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Asian Market Update – Wednesday: Cryptocurrencies tumble on more attacks on the industry

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Bitcoin under attack

The Big Question: For how long can bitcoin withstand all the attacks?

Prices of cryptocurrencies tumbled during the Asian trading session on Wednesday, as more attacks were directed at the virtual currency industry from prominent figures such as JPMorgan CEO Jamie Dimon and from NORTH KOREA.

The bitcoin price dropped more than 3 percent overnight to about $4,034 before midday in Asia. That’s close to one of the lowest levels of around $4,020 in recent weeks seen on Sunday after news of China planning to ban commercial trading made a wave across the virtual currency world.

The ethereum price fell 2.85 percent to $285.53 around midday. The digital currency has been on a downtrend since late yesterday, falling from around $316.

JPMorgan Chase CEO Jamie Dimon said Tuesday that bitcoin is a “fraud.” He told CNBC that “[bitcoin] is just not a real thing, eventually it will be closed.” But Dimon said he is not suggesting investors to go short bitcoin.

North Korea is reportedly building a bitcoin stash for rainy days (UN sanctions) but it’s not trying to get bitcoin in the way everyone else is – buying. Reports said that the North has launched several cyber attacks on South Korean cryptocurrency exchanges, starting in May this year.

While North Korea’s attack highlights concerns over security, Dimon’s remarks represent the doubt of some mainstream traders and governments about virtual currencies.

On Monday, several media outlets reported, citing unnamed sources, that Chinese officials have already drafted an instruction to shut down coin exchanges and ban commercial trading. China has already placed a ban on initial coin offerings or ICOs.

Main Market Movers – Mid-day Asian Trading Session

Indexes Value at Midday Daily Change
Japan-Nikkei Stock Average 225 19,869.82 0.47%
China-Shanghai Composite Index 3,374.89 -0.09%
Hong Kong –Hang Seng 27,850.02 -0.44%
Australia-ASX 200 5,759.00 0.22%
South Korea-KOSPI 2,369.08 0.15%

Most major Asian stock indexes were mixed on Wednesday, as indexes in Japan, South Korea and Australia climbed, following gains on Wall Street. Indexes in Greater China posted a slight decline.

In Japan, the Nikkei 225 added 0.47 percent to 19,869.82 around midday.

In South Korea, the KOSPI gained a slight 0.15 percent to 2,369.08.

Down under, the benchmark ASX 200 tacked on 0.22 percent to 5,759.00.

The gains in Asian indexes followed the record highs seen in the S&P 500 and Dow Jones Industrial on talks of tax reform and eased concerns over hurricane Irma in the US and geopolitical tensions on the Korea Peninsula.

In Greater China, the Shanghai Composite Index was down 0.09 percent and Hong Kong’s Hang Seng lost 0.44 percent.

Currencies

The Japanese yen gained a slight 0.06 percent against the US dollar at midday in the Asian trading session on Wednesday. The USD/JPY rate was at 110.08.

The Chinese yuan gained 0.1 percent to 6.5290 per US dollar. The yuan lost against the greenback in the previous day to as low as 6,5430 after the central bank changes two regulations on foreign exchange, seeming to indicate to let the yuan move more freely.

The Australian dollar gained 0.02 percent against the US dollar. The Australian dollar was trading at 1.2462 per dollar.

Commodities

WTI Oil was down 0.29 percent to $48.20 per barrel.

Brent Crude lost 0.18 percent to $54.11 per barrel.

Gold was also down 0.05 percent to $1,331 an ounce.

Business News across Asia

In China, opinions are mixed about the new iPhones, with some saying they were not impressed by the upgrades to iPhone 8 or even the iPhone X, and indicated that they would choose domestic brands such as Huawei. Others are already lining up to get their hands on the first batch of iPhones. Some iPhone scalpers in China say price for iPhone X could be pushed up to 20,000 yuan or about $3,063, compared to the official price of $999.

Take away: Apple has been having a tough time in China, amid increasing competition from local brands such as Huawei, Xiaomi and others. The new iPhones are Apple’s bet to get back on the top of the world’s largest smartphone market, but things are not looking all positive.

In India, Visiting Japanese Prime Minister Shinzo Abe and Indian PM Narendra Modi are reportedly quietly ramping up a plan to build up their own regional connectivity, competing with China’s Belt and Road Initiative. India and Japan have shown reservation about Chinese President Xi Jinping’s vision to connect the Eurasia region and Africa.

