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Asian Market Update – Wednesday: Bitcoin Resurges From Brief Correction

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Shanghai dawn

The Big Question: Bitcoin seems to be out of correction territory, but for how long?

Bitcoin prices rebounded overnight during Asian trading hours, shrugging off earlier losses, suggesting that the virtual currency might be out of the correction the followed earlier peaks, at least for now.

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Bitcoin started to spike in the early hours of the Asian trading session on Wednesday. It was trading at around $4,100, above the $4,000 level. That was a significant rebound from the day earlier, when the Bitcoin price dropped below the $4,000 mark and briefly traded below $3,700.

Wednesday’s surge comes as the blockhchain network might finally get technical upgrades that could solve the scaling issues. However, uncertainties remain as the effort to solve the issue could see a fight between Bitcoin and Segwit2X, which is used by traditional Bitcoin participants.

There was also other good news for Bitcoin or the broader blockchain technology. On Tuesday, former Bitcoin skeptic and American billionaire investor Mark Cuban decided to back cryptocurrency venture 1confirmation, which is looking to raise $20 million.

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Also, IBM has partnered with several of America’s largest food suppliers, including Wal-Mart, Dole and Unilever, to use blockchain to reduce food contamination.

Meanwhile, Ethereum saw a slight increase in price overnight. After dropping to as low as $309 on early Tuesday night, the Ethereum price bounced back and was trading at around $316.

Main Market Movers – Mid-day Asian Trading Session

Indexes Value at Midday Daily Change
Japan-Nikkei Stock Average 225 1,9473.17 0.46%
China-Shanghai Composite Index 3,282,79 -0.23%
Australia-ASX 200 5732.80 -0.3%
India-Mumbai Sensex 31,426.27 0.43%

Most major Asian indexes stalled after opening higher on Wednesday morning.

Stock markets in Tokyo, Sydney and Seoul opened higher on Wednesday, following gains on Wall Street. Around midday however, most major indexes were down.

In Japan, the Nikkei 225 was up 0.46 percent, trading at around 19473.17.

In China, the Shanghai Composite Index was slightly down, having lost 0.23 percent to 3,282.79.

In Australia, the benchmark ASX 200 skidded 0.3 percent to 5,732.80.

In India, the Mumbai Sensex rose 0.43 percent to 31,426.27.

Though the Dow spiked 196 points on Tuesday and Nasdaq was up 1.4 percent, as political tension in the US seemed to cool off a bit following Donald Trump’s speech on Monday night about Afghanistan and reemergence of talks about tax reforms in the US, uncertainties remain.

Watch out for these events: 

  1. A gathering of global central bankers in Jackson Hole, Wyoming, USA. Look out for clues on monetary easing.
  2. Korean Peninsula tensions. The US on Tuesday announced new sanctions on Chinese and Russian companies and individuals with ties to North Korea. Look out for responses from the rogue government in the North.
  3. Developments of US tax reforms. The Republican party seemed to be divided over racial tensions but tax reforms is one thing they relentlessly push for. Watch out for talks.

Currencies

The Japanese yen gained a slight 0.12 percent against the US dollar at Midday on Wednesday. The USD/JPY rate was at 109.43.

The Chinese yuan lost 0.01 percent against the greenback, trading at 6.6602 per dollar. The yuan has been trading lower since it reached a peak in mid-August when it strengthened to as high as around 6.69 per dollar, but has in recent days traded up again and is approaching its previous high. The longer term uptrend in the yuan that has persisted since early June is still intact, and there is potential for a further rise in the yuan if it can break through the previous swing high.

CNYUSD uptrend

The Australian dollar gained 0.28 percent against the US dollar. The Australian dollar was trading at 1.2671 per dollar.

Commodities

WTI Oil was up 0.21 percent to $47.71

Brent Crude also gained 0.21 percent to $51.72 per barrel

Gold was up 0.1 percent to $1,285.38 an ounce

Business News across Asia

In China, business news is focused on sanctions from the US on several Chinese companies that the US claimed to have ties with North Korea, and thus helping the country in its missile and nuclear program.

Take away: No official responses yet from China, but it will likely to further increase tension between the world’s two largest economies over trade, especially after the US launched a probe into Chinese trade practices. 

In Japan, legendary boss of Japanese tech giant Softbank, Grou Masayoshi Son, is reportedly going after a wide range of hot technologies, including robots and satellite technology, with his $100 billion fund created earlier this year. Son has recently traveled a lot to Silicon Valley to look for opportunities.

Take Away: The fund has not announced specific figures for its investments yet, but it will be focused on the hot artificial intelligence industry.

In South Korea: The country’s electronics giant Samsung is scheduled to release its Galaxy Note 8 this week, ahead of a highly anticipated release of its US rival Apple Inc’s new iPhone.

Take Away: By releasing the Note 8 ahead of Apple’s usual release time in September, Samsung is really taking on Apple. Keep an eye on the new technologies Samsung will introduce.

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 20 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

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 109 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 161 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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Analysis

Crypto Update: Bitcoin Tests $10,000 amid Correction

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The altcoin-triggered correction continued in the segment overnight amid the renewed sell-off in global stocks, with a slight bounce in Asian trading and a subsequent dip after the European open. The major coins are all down by more than 5% since yesterday, but for now, the momentum of the move is not worrying, and most importantly the leadership of the rally is holding up relatively well.

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Bitcoin bounced off the key $10,000 level, the $200 support zone held in Litecoin, Monero is still in its consolidation pattern above $280, and only Dash showed deterioration since yesterday, but the long-term picture remains encouraging even in Dash’s case.

LTC/USD, 4-Hour Chart Analysis

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The above-mentioned levels in the technically strongest coins are not even the last line of defense for bulls, as the preceding strong rally left several key levels behind which could serve as the basis of the next leg higher.

Also, we expect the currently negatively diverging coins, led by Ethereum and Ripple, to start showing strength as the short-term momentum reaches oversold territory, and good entry points might be close both for traders and long-term investors.

BTC/USD, 4-Hour Chart Analysis

BTC touched the $10,000 support level, but for now, the technically more important $9000-$9200 zone is not in danger, and the short-term momentum indicators are already neutral thanks to the correction.

That said, more downside is likely in the coming days, but investors and traders should be looking for reversals to enter new positions, as we expect the uptrend to continue, with targets ahead at $11,300, $13,000 and $14,250.

Ethereum Provides a Glimmer of Hope

ETH/USD, 4-Hour Chart Analysis

Although bears are still in control regarding the short-term picture in the second largest coin, this morning ETH didn’t hit a significant new swing low, and that could be the first sign of relative strength, with the $845 support not far above the current price level, and the MACD indicator is already near oversold territory.

Despite the slightly positive sign, short-term traders should remain defensive concerning the weaker coins, while long-term investors should still accumulate the currencies on the dips.

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 109 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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