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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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Bitcoin

Bitcoin: Metcalfe’s Law Points to Six-Month Price Target of $10,000

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The price of bitcoin rebounded on Sunday, helping to engineer a broader recovery in the cryptocurrency market following the latest bearish onslaught that drove values to 15-month lows. In all likelihood, the latest move higher is nothing more than a dead cat bounce as short-sellers appear keen on testing new lows in the near future. Long-term, however, bitcoin appears destined to return to $10,000 based on a regression model of Metcalfe’s Law (more on that later).

BTC/USD Update

Bitcoin’s recovery track showed greater upside on Sunday, with price action concentrated well north of $3,500 on most major exchanges. The leading digital currency traded within a $300 range on Bitfinex, with the latest reading showing $3,679. That represents a gain of 5% for the day. Bitcoin peaked at $3,745.10 earlier in the day, some $450 higher than Friday’s swing low.

Daily trade volumes across all virtual currency exchanges totalled $5.1 billion, according to CoinMarketCap. That’s well above the minimum threshold needed to sustain a much larger short-term rally. (As Hacked previously reported, bitcoin struggles to engineer higher highs when 24-hour volumes fail to break $4 billion.) It’s also likely that over-the-counter trading is equal to or greater than this amount.

Aggregate data courtesy of CoinMarketCap show an average price-per-coin of $3,586, up 5.1% over the previous day. At current prices, bitcoin has a total market capitalization of $62.5 billion. At this time last month, the digital currency was valued well north of $110 billion.

Despite the latest recovery effort, bitcoin is still in the control of bearish hands, which means that a test of the $2,800-$3,200 support zone is likely. This area is likely to trigger a fresh wave of buying as bitcoin resumes its consolidation-dump-consolidation cycle.

The total cryptocurrency market was valued at $115 billion at the time of writing, which is equivalent to bitcoin’s market cap just over a month ago. Over the past 24 hours, the market has added around $7 billion, with all major coins reporting gains.

Fair Market Value?

The latest onslaught on bitcoin’s price has invited speculation that the digital currency is trading well below its fair market value. This is further corroborated by the Forbes bitcoin price estimator, which pegs bitcoin’s fair value closer to $4,900. The data are based on a regression model based on Metcalfe’s Law, which suggests that a network’s value is proportional to the square of the number of connected users.

By analyzing the number of unique active users and daily transaction volumes, Forbes estimates that bitcoin’s price should return above $10,000 by mid-2019. Of course, bitcoin doesn’t always behave according to the rules of fundamental analysis. That being said, it’s important to note that Forbes expects active users and daily transaction volumes to rebound significantly over the forecast period, which makes the forecast more palatable than, say, Tom Lee’s $15,000 price target (by Dec. 31, 2018, no less!).

Forbes claims that the estimator has predicted bitcoin’s price with an accuracy of up to 94% between 2012-2017.

While it’s impossible to tell where bitcoin might end up six months from now, the forecast period could be an important window for gauging the currency’s future trajectory. By June 2019, Intercontinental Exchange and Nasdaq will have already launched their bitcoin markets and the U.S. Securities and Exchange Commission (SEC) will have already ruled on the VanEck SolidX Bitcoin Trust. Investors can also expect new developments around security token offerings and the regulatory approval process for exchanges looking to list them.

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 691 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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Bitcoin’s Dead Cat Bounce Proves Limited as Price Struggles to Hold $3,400

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Bitcoin Options

Bitcoin’s overnight recovery proved limited on Saturday, as the leading digital currency struggled to maintain $3,400 in the wake of yet another 15-month low.

BTC/USD Update

At the time of writing, the major exchanges were quoting bitcoin’s price between $3,365-$3,385. The cryptocurrency fell within that range on Coinbase, Bitstamp, Bitrex and Gemini, among others. However, bitcoin traded at a significant premium on Bitfinex, with prices hovering around $3,446.

Aggregate data courtesy of CoinMarketCap show a bitcoin price of $3,425, which represents a gain of 0.7% compared with Friday. BTC broke above $3,500 during the overnight session as part of a broader market rally but has failed to sustain those levels. This suggests that bitcoin is establishing a lower trading range following the recent selloff.

Nearly $6 billion worth of BTC has traded hands on virtual currency exchanges in the last 24 hours. BitMEX was the largest market, accounting for more than a quarter of total trades. The platform has emerged as a leading venue for shorting BTC during the month-long skid.

