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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.

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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4.2 stars on average, based on 21 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 mainly follows the stock and forex markets, and is always looking for the next great alternative investment opportunity.




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Analysis

Crypto Update: Encouraging Bounce before the Weekend

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The correction that started out in the major lagging altcoins and spread to the leaders of the market yesterday is weakening, with a nice rally today in early trading in most of the majors.  Although the segment is not out of the woods just yet, the bullish signs which have been present ever since the lows three weeks ago still persist.

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Bitcoin stayed clear of the key $9000-$9200 support zone, for now at least, which would be an ideal bottom for the correction, but as we noted long-term investors should accumulate the coin during the correction, as the short-term momentum is already back to neutral. The $10,000 level is still in the focus, while the next major resistance is found at $11,300 and the prior rally high near $11,750 is also ahead as an obstacle.

BTC/USD, 4-Hour Chart Analysis

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The early leaders of the rally, Litecoin and Ethereum Classic are once again showing strength and that could signal that the next leg higher already started. That said, with several coins still stuck in broader downtrends, investors should still expect a bumpy road, with the occasional volatile sell-off.

Litecoin got very close to the $180 support that we have been monitoring throughout the correction, but it quickly bounced above the $200 level again, as the broad bounce started after testing the previously dominant declining trendline. So far, the price action in the coin is consistent with a new uptrend and we still expect LTC to lead the market higher.

LTC/USD, 4-Hour Chart Analysis

Ethereum Showing Positive Signs Again

ETH/USD, 4-Hour Chart Analysis

After yesterday’s early signs of relative strength, the second largest coin is now clearly showing evidence of accumulation, as it quickly recovered above the $845 level following the selloff after the US close. The coin established a new support near $780, and as the MACD is close to providing a bullish cross, it might signal the bottom of the correction.

Despite the bullish price action across the board, even in the recently lagging XRP and IOTA, the correction could still continue, but we still advise traders and investors to look for entry points as we expect the recovery to continue, although traders should still use smaller positions in the relatively weaker coins.

Stay tuned for our detailed technical analysis later on today.

Featured image from Shutterstock

Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

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 111 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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Analysis

Technical Analysis: Correction Continues but Coins Remain Stable

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It’s been another mixed session for cryptocurrency investors as judging by only the price action, the segment suffered losses across the board, but comparing the current sell-off to the January plunge reveals that the majors are much more resilient this time around.

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The largest digital currencies are holding on to most of the gains of the recent weeks, and the price action near the crucial support zones is also encouraging. With all that said, the correction is not over yet, and further losses are still in the cards, but barring a substantial change in price action, the coins will likely continue the rally.

BTC/USD, 4-Hour Chart Analysis

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Bitcoin has been trading around the key $10,000 level all day long, and, so far, a clear break-down has been averted. The short-term momentum indicators are now in neutral territory regarding the most valuable coin, and that could mean that a bottom is close, and investors should already add to their holdings here. Further strong support is found between $9000 and $9200, while targets are ahead at $11,300, $13,000, and $14,250.

XMR/USDT, 4-Hour Chart Analysis

Correlation between the majors has increased during the sell-off, but there are still clear outperformers and laggards, adding to the bullish case. Monero remains among the strongest coins from a technical perspective, trading right at the lower boundary of the bullish consolidation pattern, with the $280 price level holding up for now. The coin faces strong resistance near $300 and $335, but we expect the uptrend to continue with the next target being ahead at $400, while further support is found at $240.

(more…)

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 111 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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Altcoins

Crypto Correction Deepens With Bitcoin Falling Below $10,000

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Cryptocurrencies hastened their decline on Thursday, with the total market cap falling to its lowest level in over a week as bitcoin and the major altcoins backtracked.

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Fresh Selloff Hits Crypto Market

Ninety-two of the top 100 cryptocurrencies tracked by CoinMarketCap were trading lower Thursday afternoon. The combined market capitalization for all coins fell 6% to $430 billion, the lowest since Feb. 13.

Bitcoin broke below $10,000 for the first time in nearly a week, and was last seen trading at $9.891. Even with the decline, bitcoin is maintaining its bullish outlook insofar as prices hold above the technically important $9,000-$9,200 region. Although downside is expected to persist in the short term, a bounce back toward $11,000 is expected. This is confirmed by the oversold Relative Strength Index (RSI), which also points to a rebound.

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As the following chart illustrates, the value of bitcoin peaked near $11,800 earlier this week before the recent bout of profit-taking took hold.

Ethereum, the world’s no. 2 cryptocurrency by market cap, fell below $800 for the first time in almost two weeks. At the time of writing, one ether was worth around $793, which represents a decline of 4% from the previous close.

Like bitcoin, ether is also grappling with oversold levels. However, the recent low is much shallower than the one Ethereum experienced in early February when prices fell toward $550.

Meanwhile, Litecoin tumbled to a session low of $188.73, more than offsetting a 50% gain earlier in the week. At the time of writing, the coin was down 6.5% at $192.59.

Elsewhere in the market, Ripple plunged nearly 9% to $0.93, while bitcoin cash fell fell nearly 8% to $1,210.

No Immediate Catalyst for the Decline

Like previous corrective phases, there was no immediate catalyst for the market’s sharp reversal, a sign that technical traders were largely responsible for the downshift. Since peaking above $518 billion on Saturday, the crypto market has declined 17%, all but reversing the previous week’s sharp rally.

On the regulatory front, the French government just announced it will be cracking down on unregulated cryptocurrency trading. In a statement issued by Autorite des Marches Financiers (AMF), the nation’s financial market watchdog, regulators said they had noticed a growing trend in unregulated futures and derivatives trading involving cryptocurrency.

“The AMF concludes that a cash-settled cryptocurrency contract may qualify as a derivative, irrespective of the legal qualification of a cryptocurrency,” the AMF said in the statement, as reported by CCN. “As a result, online platforms which offer cryptocurrency derivatives fall within the scope of MiFID 2 and must therefore comply with the authorisation, conduct of business rules, and the EMIR trade reporting obligation to a trade repository.”

MiFID stands for Markets in Financial Instruments Directive, a harmonized regulatory framework for the European Union’s financial markets. MiFID 2 was launched earlier this year to provide more transparency on traders and go after non-compliance more aggressively.

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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4.5 stars on average, based on 162 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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