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Market Overview

Bitcoin’s Future

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Have you ever thought about a futures market for bitcoin. It seems the CME Group has.

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The idea is the same as the futures for any commodity really. Just as a gold miner or a farmer has a relatively fixed cost but unknown yield, bitcoin miners have the same type of deal. They know how much they’re about to spend, but have less of a clue as to how many coins they will produce or how much those coins will be worth in the future.

If the patent passes regulation, this new Bitcoin Future will allow miners to lock in current prices before starting on their venture. Pretty neat huh?

Thanks to @Jaynemesis for posting this on eToro.

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Meanwhile, the overall market cap of all cryptocurrencies has maintained above $29 Billion for the past few days despite some trouble in the industry that we’ll describe below.

Today’s Highlights

Stocks continue declines

Bitcoin breakout may be imminent

Carney & Mnuchin Tonight

Please note: All data, figures & graphs are valid as of April 20th. All trading carries risk. Only risk capital you’re prepared to lose.

Market Overview

Markets are still trying to process the shock delivered by Theresa May on Tuesday. This week was supposed to be all about France but now we’ve had another huge event thrown into the mix. After gaining overwhelming parliamentary approval yesterday, the UK will be going to the polls on June 8th.

Let’s be clear, this is not designed to be an election, more of a power grab ahead of the negotiations with Europe. However, as we outlined yesterday, it’s a national election and anything can happen. And, as we’ve seen twice recently, just because polls indicate one thing doesn’t mean that that will be the outcome.

The French elections are still very relevant and are taking place this Sunday. If you haven’t seen it yet, please review the video that we made outlining the potential moves in the market.

Watch the Video ->

The odds of a La Pen Vs Melenchon run-off are increasing. With Melenchon now trailing the front-runner by just 5%.

The United States indices put on a poor performance after lukewarm earnings reports and a sudden drop in the price of oil.

The USDollar is also taking a bit of a beating so far this morning, though I couldn’t say why exactly.

Perhaps this has nothing to do with it…

Opening the Spread

Two of the largest cryptocurrency exchanges have recently run into a bit of trouble. It seems that due to regulatory issues, Bitfinex and Poloniex are no longer able to accept transfers in Fiat currencies and have been restricted to only making deposits and withdrawals in cryptocurrencies.

At the moment, it seems that clients of these exchanges are getting more than a bit scared. Anybody who does have US Dollars sitting in those exchanges is currently exchanging it for digital and getting their money out.

The spread has widened significantly too. On most exchanges bitcoin is trading at around $1215 a coin but on the Bitfinex and Poloniex, the price is more like $1260 per coin as they try to discourage people from cashing out, or at least make a bit of money before they completely crash and burn.

If we look at the chart of bitcoin it does appear that a breakout may be imminent. After receiving strong support at $950 a coin (orange line), the price has managed to maintain a steady incline.

There was a tame retracement over the past week, but support came much sooner than expected at $1150 (blue line). At the moment there’s a free pass with no real resistance until the all-time high of $1294 (yellow). If the price forges new territory past $1300, the sky is the limit.

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 Comments

4 Comments

  1. Ershad

    April 20, 2017 at 3:29 pm

    Hi Mari,

    Would you say that it’s safe to be using poloneix or should I try finding another exchange? Can you recommend one that allows deposit and withdrawals in USD and also allows the buy and sale of major cryptocurrencies ?

    Thanks
    Ershad

    • Mati Greenspan

      April 20, 2017 at 4:16 pm

      Hi Ershad,

      Thanks for asking. I’ve pulled my funds from bitfinex already.

      For BTC and ETH, you’re welcome to open an account with eToro. We have thousands of other markets as well. Keep in mind that crypto’s are traded as CFDs so once your account is verified all deposits and withdrawals will need to be done with Fiat currency.

      Best of luck!

  2. JonasMertens

    April 24, 2017 at 1:22 am

    You say the sky is the limit if BTC reaches new ATH but the higher the price goes, the less likely miners will be to evolve the protocol and the less useful BTC becomes as a payment mechanism. I can see how BTC could still serve as digital gold if we keep it untouched, but I am afraid funds will instead flow into another alt that has higher capacity and tank BTC.
    This might drive miners to adopt either BTU/Segwit/something else, but it might be too late by that time.

    Is the sky the limit for BTC without capacity upgrade?

  3. Mati Greenspan

    April 24, 2017 at 5:07 pm

    Hi Jonas,

    That’s indeed an excellent point.

    The fact that segwit is on track to go into effect on Litecoin is encouraging. If it is done successfully on LTC, BTC is more likely to adopt it as well.

    If you think about the miners, their incentive is to keep the network useful, otherwise nobody will use it and as you said, will jump ship. So certainly they’ll be looking for a long-term solution, even if they are profiting in the short-term. ūüėČ

    Thanks,
    Mati

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Market Overview

European Stocks End Lower in Quiet Monday Trading

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European equity markets edged lower on Monday  after the region posted its best week in over a year. Overall trading conditions were quiet at the start of the week, with China and the New York Stock Exchange closed for holidays.

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Markets Down Across the Board

All of Europe’s major indexes finished lower. The pan-European Stoxx 600 Index fell 0.2% to close at 379.70. In individual markets, Germany’s DAX, France’s CAC and the U.K.’s FTSE 100 each fell 0.2%.

European markets roared back last week after one of their worst selloffs in recent memory. The regional Stoxx 600 index climbed 3.3% for its best week since December 2016. The gains were partly driven by a relief rally on Wall Street, with the S&P 500 Index posting its best week since 2013.

