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The Bitcoin-Google Connection?

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Bitcoin has more than doubled over the past month, as the hype and euphoria around crypto-investing continue to outweigh fears of a burgeoning asset bubble. For one astute cryptocurrency analyst, bitcoin’s year-long rally appears to be a self-fulfilling prophecy.

Google ‘Bitcoin’ and See How Many Results Show Up

At the time of writing, a simple google search of ‘bitcoin’ yields about 152 million results. That potentially explains why Bitcoin and competitor Etherum delivered the best return of any asset in the first half of 2017.

The BTC/USD exchange rate has an unusually high correlation with Google search trends for the word ‘bitcoin,’ according  former ARK Invest analyst Chris Burniske. (If you’re not familiar with Chris, he authored the widely cited whitepaper BITCOIN: A Disruptive Currency.)

In Burniske’s view, interest in bitcoin further drives the price of the BTC/USD – a phenomenon he jokingly refers to as “a virtuous Satoshi cycle”. August is already shaping up to be Bitcoin’s most popular month, based on Google search trends.

Bitcoin’s search popularity have also rubbed off on competitors like Ethereum. However, none have enjoyed anywhere near the exposure of BTC.

BTC/USD: Commanding New Highs

While the cryptocurrency market has gone from one extreme to the other this summer, the underlying trend is overwhelmingly positive. The BTC/USD has not only doubled over the past 30 days, it has gained a staggering 320% this year.

The pair reached multiple record highs this week, with Bitstamp reporting a new closing high of $4,306.23 on Monday. As of Wednesday, some exchanges priced bitcoin above $4,480.00, a move that has boosted its total market value to nearly $69 billion. The total size of the cryptocurrency market is fast approaching $140 billion.

Despite the recent price explosion, sustained momentum in the RSI and MACD suggest further upside is in store. Whether evaluating from a technical or purely fundamental perspective, gains are likely to continue over the short term.

Fiat Currencies Look to FOMC

Cryptocurrencies are often described as censorship-resistant because they are not directly influenced by governments. They are also outside the grip of the central banking system that has largely shaped the post-crisis period. The same cannot be said of fiat currencies, which are highly susceptible to central bank policies.

The world’s most powerful central bank will attract investor attention on Wednesday. At 2:00 p.m. ET, the Federal Reserve will release the minutes of the July FOMC meeting, which saw policymakers vote against raising interest rates. The meeting minutes may provide clues about the Fed’s plan to wind down its massive $4.5 trillion balance sheet – a process expected to begin this year.

The FOMC will hold its next policy meeting September 19-20, making the upcoming minutes all the more important. The U.S. dollar, which rose to nearly three-week highs on Tuesday, will be especially sensitive to the release.

BTC/USD (BitStamp)

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 499 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

Crypto Update: Altcoins Reverse Gains as Bitcoin’s Surge Fizzles Out

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The cryptocurrency market had one of the wildest days in months following yesterday’s epic short-squeeze in Bitcoin that triggered a strong segment-wide rally. While Bitcoin managed to break through several key resistance levels, the major altcoins failed to join the break-out, even as temporarily, some of them managed to move above primary resistance.

Ethereum topped $500 briefly, while Ripple cleared the $0.51 level, as BTC neared the $7650 resistance, but altcoins failed to trigger short-term buy signals, as they promptly reversed gains. As correlations remained very high despite the rally, and a bullish leadership is still missing, the market as a whole still shows bearish characteristics, even as the buy signal is intact in Bitcoin, for now.

Yesterday we also pointed out the relative weakness of altcoins and traders should still remain cautious with new positions, as, despite the recent moves, the technical setup is still unchanged in the segment.

BTC/USD, 4-Hour Chart Analysis

Although Bitcoin reached the next major resistance level at $7650, the weak altcoins now dragged the largest coin back below the $7350 support, and the odds of failed break-out are growing in BTC as well. While the buy signal is intact, the coin needs to stay above $7000 to avoid a bearish reversal, with further support below that found at $6750 and $6500.

Ethereum’s Reversal Warns of a Fake-Out

ETH/USD, 4-Hour Chart Analysis

While ETH was close to triggering a buy signal, we warned traders that without follow-through the short-term trading range and the declining trend would remain unchanged. The relative weakness of Ethereum persisted today as well, and the coin failed to stay above $500, and now it’s back on a short-term sell signal, and it gave back all off yesterday’s late-day surge.  Primary support is still found at $450, with other levels at $420, $400, $380, and $360 while resistance is ahead at $500 and between $555 and $575.

LTC/USD, 4-Hour Chart Analysis

The bearish leaders, like LTC, Monero, NEO, and Dash couldn’t get durably back above the key breakdown levels, and the major altcoins all followed a similar path to ETH thanks to the elevated correlations. As no buy signals popped up, a trend change wasn’t completed even in the relatively stronger coins. The failed break-outs could point to another move towards the June lows, and traders should still remain cautious with new positions here.

