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What an Awesome Sell Off

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Well, it finally happened. Bitcoin saw a massive retracement of 18.76% from the new all-time high of $11,346. The freefall lasted for a total of 5 hours and 25 minutes and brought the price down a total of $2,129 from top to bottom making the quickest ever drop in the young digital currency’s history.

We’ll get into the possible reasons for the sell-off below and where we might be going next but I wanted to say that no matter what happens in the next 13 hours, November will have been one of the strongest months on record for the cryptocurrency industry.

@MatiGreenspan
eToro, Senior Market Analyst

 

Please note: All data, figures & graphs are valid as of November 30th. All trading carries risk. Only risk capital you’re prepared to lose.

Market Overview

The sell off yesterday wasn’t restricted to the currency market. It actually started in gold and quickly spread to the entire tech sector.

Over the past few months, we’ve been seeing massive gains in tech stocks, commodities, and industrials, of which the crypto market is a mere amplification.

In this chart, we can see that gold’s drop of about $10 an ounce (yellow circle), which occurred about an hour before bitcoin peaked. Once the stock market opened on wall street we can see the blue line (facebook) opening with a massive plunge.

The stock market as a whole didn’t do too poorly yesterday with the healthcare sector making up for most of the losses in tech.

We’ve already seen quite a bounce back on bitcoin but it’s still not clear if the sell off is over. We should be watching the price action very closely over the next 24 hours for any clues to what could happen this weekend.

For those who have been waiting patiently for a pullback this just might be your chance. Of course, a prudent stop loss may be in order just in case we do get lower.

I put a quick poll out on Twitter yesterday to try and gauge what you guys are thinking. With 25 votes so far we don’t really have the best sample size but please feel free to weigh in here as the poll will be open until the end of the day.

Congestion

In yesterday’s update, we showed that the number of unconfirmed bitcoin transactions was standing at 50,000, which is a bit high but somehow sustainable. At the hight of the sell-off last night it reached as high as 97,000 pending transactions, which is already a dangerous level.

Though minors are working hard to confirm transactions as quickly as possible, as of this writing the mempool is still up around 74,000.

What’s a bit more worrying is the frequency of transactions which is currently quite high, with an average of 4.18 per second.

We’ll keep an eye on this as far as bitcoin is concerned. Of course, the rest of the crypto market is strongly correlated with bitcoin’s performance but if this congestion does cause a drop in BTC we might see other cryptos gaining against it as most of them are newer and more scalable than the original blockchain.

What else?

The big OPEC meeting is today. Markets expcet OPEC and Russia to extend the current production cuts for an additional 9 months. If they fail to meet this expecation, we could see the price drop even further.

Also keep an eye out for updates from Germany and the UK as they are both close to reaching political deals that could move the markets.

Let’s have an awesome day!!

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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4.7 stars on average, based on 114 rated postsSenior Market Analyst at Etoro.com.




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  1. axion

    November 30, 2017 at 6:14 pm

    What chart?

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Market Overview

Market Update: U.S. Stocks Under Pressure Following Trump-Putin Summit as Oil Prices Hit Three-Month Low

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U.S. stocks finished mixed to lower on Monday, with sectors tied to commodities shouldering the majority of the losses following a major rout in oil prices.

Stocks Mostly Lower

The large-cap S&P 500 Index fell 0.1% to close at 2,798.43, with eight of 11 primary sectors finishing in the red.

Energy stocks were the worst performers, falling 1.2% as a cluster, as oil prices plunged to their lowest levels in three months. Materials and industrials followed suit.

Declining technology shares bumped the Nasdaq Composite Index from all-time highs. The index closed down 0.3% at 7,805.72.

Dow industrials bucked the downtrend, gaining 44.95 points, or 0.2%, to 25,064.36.

The CBOE Volatility Index, also known as the VIX, jumped more than 5% on Monday to close at 12.83. The so-called “fear index” briefly traded at six-month lows on Friday.

