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Market Overview

August and Everything After

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The entire crypto market rose during the month of August by 84%. Staggering gains only come with significant risk so it’s not a surprise to see a retracement of 35% since the end of that beautiful month.

With the uncertainty regarding the future of the Chinese crypto market and the closing of BTC China now fully priced in many big names in the blockchain field are now calling for a bottom.

For example…

Let’s take a look below…

@MatiGreenspan
eToro, Senior Market Analyst

 

Please note: All data, figures & graphs are valid as of September 15th. All trading carries risk. Only risk capital you can afford to lose.

Market Overview

Another missile flys over Hokkaido Japan. This time the stocks don’t even seem to notice. Other than a slight softening in the US Dollar the market had virtually no reaction to this new aggression. Gold has even dipped since the test.

What is clear is that when financial analysts say “fear in the markets” they’re not talking about physical fear. Rather, they must mean some sort of metaphorical fear that shows up in the correlation of different safe haven assets. A correlation that lately seems to be more coincidental than anything else.

As any 1st year statistics student will tell you correlation does not equal causation.

Crypto Correlation

One correlation that is holding strong is the cryptocurrencies. Throughout August, different digital currencies were fighting against each other. Each one taking turns grabbing market share. At times rising in value at the expense of a different coin.

Since the beginning of September 2nd, we can see that all the cryptos are moving together. Here, take a look…

For better or worse they all seem to be in one ship for the time being.

Let’s get technical

For those still on the fence and for those worried about your stop loss, there is a shining glimmer of hope that we can see clearly on the charts.

If we look at the long term charts for Bitcoin and Ethereum there does seem to be some strong support right around the corner.

Bitcoin…

Ethereum…

Now, every analyst draws their lines slightly differently. However, if we follow the inclines that we’ve been seeing over the past few months we could be in for a bottom quite soon.

Of course, this is an incredibly high-risk market and it’s certainly possible that these lines will be broken.

Let’s get Social

By far the most successful cryptotrader on eToro @Jaynemesis is approaching the markets with caution. This morning he managed to close a few small sell positions in profit. Those positions were meant to balance out his portfolio in the face of the Chinese uncertainty.

Read Jay’s full update here.

It seems there’s a Pirate in our midst.

@4exPirate is by far one of the most consistently profitable day traders in eToro. Though he’s rather new to crypto trading he seems to have a knack for it and is certainly enjoying the extreme volatility.

Dawid remains short on Bitcoin sailing against the strong sentiment of eTorians who are 92% long.

What else?

Not much…

The Bank of England gave a strong signal yesterday that they will be raising their interest rates shortly. The GBPUSD jumped on the announcement and is now close to its highest level since the brexit referendum.

Inflation ticked up in the USA yesterday. It seems August was not kind to the US consumer or the US Dollar. Full story here.

Many thanks to one of my favorite bands for the title of today’s update.
Let’s have an amazing weekend!

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.

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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Market Overview

Market Update: U.S. Stocks Snap Five-Day Skid; Bitcoin Cash Splits Following Contentious Hard Fork

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U.S. stocks wrestled their way back into positive territory on Thursday, as solid consumer spending data outshined a mixed earnings report from Walmart. Cryptocurrency prices remained under pressure as bitcoin cash split into two competing chains following a highly anticipated hard fork event.

Stocks Snap Five-Day Skid

All of Wall Street’s major indexes posted gains, with the S&P 500 snapping a five-day losing streak. The large-cap index rose 1.1% to 2,730.20, with seven of 11 primary sectors finishing higher. Shares of information technology companies led the advance, rising 2.4% as a sector.

A strong performance in tech lifted the Nasdaq Composite Index to higher ground. The gauge climbed 1.7% to close at 7,259.03.

The Dow Jones Industrial Average rallied 208.84 points, or 0.8%, to 25,289.34.

Dow blue-chip Walmart Stores Inc. (WMT) fell on Thursday even as the company reported mostly positive quarterly results. The retailing giant earned $1.08 per share for the third quarter, easily beating expectations calling for $1.01. Revenues of $124.9 billion came in slightly below estimates. Still, the company raised its guidance for fiscal 2019 amid surging e-commerce sales.

Stocks were also aided by stronger than expected retail sales data courtesy of the Department of Commerce. Receipts at retail stores jumped 0.9% in October, topping forecasts for a 0.6% increase. Retail sales are a key proxy for consumer spending, which accounts for more than two-thirds of U.S. economic output.