The protracted bear market has left bitcoin with a larger share of the overall market capitalization. The total value of all cryptocurrencies is now worth just over $109 billion. At $60 billion, bitcoin accounts for 55% of the total market capitalization, according to the latest available data.

Lower Highs, Lower Lows

As Hacked reported on Friday, the bitcoin price is likely to test $3,000 in the short term as the bears look to test new psychological lows. In terms of technically significant levels, the next parabolic support is located between $2,800 and $3,200. This has previously served as a high demand area.

Analysts and investors have struggled to understand the forces behind bitcoin’s precipitous drop. The downtrend, which began on the eve of the bitcoin cash hard fork, morphed into an all-out panic sale in a matter of days. The author recently argued that the BCH hard fork proved more costly than ever predicted because it forced a major bitcoin mining pool to divert all its resources toward supporting its version of the BCH upgrade. So the hard fork not only fractured the BCH community, but had a direct impact on the bitcoin ecosystem.

Once investors and speculators hit the panic button, long-term holders soon followed. Investor sentiment has yet to recover despite the recent wave of positive news flow involving institutional investment, custody services and exchange funding.

Some analysts believe that the SEC’s decision on a highly touted bitcoin ETF could dictate the market’s trajectory for the rest of 2019. As Hacked reported Friday, the agency has delayed its ruling on the VanEck SolidX Bitcoin Trust until Feb. 27, 2019.

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 691 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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Crypto Update: Sell-Off Deepens as Majors Break Key Levels

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The past 24 hours saw another crucial bearish move in the cryptocurrency segment, with the majority of the top coins violating their prior bear market lows and starting another leg lower in the damaging downtrend. Even the relatively stronger coins turned bearish in our trend model with regards to the short-term time-frame while staying bearish throughout the recent consolidation period.

The top coins trading at their lowest levels in more than a year, and the total value of the market got close to $100 billion following the historic rout, and although the broader picture remains oversold, and sentiment is still excessively negative, for now, traders shouldn’t enter even ultra-short-term positions after today’s breakdown.  Since no bullish leadership developed and the relatively stronger coin failed to maintain their bullish momentum, odds still favor the continuation of the bear market.

BTC/USD, 4-Hour Chart Analysis

Bitcoin broke down below the key $3600 and triggered a short-term sell signal in Asian trading, and it extended its losses below the prior bear market low since then. The coin is now likely headed for a test of the very important $3000 support/resistance level, with the bearish long-term setup clearly being intact.

Traders and investors should stay away from entering new positions here, even as the coin is still oversold from a broader perspective, with strong resistance zones above $3600 ahead between $4000 and $4050 and near $4450.

ETH/USD, 4-Hour Chart Analysis

Ethereum continued to show technical weakness compared to Bitcoin, and it also violated its prior bear market low and the key 95-$100 support zone. The coin is now bearish on both time-frames in our trend model, and traders and investors should still not enter positions here, despite the deeply oversold broader picture.  Strong resistance above $100 is ahead near $120, $130, and $150, while strong long-term support is now found in the $73-$75 zone.

Altcoins hit New Bear Market Lows as Ripple Joins Crash

XRP/USDT, 4-Hour Chart Analysis

Ripple broke below the $0.32 support overnight, triggering a long-term sell signal in our trend model and remaining relatively weak from a short-term standpoint. The coin is still trading above its prior bear market low, but it erased its September surge, and it looks ready to test the low near the $0.26 support. Above that another, weaker level is found near $0.28, with resistance levels ahead near $0.30, $0.32, and $0.3550, and traders and investors shouldn’t enter positions here.

Litecoin/USD, 4-Hour Chart Analysis

Litecoin got smacked lower today after triggering a short-term sell signal, and the prior bear market low couldn’t stop the rout, as the bearish long-term forces took control of the market. The coin remained on a long-term sell signal in our trend model despite the period of relative strength in November, and the odds continue to favor the continuation of the bear market. Traders and investors shouldn’t enter positions here, with primary support now found near $23 and with resistance ahead near $26 and between $30 and $30.50.

Monero/USDT, 4-Hour Chart Analysis

The bearish leaders of the sell-off continue to be under damaging selling pressure, with no sign of stability, and that is negative for the whole segment’s outlook. Monero broke below support together with the broader market and crashed below the $50 level, confirming the coin’s relative weakness. The short- and long-term sell signals remain in place in the case of XMR and the other lagging altcoins, and traders should stay away from the weaker coins until we don’t see signs of stability in the market.

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 411 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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