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Asian Market Update – Wednesday: Bitcoin cash skyrockets as GDAX adds support; Asian stocks muted amid tax bill vote

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Rocket

The Big Question: What’s happening to the price of bitcoin cash on GDAX?

The biggest news in the world of crypto today is the surge in bitcoin cash, which has been overshadowed by bitcoin since the showdown between the two in early November. Wednesday morning in Hong Kong, bitcoin cash was up more than 20 percent to all fresh all-time high on Bitfinex, while prices of other major cryptocurrencies stumbled.

At midday, bitcoin cash was still up 15 percent for the day to $3,212 on Bitfinex. The virtual currency surged more than 60 percent to an all-time high of $3,676 before falling about 20 percent later.

The surge in bitcoin cash price on Wednesday came after Coinbase and their GDAX exchange, announced on Tuesday that traders could buy and sell bitcoin cash on its platform. The price of bitcoin cash on GDAX then spiked to almost insane levels shortly after it was added, far above the market price on other exchanges. GDAX then halted all trading in the virtual currency after only 4 minutes of trading, with the last recorded transaction coming in at $9,500.

For the other main cryptocurrencies, things did not look so good Wednesday morning.

Litecoin saw the biggest loss on Wednesday morning, trading down by 5.06 percent to $332 on Conbase. Litecoin is now down for the second straight day after losing about 2.7 percent on Tuesday.

Bitcoin also took big hit on Wednesday morning, losing bout 4 percent to $17,000 as of midday and extending a three-day losing streak. Since Sunday, bitcoin has tumbled about 12.8 percent.

Ethereum was also down by almost 4 percent to $796 at midday after four positive days in a row. Prior to Wednesday morning’s loss, ethereum was up nearly 20 percent since the weekend.

Main Market Movers – Mid-day Asian Trading Session

Indexes Value at Midday Daily Change
Japan- Nikkei 225 22,853 -0.06%
China-Shanghai Composite Index 3,296 0.01%
Hong Kong –Hang Seng 29,252 0.04%
South Korea-KOSPI 2,478 -0.13%
Australia-ASX 200 6,072 0.01%
S&P 500 E-Mini Futures 2,690 0.20%

Asian equities were muted on Wednesday morning, as investors closely watched developments in the US Congress on one of the largest tax code overhauls in US history.

As of midday Wednesday, equities on the Chinese mainland, Hong Kong and Australia were marginally higher, while stocks in Japan and South Korea were down slightly.

On the Chinese mainland, the Shanghai Composite Index edged up 0.01 percent at midday to 3,296. In Hong Kong, the Hang Seng Index moved up 0.04 percent to 29,252 at midday.

Down under, the ASX 200 was 0.01 percent higher to 6,072 at midday.

The S&P 500 E-Mini Futures was up 0.20 percent to 2,690.

In Japan, the Nikkei 225 Index was off a slight 0.06 percent to 22,853 at midday.

In South Korea, the Kospi was down 0.13 percent to 2,478 at midday.

Investors in Asia Pacific and across the globe are keeping their eyes on the US Congress for a sweeping tax reform bill that have boosted stocks to all-time highs this year. The House Representatives passed the bill on Tuesday afternoon, but it still needs another vote. So far, the market’s expectation is that Congress will pass the bill and have it signed by Trump before Christmas.

Currencies

The Japanese yen was down 0.05 percent against the US dollar at midday Wednesday, changing hands at 112.94 per dollar.

The Chinese yuan firmed 0.10 percent against the US dollar at 6.6969 per dollar.

The Australian dollar was also down 0.02 percent on the dollar, changing hands at 1.3052 per dollar at midday.

Commodities

WTI Oil was up 0.14 percent to $57.72 per barrel at midday on Wednesday.

Brent Crude edged up 0.13 percent to $63.89 per barrel.

Gold gained 0.20 percent to $1,263 an ounce.

News across Asia

In China, concerns have been raised that the country’s largest e-commerce giant could form a monopoly in both online and offline consumer markets. The trigger is that Alibaba and Tencent have acquired new e-commerce companies and invested heavily in a wide range of other sectors including physical stores, insurance, auto and so on.

Take away: So far Chinese regulators have been mum on M&A deals involving these e-commerce giants, but with increasing worries over anti-trust issues, things could turn for them.

In South Korea, travel agencies there have renewed their protest that the Chinese government has banned travel groups to visit South Korea because of political tensions between China and South Korea. Bilateral ties soured last year after South Korea allowed the US to deploy the THAAD missile defense system.

Take away: Chances are these restrictions will be removed sooner rather than later, as China has conceded on the THAAD issue and reluctantly accepted that the THAAD system will not go away anytime soon, given the current tensions on the peninsula.

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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Market Overview

Ethereum Rhapsody

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Hi Everyone,

Caught in a landslide, no escape from the reality of the bear market.

One of the Ethereum dev teams currently building the decentralized future wasn’t looking for sympathy but did announce that they are poor.

Bismillah! Their prayers were answered by Vitalik Buterin the creator of Ethereum himself.

