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Asian Market Update – Wednesday: Bitcoin Remains Stable after Big Jump the Previous Day over North Korea Missile Test

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The Big Question: Are we approaching the end of the bull run?

Bitcoin prices remained stable overnight during the Asian trading session, after the cryptocurrency saw one of the biggest jumps in weeks, as investors appears to have been spooked by the latest North Korea missile test and turn to bitcoin.

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The digital currency was changing hands at around $4,600, up about 0.5 percent overnight, with the lowest prices at $4,580 and the highest at $4,613.

The stable performance on Wednesday followed a huge surge in the previous day, when the price of bitcoin jumped from about $4,347 to as high as about $4,610, a new all-time-high.

Ethereum also maintained stability overnight, trading between $370 and $374. Ethereum also saw a huge jump in the previous day, when the price climbed from around $340 to a peach at $375. That’s the highest level in over two months since the digital currency’s price jumped to an all-time high of $410 in mid-June.

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The bull run for digital currencies on Tuesday followed losses in global equity markets, especially in Asia, after the rogue government in North Korea fired away another mid-range ballistic missile, which flew over Japan’s territory.

The gains also brushed off recent regulatory tightening signals in Russia. In Russia, the local regulator said bitcoin should be limited to qualified investors and not the mass population.

The rally came even as the head of the Bitcoin Foundation cautioned investors not to invest more than they can afford and warned against risks from unsophisticated investors. But investors appeared to be more comfortable with the digital currency as equities rattled.

Financial research firm Autonomous Next has reportedly identified more than 50 crypto-related funds, indicating rising interest in the digital currency from institutional investors.

As the bull run seems to gain fresh momentum, the question is whether we are getting close to a temporary top in the bitcoin market? Goldman Sachs predicts $4800 could be the top of this run.

Main Indexes – Mid-day Asian Trading Session

Indexes Value at Midday Daily Change
Japan-Nikkei Stock Average 225 19,473.43 0.57%
China-Shanghai Composite Index 3,364.32 -0.03%
Australia-ASX 200 5,658.00 -0.19%
Hong Kong-Hang Seng 27,979.55 0.77%
South Korea- KOSPI 2,366.27 0.06%

Most major Asian equities bounced back on Wednesday, shaking off losses from sell-offs in the previous day, when they stumbled over North Korea’s latest missile test.

On Wednesday, The South Korean stock market, which took a hit on Tuesday, edged up before midday. The benchmark KOSPI was up 0.06 percent to 2366.27 before midday.

In Japan, the Nikkei 225 added 0.57 percent to 19,473.43.

Hong Kong’ Hang Seng index gained 0.77 percent to 27,979.55.

However, down under, the ASX 200 dropped 0.19 percent to 5658.00.

In China, the Shanghai Composite Index dropped a slight 0.03 percent to 3,364.32.

The rebound in the Asian market followed calmer response from the UN over North Korea’s latest missile test, which the Japanese government called an “unprecedented and grave threat.”

US President Donald Trump who has previously threatened “fire and fury” remained silent on Tuesday, as he is presumably busy dealing with the consequences of the historic hurricane Harvey in Texas.

The United Nations “only” condemned the test but did not mention of any new sanctions or other tougher responses.

Asian stock markets also appear to have been boosted by a consumer confidence report from the US, which said consumer confidence is at the second-highest level since the year 2000.

Market-sensitive news to watch this week: 1. Impact of Hurricane Harvey off the US Gulf Coast, though so far the impact on markets appear to be limited; 2. Economic data from Japan, the US, Hong Kong and Australia later in the week; 3. NAFTA talks; 4. UK’s Brexit talks with the EU; 5. talks of tax reform in the US.

Currencies

The Japanese yen gained 0.04 percent against the US dollar at Midday. The USD/JPY rate was at 109.68.

The Chinese yuan strengthened 0.19 percent against the greenback, trading at 6.5816 per dollar. The yuan continues to break new highs as the dollar is plummeting, possibly providing trend traders with some golden opportunities for buying dips in CNYUSD.

The Australian dollar gained 0.54 percent against the US dollar. The Australian dollar was trading at 1.2509 per dollar before midday.

Commodities

WTI Oil was down 0.04 percent, trading at $46.27 per barrel.

Brent Crude gained 0.31 percent to $51.78 per barrel.

Gold gained 0.24 percent to $1,311.76 per ounce.

Business News across Asia

In China, State-owned China Aerospace Science and Industry Corp announced that it has started a research and development project for building a “high-speed flying train.” The train could travel as fast as 1,000 km/h and the company would go even further to explore higher speeds of 2,000 km/h and 4,000 km/h trains.

In Japan, news still focused on the North Korean missile test. The Japanese government said the missile, which flew over one of its northern islands, is a direct challenge to Japan’s sovereignty. Though the US and UN responded relatively calm, Japanese government officials are mulling other responses.

Take Away: Japan is in talks with South Korea, as both view North Korea as a direct threat to their national security. They might pressure the US to formulate a tougher response, but as evidenced on Tuesday, tougher sanctions haven’t deterred North Korea so far.

In India, the financial capital of Mumbai has been hit by the worst monsoon rain in years. Pictures online show the city being flooded and people are lining up to be evacuated from their homes. Public transport and other services have been shut down, according to media reports.

Take Away: The rain could impact India’s financial sector. However, the Mumbai exchange remained open on Wednesday, with the Sensex up 0.74 percent in early morning trading.

