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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.

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.

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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4.3 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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Analysis

Crypto Update: Monday Selloff Drags Majors Lower

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The cryptocurrency continues to show mixed short-term signs following last week’s Ethereum-led bounce, and the subsequent consolidation. Today, all of the majors sold off after the US open, triggering downgrades in our trend model, but the two largest coins, barely, retained their short-term buy signals, holding up above key support levels.

Ethereum remained north of $200, while Bitcoin is still above the $6275 level, but the total value of the market is back at $195 billion as BTC failed to gain ground during last week’s rebound, and as several coins failed to join the move. The odds of a failed rally got higher after today’s selloff, and the move still only qualifies as a counter-trend one, with the long-term downtrends being in no danger in most cases.

XMR/USD, 4-Hour Chart Analysis

Monro, which has been the third major on a short-term buy signal, is also still positive in our model, despite bouncing lower off the $120-$125 resistance zone and getting close to testing the $108 support level. The coin is now trading slightly below the rising short-term trendline and it would need to show strength quickly to retain stay on a buy signal. Further support is found near $100, while key long-term resistance is ahead at $150.

ETH/USD, 4-Hour Chart Analysis

Ethereum fell back to the $200-$205 support zone today, and the coin is trying to establish a swing low, following the initial rally of its 15-month low. Despite the pullback, ETH is still on a short-term buy signal, but given the segment-wide long-term weakness, traders should still not enter full positions. A sustained move below $200 would warn of a test of the lows and a possible new leg lower, with strong resistance still ahead at $235 and $260 and with further support found at $180.

Market Still Lacking Sustained Strength

BTC/USD, 4-Hour Chart Analysis

Bitcoin fell back to $6275 again after failing to show bullish momentum last week, and although BTC is still trading with relatively low volatility, well above the crucial support zone near $5850, the recent days are not positive for crypto-bulls. A sustained move below primary support would warn of a test of the weaker support near $6000 and a likely move to the key long-term zone, with resistance levels now ahead at $6500, $6750, and $7000.

XRP/USDT, 4-Hour Chart Analysis

Ripple’s weakness is also a warning sign for bulls, as the third largest coin not just failed to join the rally last week, but it turned lower today, threatening with another move towards the August lows. XRP is still trading within its short-term range, and it remains on a neutral short-term signal, but further weakness could quickly trigger a sell signal. Support below $0.26 is found near $0.23, while resistance is ahead at $0.30, $0.3130, and $0.32.

EOS/USD, 4-Hour Chart Analysis

EOS also remained weak during the recent altcoin bounce and now it is back on a short-term sell signal after dipping lower together with the broader market, plunging below $5 yet again. Now, a test of the August lows and a move to $4 is once again the most likely, with only the support between $4.55 and $4.65 found above the August low, while strong resistance is ahead between $5.35 and $5.55.

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 347 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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Bitcoin

Bitcoin Price Stable Near $6,500; Path of Least Resistance Higher

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Bitcoin’s price traded within a narrow range on Monday after failing to make new highs over the weekend, a sign that the bulls were dialing back their optimism of an imminent breakout. However, the technical charts suggest that slow and steady upside is the path of least resistance in the short term, barring any new cases of market manipulation.

BTC/USD Update

Bitcoin is currently trading at $6,477 on Bitfinex, where it was virtually unchanged compared with 24 hours ago. The price reached a high of $6,543.30 earlier in the session. Trading volumes on Bitfinex and all exchanges have declined sharply over the weekend. As of Monday, bitcoin’s 24-hour volumes were $3.4 billion.

A look at the moving averages suggests bitcoin is poised to continue higher in the short term. BTC crossed the 50-day moving average last week and is now targeting the longer-term MAs. What’s more, the 100-day moving average is fast approaching the longer-term 200-day MA.

At current values, bitcoin is capitalized at $112.2 billion, according to CoinMarketCap.

Trading in the broader cryptocurrency market was equally tepid on Monday. Total trade volumes across all cryptocurrencies and exchanges reached $10.5 billion, according to latest available data. The total market is currently valued at $202.8 billion. The majority of coins in the top-ten have posted narrow gains compared with Sunday.