This sparked quite a reaction from Vitalik’s followers who were apt to point out Vitalik’s nickname… “Non-giver of Ether.”

Thanks to the transparent nature of Ethereum, we can trace the transaction back to one of Vitalik’s wallets and see a little silhouette of his presence on the network. YOLO!!

Perhaps most notable are his holdings in Maker, Kyber, and OMG. His Spank balance is near empty but he does have one digital kitten…

All jokes aside, the 1000 ETH sent were certainly not a giveaway at all. It was a strategic investment in the network to support the much-needed efforts to scale the Ethereum blockchain.

Let’s hope the rhapsody pays off.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Daily Market Update pays tribute to the most streamed song from the 20th century: https://youtu.be/fJ9rUzIMcZQ

Today’s Highlights

  • Carry on, Carry On
  • Galileo Figaro Magnifico
  • Face the Truth

Please note: All data, figures & graphs are valid as of December 19th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Too late. The Fed’s time has come. Monetary tightening sends shivers down my spine. The economy is aching all the time. Goodbye quantitative easing. ZIRP has got to go. Gotta leave the President and the markets behind and face the truth.

Mama… this is the way the wind blows…

Today the US Federal Reserve is expected to raise their benchmark interest rate by 0.25%. Markets have been on edge since early October in anticipation of rising interest rates but at this point, it’s simply too late to back down. Anything but a full delivery of what economists are expecting would project weakness. Certainly, they’d prefer to spare us from this monstrosity.

Now for some perspective here’s a graph of the S&P500 over the last 50 years where each candle is three months. That last one was probably put aside by Beelzebub.

Leave it all Behind & Face The Truth

I don’t wanna die, and neither does the crypto market apparently. The price action over the last few days is clear evidence of that. There are two news stories, which people are pointing to that might be helping drive the positive sentiment.

Number one is this article from Bloomberg, who have done the research and found that Tether does indeed have the reserves promised.

The second is an update from ICE, who seems to be all set for their launch on January 24th (pending regulatory approval). The update is from a week ago, but the timing and dates in the note seem to line up with the market movements quite nicely.

Galileo Figaro Magnifico

Though Galileo loved to look at the moon, he also studied gravity. After all, market action is nothing more than practical physics.

Figaro managed to enter a legal contract of marriage despite harsh authoritative oversight.

And isn’t it magnifico how the crypto markets are moving lately?!

For those wondering why we’re seeing this awesome push from the floor, the only explanation I can give is that this rally is all about short covering.

Especially after the short squeeze, we saw on Monday, today’s action is simply a continuation of that. Markets are made of people and it’s likely that most people will be looking to reduce their exposure before the holidays.

Over the last few weeks, there have been a lot of high leveraged short positions building up and when those sell positions are closed, it creates upward pressure on market prices.

The evidence of this can be found hiding in plain sight.

Take a look at how Bitcoin Cash, which has probably been the most controversial of coins and many have blamed for the recent slide, is up about double of what the rest of the market has done today.

This is the real life, so have a fantastic day!

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

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

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

eToro is a multi-asset platform which offers both investing in stocks and cryptocurrencies, as well as trading CFD assets.

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

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 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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4.7 stars on average, based on 140 rated postsSenior Market Analyst at Etoro.com.




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Market Overview

U.S. Stocks Mostly Higher on FOMC Drift; Bitcoin Price Maintains Upward Trend

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U.S. stocks traded mostly higher on Tuesday, as the Federal Reserve’s two-day policy meeting was officially underway in Washington. The cryptocurrency market notched a fresh 12-day high as bitcoin and its altcoin peers maintained their upward traction for most of the session.

Stocks Recover

Wall Street recovered modestly after plunging on Monday to their lowest levels of the year.  The Dow Jones Industrial Average rose 82.66 points, or 0.4%, to close at 23,675.64. The industrial benchmark fell more than 500 points on Monday.

The large-cap S&P 500 Index trimmed all of its gains to finish flat at 2,546.16. Gains were concentrated in six sectors, with consumer discretionary and information technology companies among the biggest gainers. Losses were primarily concentrated in energy and consumer staples.

A strong performance in technology-related industries pushed the Nasdaq Composite Index firmly higher. The index climbed 0.5% to settle at 6,783.91. On Monday, the Nasdaq joined the S&P 500 and Dow in negative territory for the year.

FOMC Drift

The relatively strong performance in stocks ahead of Wednesday’s Federal Reserve policy verdict has a well established historical precedent. Since 1994, gains in the 24 hours before the FOMC meetings represent 80% of excess returns in the market, according to CNBC. The average S&P 500 gain during that stretch is 0.5%.

Policymakers are widely expected to raise interest rates at the conclusion of the FOMC meeting on Wednesday. The accompanying rate statement and quarterly economic projections could shed light on the central bank’s future path at a time when President Trump is pressuring officials to end the tightening cycle.

Based on Fed Fund futures prices, the chance of a liftoff tomorrow is 71.5%. That’s down slightly from Monday and is well below levels seen last month.

