August and Everything After

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.