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Analysis

Technical Analysis: Litecoin and NEO Jump as Bitcoin Trades near $8000

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The cryptocurrency segment continued its bullish run, as the total value of the coins climbed above $230 billion for the first time ever, while Bitcoin also posted marginal new highs. The most valuable currency is still overbought regarding the long-term picture, and we continue to expect a deeper correction in the coming period, despite the recent strong rally. Support levels are still found $7700, $7000, and $6700 while the $8000 level is ahead as a major obstacle.

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BTC/USD, 4-Hour Chart Analysis

Litecoin has been the most active major besides Bitcoin, as it rallied strongly after breaking out above the key $64 resistance and it breached the next target at $75 before heading below $70 again. The coin remains in bullish long- and short-term patterns, and we expect a move above the major resistance zone ahead with the next target found at $82.50.

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Litecoin/USD, 4-Hour Chart Analysis

NEO is showing strength in the second half of the session, while Monero is recovering well from a short-term dip, similarly to IOTA and Ethereum Classic. Ethereum continues to represent stability in the segment, while Ripple failed to build up momentum so far after yesterdays spike higher. With still most of the altcoins being in bullish setups, let’s see the short-term charts.

(more…)

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Analysis

Technical Analysis: Ripple Breaks Out as Bitcoin Tests Highs

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Cryptocurrencies are having another bullish session as the total value of the market surged to a new all-time high near $225 billion, with the help of the rally in BTC and Ripple, and despite the drop in the value of Bitcoin Cash. The most valuable coin its record high yet again after the brief but steep weekend correction, despite the still overbought long-term picture. We still urge traders and investors to wait for a deeper correction before entering new positions here, with support levels found at $7000, $6700, and $6000.

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BTC/USD, 4-Hour Chart Analysis

Ripple has been the other main mover of the day so far, as the coin skyrocketed on huge volume and breached the $0.26 level before turning lower and stabilizing near $0.23. The coin triggered a short-term buy signal by moving above $0.2250 and it remains bullish on both time-frames, despite the pull-back, with another major target level ahead at $0.30.

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Ripple/USD, 4-Hour Chart Analysis

The other majors are little changed expect IOTA, which further added to yesterday’s gains and reached overbought readings, while Ethereum Classic and Dash continue to drift lower in short-term correction patterns. Let’s see the detailed analysis of the short-term charts.

(more…)

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Bitcoin

Wanna Take a Road Trip?

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After many blasts and sounds of gunfighting on the streets of Harare in Zimbabwe, it seems that the army finally has things under control.

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The 93 year old dictator Robert Mugabe is under house arrest for trying to set up his wife, AKA Gucci Grace, as the next leader. The military has seized control over the state media and is preparing for the first regime change in the countries modern history.

With the extremely volatile nature of cryptocurrencies, it’s difficult to view Bitcoin as a safe haven asset. But if you happen to live in a currency-less country in the midst of a coup that has ATM withdrawals capped at $20 a day, the worlds global digital currency seems to provide the only stable alternative.

One bitcoin is now going for about $12,499 in Zimbabwe’s markets. Anybody down for a road trip?

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@MatiGreenspan
eToro, Senior Market Analyst

 

Please note: All data, figures & graphs are valid as of November 16th. All trading carries risk. Only risk capital you’re prepared to lose.

Market Overview

The mild selling attitude that was observed on Wall Street has been completely reversed by Asian investors this morning. The Dow Jones fell 0.65 yesterday, which isn’t much but it is the biggest decline since September. After a big pushback, the China50 and Nikkei 225 are up more than 1.3% today.

This sudden surge in stocks comes as the currencies and commodities markets remain rather docile. There’s plenty of news events on the calendar today that could change that though and of course, all eyes are on Washington DC and the NYSE.

Sneaky Politics

Donald Trump’s Tax bill is expected to pass a vote in the House of Representatives today but it is very likely to fail in the Senate. Republicans took a bold move and tried to squeeze the “repeal of Obamacare” right into the tax cuts plan.

The new clause we will remove the fine for Americans who don’t purchase health insurance, a move that would basically render Obamacare impotent and topple the insurance companies. Sneakily, it would also reduce the effect of the tax bill on the long-term US deficit enough to allow House Republicans to pass the bill without the Democrats’ approval. Though this could be seen as progress, they’ve only brought themselves one step closer to a brick wall when the bill hits the Senate.

The promise of reduced corporate taxes has brought the stocks up quite significantly over the past few months and nobody really knows how well the prospect is currently priced into the markets. With the next Fed meeting a month away and earnings season almost over, this political drama is taking the center stage in American markets.

Crypto BattleGround

Over the past 24 hours, the value of all cryptocurrencies in circulation has risen by an outstanding $5 Billion and the entire market is now worth $220 Billion. Bitcoin itself has added $8.2 Billion to its market cap and now trading at $7,375 on eToro.

After the unification brought on by the cancellation of the Segwit2x hard fork and the quick rejection of the notion to replace BTC with BCH, the first and most popular digital currency is now asserting its dominance over the market.

However, the next $300 could prove very difficult ground to reclaim. There are generally less buyers when the market is near the top and it would require a breakout of the all time highs in order to generate new interest from new buyers.

The sugar rush on the 2x cancelation caused the price to spike as high as $7,872 (orange circle) so everything between the previous high (blue) and the all time high should be considered battleground territory.

Please let me know if you have any questions or comments. A lot of the info that I have comes directly from you, the readers. So please keep tagging me and sending in your thoughts.

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.

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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