Bitcoin Cash Hard Fork

Shortly after 18:00 UTC, the bitcoin cash network officially upgraded with two competing versions of the blockchain – BCHABC and BCHSV – diverging at block 556,767. The first two bitcoin cash ABC blocks were mined by Bitcoin.com, the platform owned by Roger Ver.

Prior to the hard fork, bitcoin cash SV – the protocol backed by Craig Steven Wright and casino tycoon Calvin Ayre – had a significant edge in terms of hash rate. However, the ABC implementation backed by Ver had the upper hand in terms of economic and community support. Shortly after the fork, it was confirmed that nearly three-quarters of bitcoin cash node operators were running the ABC implementation, which is considered the “official” roadmap for BCH.

The future of the bitcoin cash community remains up in the air, with market participants waiting to see if mining support changes in the coming days. Wright has threatened to sabotage the ABC chain by using has power to create empty blocks.

Crypto Markets Bounce Off Lows

With the bitcoin cash hard fork underway, activity in the broader cryptocurrency market cooled significantly. The combined market capitalization of all coins bottomed near $176 billion on Thursday before recovering to around $184 billion at the time of the fork. Trade volumes, measured in 24-hour cycles, fell from $25 billion to below $22 billion.

Crypto prices continue to face strong headwinds, with bitcoin and the major altcoins showing very little upside. XRP appears to be a notable example, with recent price data showing a fairly significant bounce from recent lows. Compared with 24 hours ago, XRP is up nearly 4% to trade at $0.4674, according to CoinMarketCap. XRP is down 6.8% week-on-week compared with double-digit percentage losses reported across the majors.

As for bitcoin cash (BCH), prices appear to have stabilized around $415. The no. 4 cryptocurrency is the biggest loser over the past seven days, having lost a whopping 29% over that stretch.

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 664 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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Analysis

Pre-Market Analysis And Chartbook: Brexit Chaos Sparks Turmoil Across Markets

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Thursday Market Snapshot

Asset Current Value Daily Change
S&P 500 2,685 -0.63%
DAX 30 11,360 -0.47%
WTI Crude Oil 56.40 0.71%
GOLD 1,215 0.31%
Bitcoin 5,389 -3.72%
EUR/USD 1.1302 -0.04%

The Brexit process continues to be the main driver in financial markets across asset classes, and the situation in the UK could be best described as chaotic at the moment. While yesterday the British Cabinet’s approval of the draft Brexit plan sparked a brief risk rally, with the Euro the Pound and equities rising hand-in-hand, today, the plan is in serious jeopardy. Several ministers, including the Brexit-Secretary resigned, and the outcome of vote in the Parliament seems doubtful, at best.

GBP/USD, 4-Hour Chart Analysis

The Pound lost significant ground against all of its peers, with the currency’s losses also being exaggerated by the much worse than expected British Retail Sales data. The GBP/USD pair hit its lowest level this month, touching the 1.2750, while the Euro is relatively strong today, the Dollar’s broad rally still seems intact, and a no-deal Brexit could push the Cable back towards its historic low near 1.20 from late 2016.

Dow 30 Futures, 4-Hour Chart Analysis

While equities are little changed so far today, the charts still look wounded globally and even the relatively strong US benchmarks are likely headed for, at least, a test of their lows from October. Economic numbers were mixed today in the US, with the Retail Sales report beating the consensus estimates across the board, but with the Philly Fed Index showing an unexpected slowdown in the manufacturing sector.

The Dow, which has been the strongest benchmark recently is hovering near the 25,000 level, after underperforming the broader market yesterday, and with the other indices being in even worse technical shape, the coming days could see another surge in volatility, despite the pullback in Treasury yields across the curve.

Heavy Trading Continues in Commodities

WTI Crude Oil, 4-Hour Chart Analysis

Oil finally found support following two months of steep losses and Tuesday’s liquidation event, with the WTI contract rising above the $57 per barrel level yesterday, before a late-day pullback. Today the crucial commodity is performing relatively well in the nervous environment, and although bulls are still not out of the woods, we still expect a bounce above $60 in the coming week.

We will still have the weekly US crude inventory data coming out during the morning session on Wall Street, and volatile trading will likely continue in the throughout the day, with the $54.50 short-term support level and the $57.50 resistance level being in the center of attention.

Gold Futures, 4-Hour Chart Analysis

Gold is also having an interesting session so far, as it is testing the short-term resistance zone near $1215 due to the Brexit uncertainty and the pullback in yields. The precious metal is still well below the consolidation pattern that developed in October, and it would need to rise above $1220 to trigger a short-term trend change, but should risk assets continue their downtrend, gold could quickly rally as high as $1250.

