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Bad at Math

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There’s a famous quote…

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“The lottery is a tax for people who are bad at math.”

It seems the Trump administration is a tax for a country that stopped caring about government.

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For all those who have expressed to me their opinion that these daily market updates are too opinionated, this view comes directly from the world-class economist Larry Summers, the man who could have had Janet Yellen’s job but turned it down.

In a piece published by the Financial Times, he writes…

As Larry says, this is a very grave error for a cabinet that is mostly comprised of billionaires and businessmen.

Mati Greenspan
eToro, Senior Market Analyst

 

Please note: All data, figures & graphs below are valid as of May 24th. All trading carries risk. Only risk capital you’re prepared to lose.

Market Overview

European law makers once again delayed action to solve the Greek Debt Crisis. This is one of the last apparent remnants of the Great Recession of 2008 and at this point, it seems Greece may remain in debt for a very long time.

The Greek government, the ECB, the heads of other EU states, along with the International Monetary Fund tried desperately to reach a deal this week but once again, the deal was delayed, this time until June 15th.

After a 7 hour meeting, the IMF broke off the talks saying that the current proposal did not do enough to provide relief for the people of Greece or for financial markets and that the level of debt under these circumstances would remain unsustainable.

Though Europeans are generally good at math, and everybody understands that at the current pace Greece could never hope to repay the mountain of debt, they are bad with timing. This is not the first time they have kicked the can down the road and it would be very surprising to see a long term solution on June 15th.

The Euro has come down a bit against the Dollar this morning but as we can see, it’s still carrying a lot of momentum from Emanuel Macron’s victory in the French Elections…

At this time, eToro sentiment on the EURUSD is 68% short.

China Downgraded

Earlier today in the Asian session, the Moody’s rating agency decided to downgrade China’s credit score from Aa3 to A1. Not that A1 is a bad rating. Just that Moody’s feels that Chinese growth going forward will need to come from monetary easing, which would have the effect of increasing their overall debt.

The move caused some moves in the Chinese stock market as well is in the Renminbi. However, the moves were quickly reversed.

Here’s the spike on USDCNH…

There are two reasons for the quick reversal. First, that though the credit rating was downgraded, Moody’s has actually upgraded their outlook from negative to stable. Meaning, that even though they’re relying heavily on quantitative easing, it isn’t likely to deliver any sudden shocks to the market.

The second reason is a bit more cultural. Speaking with our Market Analyst in China over WeChat, today I learned…

“Chinese investors don’t care about who is Moody’s and what they do. The government here will always do what they plan.”

Macy Ma
@Macygogo

Furthermore, our customers and employees in China are far more interested in the Cryptoworld at the moment.

Cryptoworld at the Moment

…and with good reason.

The overall value of all digital assets currently in circulation has reached $86.5 Billion. It has added $8 Billion in the last 24 hours alone.

The second most popular Cryptocurrency, Ethereum, is up 11% this morning. The day has barely just begun and we’re already at a fresh new all time high.

Most incredible is the daily chart. I simply can’t get over this one…

If I had more time I would calculate the percentage growth since the beginning of the year, but I myself am sometimes bad at math.

Wishing you an amazing day ahead!!

This content is for information and educational purposes only and should not be considered investment advice or an investment recommendation.

Past performance is not an indication of future results. All trading carries risk. Only risk capital you’re prepared to lose.

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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Bitcoin

Bitcoin Hits $100 Billion as Record Rally Continues

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Bitcoin’s epic rally intensified Friday, as the token reached $6,000 for the first time in its history, bringing the total market value above $100 billion.

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Bitcoin’s Fresh Intraday High

BTC/USD touched an intraday high of $6,064.14, bringing its total market cap to $100.8 billion. That’s roughly $85 billion higher than where the market started in January.

At press time, bitcoin was trading around $5,993, up more than 5% on the day. From a technical perspective, the digital currency is considered overbought. However, the technicals are typically less reliable during extreme price movements like we’ve seen in recent weeks. The world’s leading cryptocurrency has added a staggering 520% this year.

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Bitcoin’s rally didn’t really extend to other cryptocurrencies Friday. Ethereum continued to trade just north of $300, while Ripple (XRP) consolidated a hair below 21 U.S. cents.

The cryptocurrency market’s combined market cap is roughly $173.4 billion, which is roughly $3 billion less than the Monday’s peak.

$10,000 Bitcoin?

Bitcoin could be heading north of $10,000 a unit in the not-too-distant future, according to a survey conducted by CNBC. About 49% of the 23,118 people who voted in the CNBC poll said the digital currency will reach the five-figure threshold.

Roughly 16% of respondents said bitcoin prices are heading to between $6,000 and $8,000. About a third selected the Jamie Dimon option by calling bitcoin a fraud.

Though unscientific, the survey clearly shows that the mainstream is paying attention to the rapid acceleration of cryptocurrency. At least a portion of them will investigate the matter further, and likely conclude that digital assets are a welcome addition to their portfolio.

It’s impossible to associate bitcoin’s success with just one catalyst, but it’s clear that institutional support, the allure of the blockchain and favorable regulation in markets like Japan are feeding the rally. An anticipated November hard fork is also helping to shore up price.s

A Day of Milestones

Bullish sentiment also rubbed off on U.S. stocks Friday, with the Dow Jones Industrial Average extending its rally above 23,000. The blue-chip index climbed tacked on 165 points to close at 23,328.63 after the U.S. Senate passed the 2018 budget by the narrowest of margins.

The S&P 500 and Nasdaq Composite also set fresh all-time highs, with financials and industrials leading the rally.

Featured image courtesy of Shutterstock. 

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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Analysis

Cryptocurrency Analysis: Bitcoin Tests $6000 as Market Settles Down

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Bitcoin is in the center of attention yet again, as the most valuable coin is knocking on the door of the $100 billion level in market capitalization. The coin touched our long-term target at $6000 on several exchanges, but it’s now trading slightly below the historic level.

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While the rest of the market is quiet, BTC is very active, and it could be in for a volatile weekend, as despite the long-term overbought readings, the short-term uptrend is clearly intact. That said, investors should avoid opening new positions here, and consider lowering their exposure further, while traders should only trade with smaller than usual sizes. Support levels are found at $5400, $5000, and near the $4650 level.

BTC/USD, 4-Hour Chart Analysis

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As the rest of the majors are still recovering from the recent correction, the total value of the segment is below its all-time high, with BTC’s dominance now standing at 57%. Most of the largest coins are little changed, with Monero and Liteocin showing considerable strength and IOTA still being the weakest of the majors. With all attention on BTC let’s see how the most traded altcoins look before the weekend.

(more…)

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Cryptocurrencies

Trade Recommendation: Ethereum

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The price bounced from 300.00 level. RSI and a reversal candlestick pattern confirmed price reversal. MACD supports upward movement and DMI allows opening long trades. Pending orders for buy should be placed above the local swing at 318.00 level. Stop orders should be placed below 300.00 support at 286.00 level. Profit targets are 350.00 and 390.00 levels. If you don’t use leverage, recommended trading volume for this trade is up to 10% from your deposit.

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Market: ETHUSD
Buy: 318.00
Stop: 286.00
Profit Targets: 350.00 and 390.00

The trading signal is based on Poloniex chart.

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Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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