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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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Bitcoin token

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.

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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4.3 stars on average, based on 33 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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Analysis

Crypto Update: Coins Pop Higher as Consolidation Continues

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Trading activity increased in the major coins today, amid a mixed news flow, and for now, bulls scored a small victory following last week’s bearish price action. Bitcoin, Ethereum and most of the largest digital currencies gained several percents, despite the weekend’s deterioration, and although the technical setup didn’t change significantly, an immediate breakdown has been averted.

The discouraging BIS report that has been making waves today wasn’t enough to push the coins below support, but for now, the short-term strength left the trading range intact with the primary resistance levels still keeping a lid on prices. Given the uncertain long-term picture, the coming weeks will be crucial for the largest coins and the whole segment alike, with Bitcoin being in the center of attention after its long period of relative weakness.

BTC/USD, 4-Hour Chart Analysis

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Bitcoin held up above the April low, despite the bearish short-term picture, and the coin the highest price level in a week, breaching the $6750 level in the process. While the most valuable coin fared relatively well today, it clearly remains a laggard from a broader perspective, and it is still trading in a declining short-term trend, with several strong resistance levels just ahead.

The $5850 is the key from a long-term perspective, with further support levels at $6500 and $6275 and resistance ahead at $7000 and $7350.

Bearish Rotation Among Altcoins

ETH/USD, 4-Hour Chart Analysis

On a negative note, the leaders of the latest rally were among the weaker coins today, and that is a sign of bearish rotation in a segment, and until major resistance levels are broken traders shouldn’t enter new positions here. Ethereum managed to rally above $500 yet again, but it remained below week’s bounce high, leaving the trading range intact, while the declining short-term trend is also still dominant.  Strong resistance is still ahead between $555 and $575, while support below $500 is found at $450, $400, and $380.

EOS/USD, 4-Hour Chart Analysis

EOS, which is one of the strongest majors technically speaking also edged higher today, but it remains stuck in the declining short-term pattern, and below key support/resistance zone near $12. The coin is well below last week’s high and until a confirmed short-term trend change, traders shouldn’t enter positions here.

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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4.6 stars on average, based on 276 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

New York Approval of Crypto Trading App Ignites Price Rally for Bitcoin, Altcoins

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The cryptocurrency market on Monday added $13 billion in the span of one hour after New York’s Department of Financial Services granted Square a digital currency license.

Square Cash App Approved for BitLicense

San Francisco-based startup Square, Inc. announced Monday it has been granted approval by New York regulators to launch its cryptocurrency trading platform in the state. The new crypto service will be offered through Square’s Cash app, which has seven million monthly active users, based on the company’s first-quarter earnings call.

The announcement was confirmed by Square in conjunction with an official press release issued by New York’s Department of Financial Services (DFS).

“DFS is pleased to approve Square’s application and welcomes them to New York’s expanding and well-regulated virtual currency market.,” Superintendent Maria Vullo said in a statement. “DFS continues to work in support of a vibrant and competitive virtual currency market that connects and empowers New Yorkers in a global marketplace while ensuring strong state-regulatory oversight is in place.”

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Bitcoin buying launched for Cash users last fall; by January, most users had access to crypto trading platform. Square announced in March it would seek a BitLicense to bring bitcoin trading to the nation’s second-most populous state.

Cash App has reportedly generated $34 million in profit through its bitcoin trading service.

Bitcoin, Cryptos Pop

Cryptocurrencies added roughly $13 billion in value between 12:22 UTC and 13:27 UTC, bringing the total market cap to $289.5 billion. Total trading volumes spiked by more than $1.5 billion over the same period.

At press time, the total value of all cryptos in circulation was $287.1 billion, according to CoinMarketCap. That represents a gain of about $23 billion from last week’s bear market low.

Bitcoin reached a high of $6,781.14 following the Square Cash announcement. It was last seen trading around $6,716, according to BarCart data.

The largest cryptocurrency by capitalization showed signs of breaking down earlier in the day as prices approached $6,300 on the major exchanges. BTC/USD was little changed over the weekend as the bulls failed to extend last week’s modest relief rally.

Despite the latest gain, bitcoin remains about 10% lower for June and is down more than 50% year-to-date.

As an asset class, altcoins rose more than $8 billion Monday afternoon. At $172.2 billion, digital currencies outside of bitcoin represent 60% of the total market.