ChartBook

Major Stock Indices

S&P 500 Futures, 4-Hour Chart Analysis

Nasdaq 100 Futures, 4-Hour Chart Analysis

VIX (US Volatility Index), 4-Hour Chart Analysis

DAX 30 Index CFD, 4-Hour Chart Analysis

FTSE 100 Index CFD, 4-Hour Chart Analysis

EuroStoxx50 Index CFD, 4-Hour Chart Analysis

Nikkei 225 Futures, 4-Hour Chart Analysis

Shanghai Composite Index CFD, 4-Hour Chart Analysis

EEM (Emerging Markets ETF), 4-Hour Chart Analysis

Forex

EUR/USD, 4-Hour Chart Analysis

USD/JPY, 4-Hour Chart Analysis

EUR/GBP, 4-Hour Chart Analysis

AUD/USD, 4-Hour Chart Analysis

Commodities

Copper Futures, 4-Hour Chart Analysis

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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4.7 stars on average, based on 394 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

Capitulation

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Hi Everyone,

Those of you who’ve been reading these market updates, as well as our crypto research papers, know that one of my favorite subjects is the evaluation of cryptoassets.

Last week, we released a video that introduces some of the concepts for assigning value to different projects. Last night, the popular crypto website CoinDesk has released a tool that takes this to an entirely new level.

Make no mistake, this visualization tool is nothing less than groundbreaking. It allows alternative investors to easily compare the various cryptoassets using five key parameters: Price, Network, Exchange, Social, and Development.

Here’s a screenshot comparing Ethereum to XRP….

Another interesting thing you can see in these visualizations was the effect of the recent stress tests on the Dash blockchain that happened on November 12th and 13th.

CoinDesk has also been very transparent about their methodology and how they arrive at the figures so we can be sure that we’re looking at actual data and not any personal biases by the tool makers.

You can read more and watch their intro video here and of course play around with the tool at: coindesk.com/data

We still have a long way to go to develop these concepts but this is one massive step forward. Well done!

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • More Tech Stock Trouble
  • Brexit Capitulation
  • Crypto Selloff

Please note: All data, figures & graphs are valid as of November 15th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Stocks fell yesterday, again led by Apple, the tech sector and manifesting in the Nasdaq. Today things seem to be bouncing upwards despite uncertainty in the press about the Brexit negotiations.

Conferring with my clients and colleagues in London lately it seems that just about everyone is struggling to keep up with exactly what is going on. So here’s a helpful flowchart that displays just how simple this is.

The complexity of course is showing up directly in the price of the Pound Sterling. This whipsaw action on the GBPUSD seems to be intensifying lately and the above news this morning is seeing the Pound capitulate.

Crypto Capitulation

As you may have noticed, the crypto markets took a sizable hit yesterday following the sell-off in the tech sector. Though we’ve seen that Bitcoin is usually fairly disconnected from the stock markets, there have been distinct moments lately where they have moved in tandem, which leads me to believe that there can be some level of spillover.

A wide variety of factors may have contributed to the fall yesterday. I even saw one analyst trying to peg this on Brexit, which somehow just doesn’t seem very likely.

Most of the news in the crypto sector over the last few days has been about the Bitcoin Cash hard fork happening today. The fear is that the hash wars in BCH could end up affecting BTC. To be clear, any miner that switches their BTC hash over to BCH will be paying a very heavy price.

Even in the unlikely event that we see a sizable reduction in Bitcoin’s hashrate, it might temporarily affect transaction costs on Bitcoin but it will probably not have any lasting effect on bitcoin’s price and certainly not its stability.

From everything I’m seeing, the move last night was more technical in nature. The break below $6,000 was quite significant and there has no doubt been a slew of stop losses that have been built up over the last few weeks.

Several analysts have been talking about the capitulation phase that often marks the end of a bear market. This poll from NewsBTC could also be an indication that we’ve now seen some of the last weak hands shaken off their position and that those who remain are likely not to be scared off by further downward pressure.

Whatever the cause of this move and even though the price action is down, in some way, it’s good to see volatility returning to this market.

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.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

eToro is a multi-asset platform which offers both investing in stocks and cryptocurrencies, as well as trading CFD assets.

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.

Best regards,
Mati Greenspan
Senior Market Analyst

Connect with me on….

eToro: @MatiGreenspan | Twitter: @MatiGreenspan | LinkedIn: MatiGreenspan | Facebook:MatiGreenspan

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 134 rated postsSenior Market Analyst at Etoro.com.




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