Far

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U.S. stocks finished mixed-to-lower Friday as trade uncertainty outweighed robust corporate earnings from Microsoft, one of the tech industry’s most closely-watched blue-chips.

Stocks Struggle for Direction

All of Wall Street’s major indexes hovered around break-even in afternoon trade, with the S&P 500 Index and Nasdaq eventually settling lower.

The large-cap S&P 500 edged down 0.1% to 2,801.83. Eight of 11 primary sectors led by utilities and consumer shares finished in the red.

The tech-focused Nasdaq Composite Index closed down 0.1% at 7,820.20.

Dow industrials were virtually unchanged by the close, settling at 25,058.12.

Wall Street’s VIX fear index, which trades on a scale of 1-100, was virtually unchanged at 12.86.

Earnings on Track for Large Gains

Shares of Microsoft Corp (MSFT) rose to all-time highs after the company reported stronger than expected corporate results late Thursday. The tech juggernaut posted per-share earnings of $1.14 on revenue of $30.1 billion during its fiscal fourth-quarter. Analysts on Wall Street called for earnings of $1.08 per share on sales of $29.2 billion.

Guidance was a big factor in the company’s strong performance Friday. Microsoft said it expected first-quarter revenue of between $27.35 billion and $28.05 billion. Analysts had expected a revenue guidance of $27.4 billion.

General Electric Co (GE), a former Dow blue-chip, also reported earnings and revenue that were higher than expected. However, the company’s share price declined sharply Friday.

S&P 500 companies have reported an annual earnings growth rate of 20.8% for the second quarter, according to FactSet. Eighty-three percent of S&P 500 companies have yet to report.

Trump Breaks Precedent

On Thursday, U.S. President Donald Trump scolded the Federal Reserve for raising interest rates, a move that put him at odds with a long line of presidents who have refused to get involved in central bank policy.

According to Trump, the Fed’s plan to raise interest rates could hurt disrupt the economy at a time when the recovery engine was gaining momentum.

A White House statement later clarified that the president is not trying to influence Fed policy:

“Of course the President respects the independence of the Fed. As he said he considers the Federal Reserve Board Chair Jerome Powell a very good man and that he is not interfering with Fed policy decisions ” the statement said. “The President’s views on interest rates are well known and his comments today are a reiteration of those long held positions, and public comments.”

The U.S. central bank has raised interest rates twice this year and is planning on hiking twice more in 2018.

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 503 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

Bankers & Politicians

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Hi Everyone,

Today is the day. Out of all the meetups, conferences, and hearings that we’ve seen regarding the future of money over the last year, imho none are as critical as the decision expected from India’s supreme court today.

Like several other places in the world, the Indian government is now working hard to form their policy regarding bitcoin and cryptocurrencies but the banking sector has made it clear that they will do everything in their power to halt this.

When Prime Minister Modi made the move to remove 86% of the paper money in India on November 8th, 2016 he inadvertently handed a big win to the banking system and it seems they’re willing to do everything in their power to maintain the status quo.

The crypto ban imposed by the Reserve Bank of India earlier this month is a clear example of this effort. Let’s hope that the judicial system sees through this today and strikes down this policy, doing what is right for the wider public now and for future generations.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Central Bank Independence
  • Stock Markets are Mixed
  • Divergence in Crypto

Please note: All data, figures & graphs are valid as of July 20th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

It was funny, but yesterday I was teaching a group of new eToro representatives about central banks and happened to use an example of what’s happening in the news.

The point I was making is that central banks are officially disconnected from politics but that politics do end up influencing their actions and vice versa.

In his testimony on Wednesday, Fed Chair Jerome Powell did his best not to take sides on the current trade dispute between the USA and China. However, when pressed, he did admit that the proposed sanctions of $200 billion on Chinese imports would have a negative impact on the economy.

This is similar to when Mark Carney, the Governor of the Bank of England, stated before the Brexit referendum that if the vote passes it would hurt the Pound. The statement doesn’t take sides, it simply states the view of someone who is in a good position to understand the economic impact.

So, it was a bit surprising that a few hours after our lesson, Donald Trump had a few remarks of his own about what he thinks the Fed should or shouldn’t be doing.