All coins within the top-ten reported gains. Percentage-wise, Tron was the best performer, rallying 5.4% to $0.045. Ethereum jumped 3.4% to $517.46. Bitcoin cash added nearly 4% to trade at $884.28.

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 455 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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Altcoins

Crypto Critics: Fractured Facts

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I have another confession.  As a long time investor, I believed in the theory of efficient markets. This basically means that every participant in the market has immediate and complete access to all information facts like price, earnings and other data.  

I made the mistake in applying this theory to cryptocurrencies. Lately, this has been a mistake.  Yes it is true that anyone with the time and interest can go about gathering all the facts. But are all facts telling the truth or are they really fractured facts?  Either way they are dictating investor thinking and that is a key to this market.

According to reports on MarketWatch, crypto prices slumped on the release of a 24 page report from the Bank of International Settlements. BIS stated that cryptocurrencies suffered from “a range of shortcomings that would prevent cryptocurrencies from ever fulfilling the lofty expectations that prompted an explosion of interest — and investment — in the would-be asset class”.

The BIS is no small town organization. They serve as a central bank for other banks and they have been doing this since 1930.  When the BIS talks, people take things they say very seriously.

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The doomsday article released Sunday paints an accurate picture of the state of cryptocurrencies today. But what about tomorrow?  Most everyone is familiar with the issues of speed, security and energy consumption, not to mention regulation. But for the BIS to conclude that none of this problems will ever be solved is down right nieve.  It is the equivalent of declaring in 2001 that the Internet was doomed because 90% of users were connect on dial up modems.

Rotten Research

The BIS report is not the first fracturing of facts presented by well regarded organizations that is scaring investors. Remember back in May? We were treated to the research headline: Bitcoin Futures Caused The Crypto Market Crash according to Federal Papers.

Both the Federal Reserve Bank of San Francisco and a Stanford University professor released a report concluding the launch of bitcoin futures last December contributed to the ensuing price collapse. Pretty far fetched stuff, and here is why.

Bitcoin futures trading began on December 10. BarChart.com shows the CME traded a measly 932 contracts while the CBOE handled 3,887.  Of that total some 2,828 contracts were still “Open Contracts” on December 29th leaving just 1991 coins to do all the harm. During that final week of December over 1.4 million coins were traded. The findings were simply flawed.

Much like the BIS, when the Federal Reserve speaks, people believe they have done their homework carefully.  Throw in Stanford and that adds further weight to this conclusion.

And Then There Are Those Other Facts

And then there was the revelation last week that, much of bitcoin’s 2017 boom was market manipulation, research says.  In a huge 66 page report it was claimed that at least half of the 2017 rise in bitcoin prices was due to coordinated price manipulation using tether.

The author, University of Texas at Austin finance professor John Griffin, argues that Tether was used to buy bitcoin at key moments when it was declining, which helped “stabilize and manipulate” the cryptocurrency price. BTW: this is the job of the specialist on the floor of the New York Stock Exchange.

Professor Griffin appears to have done an excellent job correlating events without much consideration for the economics involved.  According to Bloomberg’s Aaron Brown, for Professor Griffin to be correct in his assertion that tether pushed up bitcoin prices four basis points per 100 bitcoin, Bitfinex would have needed to spend a boatload to inflate the cryptocurrency.  With Bitcoin at $10,000, for example, that means Bitfinex spends $1 million to push the price up to $10,004.

When you look at things from this perspective, Griffin’s findings look pretty absurd.

Look Closely At The Facts

These days with crypto psychology the worst since Mt. Gox in 2014, it seems like a good time for investors to capitalize on the fractured facts.  Technical analysis shows that cryptocurrencies bitcoin, Ethereum, Ripple and others are hovering around key support levels. It would not be shocking at anytime to find some academic study linking crypto to the common cold.  By the way, it is a fact that last years dramatic crypto price spike came right at the start of the flu season.

A far more relevant fact was last week’s announcement by the Securities and Exchange Commission that neither bitcoin or Ethereum were securities. Perhaps equally important is the conclusion that when ICO do not convey an equity ownership position, they too are considered in the same non-security category as bitcoin and Etherrun.  This is a fact.

What we do know is that crypto prices are as low as they have been since well before the spike last December.  Just as the markets recovered from Mt. Gox, the mindset of investors will recover and that is the key.

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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4.4 stars on average, based on 81 rated postsJames Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.




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