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Bitcoin Price Claws Back Above $7,000 with Further Gains Likely

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Bitcoin’s price swung back above $7,000 Tuesday as investors rallied behind reports that Goldman Sachs is exploring a custody offering for cryptocurrency funds, a move that could hasten adoption at the institutional level. Meanwhile, the technical charts suggest bitcoin’s short-term recovery is only getting started as the bulls eye a re-test of the 100-day moving average.

BTC/USD Price Levels

The bitcoin price reached a high of $7,150 on Bitfinex Tuesday as investors bid up the digital currency from yesterday’s lows of $6,841. The bitcoin price was last seen trading at $7,080 for a gain of 2%.

BTC/USD found support at the 50-day moving average, with the bulls now eyeing a re-test of the 100-day MA currently situated around $7,450. Overall, momentum remains fairly weak with the Relative Strength Index (RSI) hovering in the low-to-mid 40s.

Trading volumes have also recovered over the past 24 hours, according to data provider CoinMarketCap. Exchange-traded volumes in bitcoin reached $4.2 billion on Tuesday after hitting a low of $3.7 billion on Monday.

Bitcoin Benefits from Positive Speculation

Bitcoin’s minor recovery comes on the heels of speculation that Goldman Sachs is exploring ways to solve crypto’s custody challenge. As Hacked reported Monday, the Wall Street mega bank is considering holding securities on behalf of cryptocurrency funds to safeguard digital assets from cyber attacks.

Meanwhile, the U.S. Securities and Exchange Commission (SEC) is expected to weigh in on an application for a bitcoin exchange-traded fund (ETF) that analysts say has the best chance of being approved. The joint application submitted in June by VanEck and SolidX plans to insure physical bitcoin against theft or attack, setting it apart from other attempts to securitize digital assets. A decision that accepts, denies or delays the application could come as early as this week.

A report published Tuesday by Bloomberg also highlights bitcoin’s dramatic evolution over the past five years. According to the U.S. Drug Enforcement Administration (DEA), the ratio of legal to criminal activity in bitcoin has flipped, with speculators now dominating the market.

Five years ago, illegal activity accounted for roughly 90% of bitcoin transactions; today, that figure has dwindled to just 10%.

Bitcoin’s market share has also climbed over the past three months with investors disavowing lesser known, and often more volatile, digital assets. Fundstrat’s Tom Lee told CNBC Tuesday that investors have decided that “bitcoin is the best house in a tough neighborhood.”

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 538 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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Altcoins

Crypto Psycho: Fear Could Be Our BFF

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Crypto prices continue to confuse.  For all the logic related to supply and demand, the reality these days continues to be that prices are being determined by emotion.  

The fundamental news these days is mixed. For example, take todays mention of Bitmain, one of the most valuable cryptocurrency companies, is expecting a September filing of an IPO for as much as $18 billion. That would eclipse even Facebook back in 2012.  The buzz swirling around Bitmain is about more than just crypto. Even so, $18 billion makes a loud and positive statement about investor interest.

On the other side of the digital coin, we have declarations from guys like Ken Bianco, who happens to be part of the US Treasury Office of Terrorism and Financial Intelligence.  Last week he spoke in threatening terms of how the US intends to enforce its AML/KYC regulations virtually everywhere in the world. If this sounds a little bit like an infamous German gentleman with an odd looking mustache, you have your history right.

In between these two extremes, of course, there has been lots of information each day that correlates closely with theoretical supply and demand for crypto, none of which has made a bit of difference as crypto prices continue to tumble.

Nevertheless, an objective point of view holds that there is a disconnect between what is happening in reality and crypto prices.

So unlike last year when prices were rising for no other reason than the fear of missing out (FOMO), today they are falling in the face of the fear of losing all (FOLA).  Maybe it’s fear that is the key to the future.

FOLA Could Be Our Friend

On many occasions we have mentioned how important traditional investors have used relative value.  We continue to believe that global stock and bond markets are overvalued using metrics like price earnings ratios and other financial measures.  While quantitatively speaking, this point is absolutely right, it hasn’t resonated. Since the beginning of the year, for example, investors in the Nasdaq Composite has enjoyed a 13% gain.

This gain comes even though Facebook, the fourth biggest stock in the cap-weighted Nasdaq Composite, has been a dud.  By comparison, over the exact time last year investors in the Nasdaq Composite experienced a 12% gain on the way to a bountiful 25% full year return. Overall, these folks have had very little reason to be unhappy, or fearful.

Tipping Point Could Come From Trump

Credit Datatrek for keeping a thumb on the pulse of the outside world.  Here are some insights from a recent poll on the fears of institutional money managers.  The two most important issues in late March were: unpredictable political events in Washington DC and Trade/tariff disagreements between the US and China.  Some 70% of respondents were very concerned or somewhat concerned about these issues.

Since then, things have only become more critical.  Washington’s confrontational foreign relations strategy is shaking global currency exchange markets.  In the last two weeks the Russian Ruble has lost 12% against the US Dollar. At the same time the US Dollar has increased over 40% against the Turkish Lira.  

While it can be argued that Turkey is of little importance to the global monetary system, Russia is not. Turkey plays a key role in the Middle East and any instability in that area is enough to strike investor fear that is reflected in energy, inflation and currency markets.

In earlier times, this scenario pointed investors in the direction of gold.  This is not happening. At the time of this writing, gold had just broken through $1,200 having fallen 8% this year.  In the face of the Turkish situation, this signals a loss in confidence for gold in a region of the world with a historic close connection to the metal.