Though President Trump insists that he’s not trying to influence the Fed’s decision, the very fact that he stated his opinion will likely have an impact on policy, it certainly had an impact on the markets.

Here we can see the US Dollar falling at the time of the interview.

The price of gold also reacted to the administration’s new policy.

Well… maybe not a new policy. Trump did blast Yellen while on the campaign trail for raising interest rates but this is the first time that any US President has so publicly disputed central bank policy, at least not since Bush Senior & Greenspan.

Meanwhile, Trump is still under pressure for his performance with Putin in Helsinki and we’re watching that play out in the press and in Congress.

Stock markets remain mixed while all this sinks in.

Mixed Crypto Rally

There’s been a lot of excitement in the crypto markets over the last few days and everybody wants to know where this is going.

Here’s an article that’s rather bullish…

…and here is one that’s quite bearish…

My thoughts…

It’s still too early to say for certain. The chart of bitcoin is sending rather mixed signals. On the one hand, the downward trendline (yellow) that that has loomed over Bitcoin for the better part of this year has now been broken.

On the other hand, the current rally has stopped significantly short of breaking the strong line of resistance (dotted blue) that kept the price notably depressed in early June. A break above that could very well lead us to $10,000 (green line) but only a clean break above that would indicate a shift in the medium term trend.

One point that is giving a positive sign is the level of divergence between different digital assets. Here we can see a graph containing all the cryptos currently traded at eToro over the last few days.

We’ve noticed in the past that when the trend is down the cryptos tend to stick more closely together, whereas when things are moving up we tend to see more mixed results. The price action over the last 48 hours would certainly indicate the latter.

As always, tag me at the links below if you need anything at all. Wishing you a very pleasant weekend.

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 115 rated postsSenior Market Analyst at Etoro.com.




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Analysis

Pre-Market: China Tries to Support Markets as Global Stocks Slide

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Yesterday’s risk-off shift continued today in early trading with nervous and choppy trading in Asia and Europe, as global financial markets are still haunted by trade war fears and emerging market weakness. The major US indices rolled over after another period of apparent relative strength, with the Nasdaq being the most robust market once again, while most of the key European benchmarks continue to lag behind.

S&P 500 Futures, 4-Hour Chart Analysis

Chinese assets are still in focus before the weekend, as the Yuan’s recent steep devaluation sparked fears of a credit meltdown in the country. With the largest credit bubble in human history casting its shadow on China, some analysts think that with Trump’s trade war, the bug finally found its windshield and the bubble already started to burst.

USD/Yuan, 4-Hour Chart Analysis

All eyes are on the USD/Yuan pair as Chinese authorities are reportedly intervening in the market of the currency, and most likely local equities as well, trying to prevent a serious run on the most important assets.

With the Chinese stock market already in a bear market, and the Yuan trading at fresh 12-month lows against the Dollar, it might be a bit late to stop the slide, but the intervention could cause spectacular short squeezes.

Italy also made headlines today during the European session, as Italian government bonds got slammed lower, as the future of the new finance minister is uncertain, with another round of political turmoil possibly ahead for Europe’s most vulnerable country.

Unicredit (UCG), 4-Hour Chart Analysis

Looking at the charts of Italian banks, it’s clear that the spring turmoil had a lasting effect on the financial system, as Unicredit is on the verge of hitting a new low, and the other large players also remain under pressure, in part explaining the general weakness in European equities.

Europe Still Far Behind amid Mixed Economic Numbers

USD/CAD, 4-Hour Chart Analysis

The economic calendar is almost empty today with regards to the key markets, as the Canadian Retail Sales and CPI reports are the most important releases. The Canadian Dollar rebounded when the USD entered a correction June, but now the currency edging lower again, as the weakness in commodities and the Greenback’s rally are taking their toll. New highs are likely in the USD/CAD pair in the coming weeks, although strong resistance is just ahead at 1.33.

Commodities are little changed today after yesterday’s volatile session, as the bounce in China helped to stabilize the segment. Notably copper is back above the key $2.70 level, while WTI crude oil is trading at $68 per barrel again, and gold is hovering around $1225.

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 297 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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