Take Away: Though there was no concrete plan reported between India and Japan, the pair seems to be on to something that could change both geopolitical and economic dynamics in Asia.

Featured image from Max Pixel.

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 34 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

Italy Spooks markets Again as Stocks Remain Under Pressure

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European stocks Led the way lower today despite a bullish start in Asia, as equities gave back their gains when Daimler published a surprising profit warning, which was deeply affected by the recent trade war developments, reigniting fears of a tariff-driven downturn in global trade.

DAX, 4-Hour Chart Analysis

The Old Continent got into more trouble later on, when two anti-EU officials were named in Italy, resurrecting fears of a clash between the systematically crucial country and the core of the Eurozone. Italian yields rose in European trading, and although they are still shy of the levels hit during the May scare, the periphery could be in trouble as the ECB pledged to exit the market by the end of the year.

Nasdaq 100 Futures, 4-Hour Chart Analysis

The main European indices were smashed lower during the session, with the DAX hitting a two month low, still being very weak relatively speaking compared to its US peers. US stocks sold off heavily following the opening bell and they failed to recover, unlike two days ago, and the major benchmarks traded well below yesterday’s levels just before the close.

The Nasdaq and the Russell 2000 lost some of their recent mojo, pulling back heavily of the all-time highs during the day. All in all, the risk off shift continues to dominate across the board, as we expected and we remain negative on risk assets here, especially regarding emerging markets, even as the Dollar’s rally could be over for a while.

Dollar Pulls back as Pound Surges

USD/CAD, 4-Hour Chart Analysis

The Dollar took a beating as the Philly Fed Index came in much worse than expected, and as the Bank of England sent hawkish signals, pushing the Pound and the Euro higher. The central bank left its benchmark rate unchanged at 0.5%, but a rate hike this year got much closer, with a key member of the bank voicing inflationary concerns.

The Greenback fell more than what the events would imply, so a larger scale consolidation could have already started in the currency following the recent gains and the marginal new high yesterday. With the EUR/USD pair nearing the 1.1450-1.15 support zone, the USD/CAD hitting 1.33 and the AUD/USD touching 0.7350, a meaningful counter-trend move would be timely in the surging reserve currency.

WTI Crude Oil, 4-Hour Chart Analysis

Gold continued to drift lower before the Dollar’s reversal and it hit $1262 for the first time since lat December before bouncing back above the $1270 level in late trading. Crude oil also fell sharply in early trading, and the WTI contract traded with a $64 handle before rallying back to $66 per barrel.

The OPEC meeting, which is expected to result in a supply increase by the cartel made the crucial commodity very volatile in recent days, but we expect the bearish trend to continue, with a likely dip to the $60 level in the coming weeks.

Featured image from 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 279 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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Market Overview

Market Update: Dow’s Slide Hits Eight Days as Trade Risks Reemerge 

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U.S. stocks retreated Thursday, with the Dow Jones Industrial Average extending its losing skid to eight days as uncertainty over international trade undermined risk appetite.

Stocks Turn Defensive

Dow industrials were off 196.10 points, or 0.8%, by the close to settle at 24,461.70. That was the index’s worst settlement in three weeks.

The Dow’s losing skid is now the longest since March 2017. Another fall on Friday would bring the skid to nine days, the longest since 1978.

The broader S&P 500 Index fell 0.6% to close at 2,749.76. Seven of 11 primary sectors fell, led by energy and other commodity-sensitive sectors.

Meanwhile, the Nasdaq Composite Index closed down 0.9% at 7,712.95. The technology-heavy average closed in record territory on Wednesday.

Investor fear over a U.S.-China trade rift returned on Thursday, sending the VIX Volatility Index sharply higher. Wall Street’s gauge of investor anxiety climbed to a session high of 15.18 on a scale of 1-100 where 20 represents the historic average. The index would later settle at 14.68 for a gain of more than 14%.

Trade War Looms Large Over Market

U.S.-China trade tensions were back in focus Thursday after U.S. policymakers urged Google to end its business ties with Huawei, a leading Chinese smartphone maker. Congress recently banned U.S. firms from selling products to Chinese telecommunication giant ZTE, a move that practically shuts down the company.

Under President Trump’s orders, Washington announced last Friday it would implement a 25% tariff on up to $50 billion of Chinese goods, including semiconductors. Trump says additional tariffs of 10% will be applied on $200 billion of Chinese goods should Beijing choose to retaliate.

The first round of tariffs will come into force July 6.