XRP/USDT, 4-Hour Chart Analysis

Ripple couldn’t durably move above key $0.51 level despite yesterday’s move, and the coin is now back below the primary $0.49 support following the bearish reversal. The relatively weak coin is still well above the June low, but another test is now likely, and the long-term setups remain dangerous. Further resistance is ahead at $0.54 and at $0.575, while primary support is now found at $0.45.

Featured image from Shutterstock

Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

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 294 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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Analysis

Technical Analysis: BTC/Tether

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Tradingview is a web application that allows full charting abilities for free. Different online brokerages have different charting abilities and tools.  Using tradingview.com, I was able to utilize Fibonacci zones with the following levels: 23.6%, 38.2%, 50.0%, 61.8%, and 100.00%. I did not set support or resistance levels because they are irrelevant to this analysis. Using indicators such as volume, moving-average convergence divergence (MACD), and Relative Strength Indicators, we are able to predict the movement in the price of Bitcoin relative to Tether. One Tether (USDT) is equal to one U.S dollar, give or take 3 cents.

This 3 day analysis uses price movements plunging into the 61.8% Fibonacci zone to trigger a buy signal. From there, we verify the buy signal with the MACD indicator below the chart. Notice how the MACD looks like a sell signal, but in fact goes back negative. Moving from a negative spread to a positive spread, triggers the buy signal as the price bounces off of the 61.8% Fibonacci level.

Following the next two days, I conducted another analysis using the same strategy. This time I inserted a support where three touches occur in the price.  Bitcoin’s price took a dive on volume pointing to a massive selloff. We were able to capitalize on this by waiting until the price crossed the Fibonacci barrier into the 61.8% zone. From there, the MACD spread checked out at -8.68. A buy signal was created and we waited until the price neared the top of the 50.0% zone.

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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1 stars on average, based on 1 rated postsMichael Genna works in Business Development at Benzinga, a financial media and technology company located in downtown Detroit. He attends Wayne State University, majoring in finance with a minor in economics.




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Bitcoin

Billionaire Hedge Fund Managers Spar on Bitcoin’s Potential

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The bitcoin price is now gunning for $7,500, and after yesterday’s performance, it’s no time to be underestimating the leading cryptocurrency by market cap. It’s been too long since bitcoin’s 10% advance would seem modest in comparison to some of its altcoin peers, but that’s precisely the case today, with coins like Stellar, Cardano and Zcash all advancing between 15%-33%. Bitcoin bulls are coming out of the woodwork, including the likes of billionaire hedge fund manager Marc Lasry, who appeared on CNBC.

Lasry, who is a co-founder of the $9.6 billion investment firm Avenue Capital Group, is calling for bitcoin $40,000. The catalysts will be bitcoin making its way into the mainstream and becoming less cumbersome to trade, the timing for which can be more difficult to predict. Lasry has been a bitcoin bull since at least last year when he reportedly kicked himself for not getting in on the cryptocurrency when it was still trading in the low hundreds of dollars. He told CNBC:

“As it gets more into the mainstream, and as more markets end up allowing it to trade where it’s freely tradable, to me that’s more of the bet.”

While hedge funds are among the institutional investors that are expected to begin pouring capital into the crypto space, Lasry has bitcoin in his personal portfolio, not the firm’s, despite the fact that Avenue Capital is no stranger to risk, as evidenced by distressed debt as its investment strategy. But with companies like Coinbase providing a custody solution, there are going to fewer and fewer reasons for hedge fund traders not to join. Especially given the bullish technical signs that are ahead.

Well, maybe not Lasry’s billionaire peer Ken Griffin, who is at the helm of hedge fund Citadel. He told CNBC he doesn’t believe in bitcoin, and neither do any of his portfolio managers. Griffin finds bitcoin to be a “head scratcher” and even advised the up-and-coming generations to find something more productive to do rather than wasting their money on cryptocurrencies.

Don’t expect Citadel to open a position in bitcoin any time soon, as Griffin told CNBC: “I have a hard time finding myself wanting to be in a position of being a liquidity provider for a product I don’t believe in.”

Moving Average

Meanwhile, with the cryptocurrency market finally out of the doldrums, you might be wondering where it goes from here. Fundstrat Co-Founder Thomas Lee pointed out on CNBC that the bitcoin price currently trading 30% below its 200-day moving average. From a historical perspective in 2011 and 2014, that’s a “positive signal.”

Source: CNBC

Both times that bitcoin was trading 30% below its 200-day moving average, it found a bottom within a month. And looking ahead for the coming six months, “you’re going to do pretty well owning bitcoin here,” Lee said. So basically, he’s advising investors to hold their bitcoin.

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 24 rated postsGerelyn has been covering ICOs and the cryptocurrency market since mid-2017. She's also reported on fintech more broadly in addition to asset management, having previously specialized in institutional investing. She owns some BTC and ETH.




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