Trump-Putin Summit a “Good Start”

U.S. President Donald Trump says his meeting with Russian counterpart Vladimir Putin in Helsinki was a “good start” in normalizing strained relations between the two superpowers.

Prior to the meeting, President Trump blamed previous administrations for the worsening relationship between both countries. Trump doubled-down on that message in a joint session following the meeting.

“I hold both countries responsible. I think that the United States has been foolish. I think that we’ve all been foolish. We should have had this dialogue a long time ago, a long time, frankly, before I got to office,” Trump said.

Although it’s not entirely clear what the two leaders talked about, various news sources have confirmed that talks went into a working lunch after two hours of closed-door talks. U.S. National Security Adviser John Bolton confirmed that the meeting had no set agenda.

Many within the Washington camp wanted the meeting to be cancelled after 12 Russian military agents were charged with hacking the presidential campaign of Hillary Clinton.

Cryptocurrency Market Recovers

Bitcoin and other crypto-assets swung back into positive territory Monday amid reports that BlackRock, one of the world’s largest asset managers, has assembled a working group to explore digital currency adoption.

Cryptocurrencies added $15 billion in market capitalization over 24 hours, with the bulk of the gains occurring shortly after the BlackRock report hit the airwaves. The total market peaked near $271 billion, according to CoinMarketCap, as trade volumes spiked 34% to $13.8 billion.

The bitcoin price reached a high near $6,690 as trade volumes topped $4.9 billion. The largest cryptocurrency by market capitalization is closing in on last weekend’s swing high near $6,900. Prices have failed to breakout of the $7,000 ceiling in well over a month.

In terms of percentage growth, bitcoin cash was the best performer in the top-ten, rising 9.5% to $795.

Ethereum prices jumped 5.6% to $477 while EOS gained 8% to $8.02.

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 497 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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Analysis

US Opens New Front in Trade War as Oil Plunges

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Financial markets are relatively calm today, with most of the major stock benchmarks being virtually unchanged after the weekend. The energy segment is experiencing the most activity as the volatile correction in crude oil prices continues. Besides that, the Euro’s relative strength is notable, but summer trading conditions remain dominant across the board, with low volumes and choppy intraday price action in most of the asset classes.

Shanghai Composite, 4-Hour Chart Analysis

There seems to be no stopping in the global escalation of trade tensions, as amid the Helsinki meeting between Trump and Putin, the US launched an official probe concerning the retaliatory tariffs of its largest trade partners. The move could deepen the standoff not just between the US and China, but the EU and its other allies as well, and global growth is already weakening, so with further trade troubles growth could grind to a halt.

S&P 500 Futures, 4-Hour Chart Analysis

While global stocks are still well off their highs, and Chinese equities remain in bear market territory, the main US indices are holding on to their recent gains, with the Nasdaq being the by far the strongest benchmark globally. The slightly weaker S&P 500 is also trading at a 4-month high despite trade war fears, and as the first earnings reports of the second quarter were slightly better than expected, with Bank of America beating today before the bell, bulls are still in control on Wall Street.

As for economic news, the much awaited US Retail Sales report delivered a small positive surprise, and last month’s figures were also revised higher. The report helped risk assets during the US session, even as the disappointing Chinese Industrial Production number weighed on investors sentiment earlier on.

Dollar Index, 4-Hour Chart Analysis

Despite the bullish numbers, the Dollar lost a bit of ground against its major peers, although forex markets were less active today than recently and the most traded pairs traded in relatively tight ranges after Friday’s hectic session.

Oil Back Below $70 per Barrel as Commodities Remain Weak

WTI Crude Oil, 4-Hour Chart Analysis

Crude oil prices are sharply lower yet again, with the WTI contract leading the way lower as tight short-term supply conditions got better in Canada, and the general weakness in the global commodity segment infected the market oil. The IMF’s report on weakening global growth, and the chatter about the release of some of the global strategic oil reserves also weighed on oil, and the WTI contract is now at $68 per barrel after trading as high as $75 just one week ago.