Cryptocurrencies Show Stability

The cryptocurrency market traded mostly higher on Tuesday, as bitcoin and the major altcoins avoided a reversal following a strong start to the week.

The market cap for all cryptocurrencies peaked at $115.6 billion, the highest since Dec. 6. At press time, the market came in just shy of $114.1 billion.

Among top-ten cryptocurrencies, bitcoin cash (BCH) was the best performer, gaining 8.6% to $99.36. EOS climbed 4.2% to trade at $2.50. XRP rose 1% to trade at $0.3308. Bitcoin’s price was little changed at $3,552.12.

Stable market prices were accompanied by a sharp rise in trading volumes. Crypto exchanges processed nearly 50% more volume on Tuesday, according to CoinMarketCap. Total market turnover rose above $17 billion, based on latest available data.

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 704 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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Analysis

Forex Update: Dollar Drifts Lower With All Eyes on the Fed

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Forex Market Snapshot

Asset Current Value Daily Change
EUR/USD 1.1368 0.19%
GBP/USD 1.2648 0.20%
USD/JPY 112.55 -0.23%
AUD/USD 0.7201 0.34%
GOLD 1,250 0.14%
WTI Crude Oil 48.53 -1.32%
BTC/USD 3,565 1.96%

With just one day left until the week’s main event, the Fed’s rate decision, it’s no surprise that forex markets are having a very choppy session, with the Dollar and the main safe-haven assets being in focus. The USD has been under pressure in the last couple of days amid the louder and louder critiques regarding the Fed’s rate hikes, and although economic numbers continue to be positive in the US, and the consensus still points an increase tomorrow, leaving the rates unchanged wouldn’t be as shocking as one week ago.

Economic numbers were mixed today, with the German IFO index missing the consensus estimate, but with the US housing market showing stability for the second month in a road. Building permits and Housing Starts both bounced back more than expected amid the pullback in Treasury yields in November, pointing to a still relatively healthy economy in the US.

While the Dollar only managed a small pop higher following the releases, as Treasury yields plunged to new multi-month lows again, the underlying bullish trend seems safe for the reserve currency.

Technical Analysis

GBP/USD, 4-Hour Chart Analysis

The Great British Pound is having another active session, and although it briefly surpassed the crucial 1.27 level against the Dollar, it fell sharply later on, leaving last week’s key technical breakdown intact.  While choppy trading is expected across the forex segment up until tomorrow’s key Fed announcements, the Pound could remain active, with the Brexit chaos and Theresa May’s shaky position still causing headaches for traders.

EUR/JPY, 4-Hour Chart Analysis

While risk assets rebounded today after yesterday’s volatile and bearish session, the main safe-haven assets, such as the Japanese Yen and gold continue to perform well, especially compared to the risk-on currencies. The EUR/JPY pair which has been trading in a broad bearish consolidation pattern since October is testing the key support zone between 127.50 and 127.75, threatening with a key breakdown in the coming weeks. While the short-term momentum indicators are slightly oversold, the pair is clearly bearish both short- and long-term and traders should be looking for entry points on the short side.

USD/CNH, 4-Hour Chart Analysis

Some analysts call the Dollar/Yen pair “most important currency pair of 2019”, and the pair continues to trade in the close vicinity of its October low, despite the recent trade-related optimism. A clear dovish surprise tomorrow could send the Yuan soaring, even in light of the recent weak Chinese economic data, but for the coming months, new highs are very likely (meaning new lows for the Yuan), and a drop to 6.85 would be an optimal entry point for traders.

WTI Crude Oil, 4-Hour Chart Analysis

Oil continues to be in a steep broader downtrend, and despite the deeply oversold long-term momentum readings, the crucial commodity only managed to consolidate in a sideways trading range after dipping below the key $50 per barrel price level in the WTI contract.

Yesterday, the price of the contract fell below its prior low, and today the commodity plunged by more than 5%, violating the $47.50 per barrel level for the first time since mid-2017. Barring a quick recovery, the breakdown could extend to the $44 per barrel level but a strong support zone is already found between $46.50 and $47.

Key Economic Events Tomorrow

ChartBook

Forex

EUR/USD, 4-Hour Chart Analysis

USD/JPY, 4-Hour Chart Analysis

EUR/GBP, 4-Hour Chart Analysis

AUD/USD, 4-Hour Chart Analysis

AUD/JPY, 4-Hour Chart Analysis

GBP/JPY, 4-Hour Chart Analysis

USD/CHF, 4-Hour Chart Analysis

Commodities

Gold Futures, 4-Hour Chart Analysis

Copper Futures, 4-Hour Chart Analysis

Major Stock Indices

S&P 500 Futures, 4-Hour Chart Analysis

DAX 30 Index CFD, 4-Hour Chart Analysis

Nikkei 225 Futures, 4-Hour Chart Analysis

Shanghai Composite Index CFD, 4-Hour Chart Analysis

 

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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4.7 stars on average, based on 422 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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