In theory, tariffs will make American-made goods cheaper than imported ones, thereby encouraging consumers to purchase from local producers. Importers themselves will have to pay an additional tax on certain Chinese products they bring into the country – costs that are passed on to the consumer.

Saudi Arabia Proposes Crude Output Hike Ahead of OPEC Meeting

Saudi Arabia, OPEC’s de facto head, is encouraging fellow producers to support a deal that would see oil production rise by one million barrels per day. However, Iran remains the key holdout in the deal, with the country’s energy minister suggesting that a compromise is unlikely before the cartel meets Friday.

Despite Iran’s opposition, the biannual meeting in Vienna is expected to result in the first coordinated output hike since the cartel decided to constrain supplies all the way back in 2016.

The Saudis are banking on a slowdown in U.S. shale production over the next two years until pipeline bottlenecks are solved in the energy-rich Permian Basin, energy minister Khalid al-Falih said Thursday.

International crude prices declined sharply on Thursday, with Brent futures reaching a session low of $72.94 a barrel on London’s ICE Futures exchange. The global benchmark was last down $1.57, or 2.1%, at $73.17 a barrel.

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 462 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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Market Overview

It’s Getting Hot

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Hi Everyone,

Welcome to the first day of summer!!

Top news in crypto-land today is the flash announcement from world-famous rapper Akon, who is now getting into the ICO market with his own crypto called Akoin.

It doesn’t stop there though. Apparently, his vision includes building a brand new crypto city in Senegal to use the currency exclusively.

I suppose with the recent updates from the in the United States it would be very difficult to raise money for an ICO of the coin there. Perhaps Akon can do some other type of token introduction without raising money from the public to get started.

In Senegal of course, this isn’t the first attempt at localized currencies in the region.

As we’ve been saying, the real need for Bitcoin and other decentralized currencies comes specifically from emerging markets. Only once natural growth picks up there, will the institutions get involved. If that takes a day or a year, nobody can say.

Today’s Highlights

  • Dollar Rising
  • Gold Falls Further
  • Crypto Ramps up Regulation

Please note: All data, figures & graphs are valid as of June 21st. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Stocks are mixed to negative today but the currency markets are in the throes of a strong US Dollar swing.

This is primarily the result of the new direction in policy from the US Federal Reserve, which is planning to increase interest rates while the rest of the world largely sustains their very low rates.

We’ve discussed before how the Dollar may be reversing the trend but now we can see that it is at its highest level in almost a year.

On this chart, I’ve put a Fibonacci Retracement line. For those of you who are green on technical analysis, fib lines are used to predict the likelihood in nature of a specific price being reached, according to Fibonacci’s patterns found in nature.

As we can see, we’re now approaching the 50% level.

 

Metals Moving

The main mover lately has been gold and other precious metals which are currently dropping like it’s hot.

As the Dollar get’s stronger gold tends to get weaker as you can buy more ounces of gold with a single dollar.

The recent slide has brought us all the way back to the medium term trend line that we’ve been watching for the last year.

Of course, everyone draws their trendlines a bit differently, but for those that are bullish on the long-term prospects for precious metals, this might be a good time to start looking for an entry.

On the other hand, the hotter it gets, with the USD and other reasons, the more gold tends to melt.

Also watch out for the Bank of England today, which will deliver its decision (most likely not to raise rates) at noon in London.

Though there will be no press conference following this decision, Governor Mark Carney will be speaking later tonight at the Mansion House Dinner.

Crypto Regulation

As we go forward, the role that governments play in cryptocurrencies is increasing at a rapid pace.

In response to hacks on Coinrail and bithumb, the government of South Korea has already released the details of a new bill to regulate crypto exchanges.

Europol is also ramping up efforts to get a handle on the space and will be meeting this week with more than a dozen major crypto exchanges, discussing anti money laundering initiatives.

Here at eToro, we’re doing our part as well. Yesterday, our very own Iqbal Gandham,UK Managing Director, addressed the Treasury Select Committee in London and did an amazing job representing the crypto industry.

Iqbal is not only the managing director of eToro UK but he is also the Chairman of Crypto UK self-regulatory body and a huge advocate for the sensible regulation of cryptocurrencies.

You can catch the recording at: https://www.parliamentlive.tv/Event/Index/252986ff-cec8-4647-a208-787618136dfb

The more clarity we see from global governments about how the space will be regulated the more people will feel free to invest and use cryptocurrencies regularly.

Let’s have an awesome day ahead!

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation. The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro. Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose. Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.

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 103 rated postsSenior Market Analyst at Etoro.com.




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