Copper, 4-Hour Chart Analysis

Elsewhere in the commodity space, it has been a quiet Monday session, with gold drifting slightly lower after a weak rally in early trading, as selling pressure is still apparent among precious metals. Copper, which also has been suffering in recent weeks as Chinese assets got slammed lower, is still consolidating above the strong long-term support zone that we pointed out last week.

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 292 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

Slowly but Surely

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Hi Everyone,

In a country that has seen an estimated 99% devaluation of their currency over the last year, even $1 is seen as a lot of money.

These images that recently surfaced on Reddit are reportedly showing a donation of just $230 that has been channeled into Venezuela through a cryptocurrency called Nano.

Of course, it’s incredibly difficult to verify the authenticity of such photographs, but having the username and subreddit written on paper in some of the shots helps things.

As we’ve stated before, the real world adoption of cryptocurrencies is happening now on the ground in places where it’s needed most, and Venezuela is argua bly one of those places. The success story highlighted above is hardly an isolated incident. The group Eat BCH has been doing this since last year.

A quick look at the Local Bitcoins volume there shows another spike in peer to peer transactions over the past week. Notice how volumes peaked in April of 2017, then died down during the peak of the bitcoin hype in November/December but are now rising again steadily.

The last bar on the chart shows a total of 590 BTC, which at today’s prices is $3.8 million, which may not seem like much but in the current economy of Venezuela is actually huge.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Trump Meets Putin
  • China Growing Slowly
  • Quiet Crypto

Please note: All data, figures & graphs are valid as of July 16th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

All eyes on Helsinki this morning as President Trump prepares for his closed-door meeting with Vladimir Putin.

Putin is still beaming after hosting a very successful World Cup and President Trump is coming from a rather controversial European tour. The fact that they’re even having this one on one meeting is emboldening critics who say that the two are in collusion.

One of the things to watch out for is crude oil. Trump has been rather critical of OPEC’s efforts, urging them to do more to push down the price. The price of gas in the United States has been rising lately and it is putting pressure on his base.

Russia has so far maintained that the surge in pricing is due to Trump’s new sanctions on Iran, which have reduced supply in the market.

Last Wednesday, oil slid 4.8% (purple circle) from the top of its massive bull run that has been playing out over the last year.

China Slowly

Markets in Japan are closed today in observance of Marine Day. Perhaps it’s for the best as Asian stocks are taking a hit.

For a change, the narrative isn’t necessarily about the trade war either, at least not on the surface. China’s GDP growth figures announced early this morning highlighted the lackluster economy. Here we can see GDP growth rate since 2003. What’s clear from this graph is that a reading of 6.7% is really on the low end.

However, even though low, the numbers weren’t unexpected. As indicated by the brown bar in the above chart, the numbers were exactly as forecasted. The China50 index is currently 24% off of its peak from January 24th, so today’s action isn’t that much of a hit in the grand scheme of things.

The Nasdaq, on the other hand, hit another new all-time high on Friday, while the precious metals resumed their descent.

Quiet Crypto

Prices in the crypto market have remained stable over the weekend. In fact, the price of bitcoin hasn’t moved much at all since early June.

As we’ve stated before, slow-moving prices are a good thing for cryptocurrencies. The more you can count on a stable exchange rate, the more likely people are to use the asset as a store of value.

The downward sentiment on Bitcoin is also showing signs of abating. As we can see in the graph below, the strongest trendline from this pullback (dotted blue line) was broken in early April, and the second strongest (yellow line) has been broken at the start of July.

Some chartists theorize that we could be in for another leg down towards $5,000 a coin, which wouldn’t surprise me if it does happen but could also be done in a calm manner that would not indicate any further downward pressure.

As always, please feel free to contact me directly with any questions, comments, feedback, or additional insight.

Wishing you 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.

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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4.7 stars on average, based on 114 rated postsSenior Market Analyst at Etoro.com.




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