Only Theory So Far  

Now if a strong correction were to take place in stock prices or an equally strong rally in crypto, there would be evidence of investors taking advantage of the relative value here. Unfortunately, at this moment that is not taking place. Bitcoin prices are down marginally but sellers continue to pound most altcoins. Until this changes, crypto prices are being driven down by FOLA.

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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4.4 stars on average, based on 95 rated postsJames Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.




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Analysis

Crypto Update: Ethereum Plunges Below $300 as Bitcoin Fails at $6500

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Despite a weak bounce during the weekend, the cryptocurrency segment continues to trade under heavy selling pressure, with the top altcoins till underperforming Bitcoin. Ethereum is the most obvious laggard, and it fell below the $300 level today, hitting yet another 9-month low and extending the structural bear market with another swing low.

Almost all of the majors are below or near their recent lows, but Bitcoin continues to show relative strength, and a few of the recently weak coins, notably Monero and Litecoin, are trading slightly above their swing lows. The other most important bearish currency, Ripple is also trading at new lows, and with that in mind, we remain defensive on the coins, as despite the deeply oversold momentum readings, there is still no sign of a developing leadership in the segment.

ETH/USD, 4-Hour Chart Analysis

All eyes are still on Ethereum, as the second largest coin is pushed lower relentlessly ever since its break-down below the $400 level last week. The coin continued to lead the way lower so far today, and with the break below the $300 level, the market cap of Ethereum is now just $30 billion, while the total value of the market is close to $200 billion again. The coin is now just above the $275-$280 support zone and it remains on sell signals on both time-frames, with resistance ahead at $335 and $360.

BTC/USD, 4-Hour Chart Analysis

With still no signs of even a short-term bottom in altcoins, Bitcoin is still the only hope for crypto bulls, as the coin continues to clearly hold above the crucial $5850 level. BTC is also trading above the weekend lows, even though it failed at the $6500 level during the bounce and it is now back below the $6275 support.

While the short-term downtrend is still intact and the sell signal is in place, today’s strength could be a start of a trend change, should the coin maintain its resilience. Further resistance is still ahead at $6750 and $7000, while initial support is at $6000, with the next major support zone below $5850 found between $5000 and $5100.

Sellers Still in Control but First Signs of Exhaustion Appear

LTC/USD, 4-Hour Chart Analysis

Although the bearish trend in altcoins is still very strong, and most of the relatively weak majors are also confirming today’s break-down, Litecoin is slightly outperforming the likes of Dash, NEO, and IOTA. While the current relative stability is still no reason to buy the coin, and the short-term sell signal remains intact, further signs of strength would be positive for the whole segment.

XRP/USDT, 4-Hour Chart Analysis

Ripple’s technical situation is still dire, as the coin failed to hold up above $0.30, with no signs of a bottom despite the strong support in the $0.30-$0.32 zone, and the deeply oversold momentum readings. Also today, XRP plunged below its previous low, and it’s now trading just above $0.28. The next major support zone is found near $0.26, and for the sell signals on both time-frames are intact.

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 316 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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Bitcoin

Turkish Lira’s Volatility Rivals that of the Bitcoin Price: Report

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If you think the bitcoin price has taken you on a wild ride of late, it could be worse. The Turkish lira remains in freefall, rocking not only the local economy but spilling over into vulnerable emerging markets as well. In fact, the short-term volatility in the lira versus the U.S. dollar has surpassed that of leading cryptocurrency bitcoin, a report in Bloomberg pointed out.

Source: Bloomberg

Indeed, based on 10-day performance in the lira versus the U.S. dollar, volatility has exceeded that of bitcoin, Bloomberg reported. A Turkish constitutional referendum last year inspired similarly wild swings. Meanwhile, the lira and bitcoin are neck-and-neck for year-to-date declines at 45% and 55%, respectively.

Beating out bitcoin on volatility is not a coveted title, especially when you consider bitcoin’s ride since it’s December 2017 peak, since which time it’s shed more than half of its value. This summer alone, the bitcoin price has gone from approximately $5,800 in June to more than $8,000 in July only to fall back below the $7,000 shortly thereafter to almost $6,700 today. It has fallen through support levels like a hot knife through butter, but the plight of the Turkish lira is arguably worse. Turkey is facing a crisis of confidence in its currency, which is making other forms of payment, most notably bitcoin, more attractive.

Cryptocurrency a Refuge

So what’s a Turkish investor to do? Increasingly they are seeking refuge in cryptocurrencies, where the environment remains relatively friendly compared to other jurisdictions for crypto trading, say India. Bitcoin trading volumes that are up by double-digit percentages across local exchanges Koinim, BTCTurk and Paribu, as reported by Forbes. BTC trading volume on Turkey’s largest crypto exchange Koinim is up more than 60%. Over on BTCTurk, volumes are up by more than one-third and on Paribu it’s reportedly up 100%.

Meanwhile, the trade tensions between the Trump administration and Turkey surrounding steel and aluminum sanctions and tariffs only seems to be escalating, which could push investors and consumers alike further into crypto.

Taken the South American country of Venezuela, for instance. Dash Core has been thrust into the spotlight there as the poverty-fueled Venezuelan economy has been reeling from hyperinflation, as evidenced by hundreds of merchants now accepting the No. 14 cryptocurrency by market cap as a payment method. The same could happen in Turkey, though it’s unclear which cryptocurrency would be the top choice. Dash put boots on the ground in Venezuela to make integration and adoption more seamless and their efforts appear to be working.

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 35 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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