XBT Issuer Doubles Down on Cryptos

The yearlong downturn in bitcoin has not deterred Sweden’s leading crypto issuer from doubling down on the market. The Stockholm-based XBT Provider AB is planning to launch a new exchange-traded product (ETP) that tracks a basket of up to ten cryptocurrencies. The product, which will be available this year, will provide blended exposure to some of the world’s leading cryptocurrencies.

In an interview with Bloomberg, company CEO Laurent Kssis said a blended ETP is “something that the market is looking for. They are telling us ‘I’d just like blended exposure to 5 or 10’ cryptocurrencies.”

XBT has been offering crypto exchange-traded products since 2015. After finding initial success in Sweden, XBT’s products entered the U.S. market last month. However, the Securities and Exchange Commission (SEC) quickly suspended trading of the Bitcoin Tracker One (CXBTF) and Ether Tracker One (CETHF) over investor confusion.

In a statement after the SEC’s decision, the company said the suspension “relates only to trading in the Unites States, does not apply to trading on the listing market – Nasdaq Stockholm, and does not relate to any action taken or failed to be taken by XBT Provider AB.”

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 601 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

Good Crypto News: What It All Means

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It was another one of those weeks.  Crypto prices hit rock bottom around $186 billion. Goldman Sachs backs away from it plans to offer a crypto trading desk.  Vitalik Buterin tells Bloomberg how little he thinks of Ethereum. Technical analysts give us little hope for getting bullish anytime soon.

But that was before The New York Department of Financial Services approved Gemini and Paxo cryptocurrency exchanges. Both GUSD and PAX are based on the Ethereum ERC-20 token and backed by physical dollars custodied in FDIC-insured U.S. bank accounts. This insulates investors for whatever else may be rocking the wider crypto market. This development alone is a step forward for investors and regulators.

The most negative news of the week appeared in a Forbes article, written by Pawel Kuskowski titled: “How To Stop Ether Going To Zero: Defusing The ‘Difficulty Bomb’.  The negative slant of the title alone reflects the mindset of the crypto market these days.  It hard to expect anything else with the market having lost a tidy $600 billion in value this year.

Pawel’s strength is his ability to spell out a core unknown to Ethereum’s immediate future. That is if ETH developers will solve the much talked about Difficulty Bomb with modifying Proof of Work or moving to Proof of Stake.  This is hardly a new issue but Pawel does a solid job explaining how either choice still produces uncertainty. As for the price of ETH, uncertainty is no friend.

So the question becomes simply this.  If Vitalik Buterin and his group fail to solve the Difficulty Bomb and ETH goes to zero, won’t this produce a similar result on virtually every other ERC-20 token built on the Ethereum platform?  The answer is so apparent that is makes you want to liquidate your investment position even at current depressed levels.

Unfortunately, there is no immediate answer to this riddle. That doesn’t mean that we should cut and run from crypto. Let’s take some of this week’s developments and apply the principles of a reasonable person.

The Sun Still Shines

And now for something that lends hope that the crypto world is not coming to and end.

On a purely technical note, Hacked.com’s Greg Thomson documented a $1 billion trade influx in the five days up to September 13th producing a tidy little bump of 23% in the price of ETH.

On a more fundamental point comes the word that the big Wall Street investment bank, Morgan Stanley is building a Bitcoin swap trading product.  The key feature here is that the new product will create so called synthetic exposure to the price of Bitcoin.

Just how this will function remains to be seen but the implications both for individual and institutional investors is promising.  The ability to create a security that addresses the custody issue for institutions and protects parties from loss from hackers is a real value added proposition.

According to CCN, Morgan Stanley is one of several major Wall Street firms that even includes Jamie Dimon CEO of JP Morgan Chase.

So what does all this focus on Bitcoin have to do with the rest of the crypto market? Moreover, what does any of this have to do with solving the Difficulty Bomb? Simply put, the answer is money or more precisely, the expected return on investment.

Each of these Wall Street firms has some serious money behind these decision to commit capital and human resources to crypto currencies. Their initial interest may be in Bitcoin, but it would be foolish to assume that it is limited to a single coin in a multi billion asset class.

So it is important to assume that these folks have done their homework and have gotten comfortable with the many short term uncertainties of the current crypto marketplace.  Apparently their crystal ball can read beyond some of the recent negative price action.  This may not entirely remove the uncertainty, but it is good to be in the company of smart money.

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 104 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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