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U.S. stock futures were down across the board on Monday. At the time of writing, the Dow Jones mini contract was down 87 points. The March S&P 500 futures contract was also down 4.25 points.

Japanese Equities Gain

Japan’s main stock index traded firmly higher on Monday as the yen gave back some of its recent gains versus the dollar. The Nikkei 225 Index climbed 2% to 22,149.21. Despite the gain, Japan’s benchmark index is down 7% on the month.

The Topix index added 2.2% to close at 1,775.15 on Monday.

Markets in Hong Kong will reopen on Tuesday. Traders in mainland China return to their desks on Thursday.

Data, Monetary Policy the Focus of the Week

Traders in search for catalysts could find them in the form of economic data and monetary policy later this week. In terms of economic data, action picks up on Wednesday with a deluge of PMI reports covering the Eurozone and U.S. markets. U.K. earnings and employment data will also make headlines. U.K. and Eurozone GDP numbers are also scheduled for release in the latter half of the week.

On the monetary policy front, the Federal Reserve will release the minutes of last month’s FOMC meeting, which could shed light on the future path of interest rates. The U.S. central bank is widely expected to hike rates at its forthcoming meeting in March. At the time of writing, traders were pricing in an 83.1% likelihood of a rate hike at the Mar. 20-21 meeting, according to the CME Group’s Fed Fund futures prices.

Multiple Fed officials will deliver speeches in the latter half of the week, including FOMC member Loretta Mester and Neel Kashkari. Fed Governor Randal Quarles and William Dudley of the Federal Reserve Bank of New York are also scheduled to make the rounds.

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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4.5 stars on average, based on 152 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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Market Overview

Morning in Europe, Noon in Japan

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Hi Everybody,

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In the war between the big banks and the crypto-community, some foul play has recently surfaced.

There have been reports that Poland’s Central Bank has admitted to paying several YouTubers to talk trash about bitcoin and other cryptocurrencies.

It’s one thing to spread FUD or talk it down if it’s bothering you, I can respect that. But to start a smear campaign using social influencers and not disclose the payments, that’s just low down and dirty.

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This comes as the government of Poland has come under fire for allegedly staging a coup against their own judges and more recently has passed a law that seemingly flies in the face of free speech.

Increasingly, citizens across Europe are standing up to their Bankers and Politicians, which is great to see. After all, the umbrella of Europe will protect your rights but only if you stand up for them first. Should you remain silent, nobody will care enough to interject.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Holidays on Both Sides
  • Where the trades are at
  • New ICO Regs in Europe

Please note: All data, figures & graphs are valid as of February 19th. All trading carries risk. Only risk capital you’re prepared to lose.

Traditional Markets

We expect reduced volatility in the stock markets today. China and the East will be out for New Years for most of the week, and the US markets will be closed today in honor of President’s Day.

Without any direction from the East or the West, European Markets are not likely to make any major progress. However, the lack of liquidity can sometimes create sudden movements if a large player happens to step in.

Even Mark Carney’s speech this evening may be met with little enthusiasm in the markets.

Here is the VXX index, which is the best way to trade volatility at eToro. I would beware of any short position though, as we are near all time lows already.

Where the Vol is at

Traders seeking volatility should probably look elsewhere today. A rather sweet bounce in the crypto market has doubled prices for some of the biggest coins over the last two weeks.

This recovery is being led and carried primarily by Japan. Traders in the land of the rising sun are no fools. They allowed the prices to drop when it got to the top and now they’re buying up the bottom.

Here we can see the data from Cryptocompare.com. Take a look at the drop off in JPY volumes (green) from mid-December, the lull through January and now back to market domination, with a reading as high as 77% at the peak just a few hours ago.

Hello Mrs. Watanabee. Great to have you back!!

More Good News

The crypto market is also celebrating some positive updates from Europe, of all places. The European banks have been notoriously harsh on Bitcoins and everything Blockchain.

Over the weekend the Swiss government has come out with some clear-cut groundbreaking regulations on how to handle ICOs.

Unsurprisingly, the Swiss have put all ICOs into three categories.

These are the same classifications that the online community has been speaking about for months and it’s great to see the Swiss as one of the world’s first Cryptonations.

Word is, Spain is eager to follow in their footsteps. Good morning Europe =)

Wishing you an amazing week ahead.

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

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.

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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Analysis

Daily Analysis: Dollar Rebounds as Stocks Struggle at Key Levels

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Friday Market Recap

Asset Current Value Daily Change
S&P 500 2731 -0.08 %
DAX 12,451 0.86%
WTI Crude Oil 61.64 0.31%
GOLD 1351.00 -0.32%
Bitcoin 10030 -0.52%
EUR/USD 1.2405 -0.78%

The main US stock indices entered a crucial zone during the overnight session that we have been monitoring throughout the last two weeks, as the line-in-the-sand zone for the correction. Despite that, the question regarding the fate of the move has been postponed for next week, as the S&P 500 and the Dow failed to clearly rally above the zone, while the Nasdaq showed relative weakness after leading the market higher during the bounce.

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S&P 500, 4-Hour Chart Analysis

We are still leaning on the side of the bears regarding the short-term outcome, as the technical damage of the Volatility-Armageddon seems bigger than what a straight-line recovery would suggest. That said, the fundamental news was great today (not counting the latest developments in the Russia-Gate), as the US housing market sent positive signals amid the rising yields, while the UOM Consumer Sentiment Index also beat expectations.

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On an interesting note, the rise in yields paused, despite the positive economic news, and in this perverse world that led to a strong rebound in the Dollar, right after the new multi-year highs in the EUR/USD pair during the overnight session.

EUR/USD, 4-Hour Chart Analysis

The Euros weakness helped equities of the old continent is finally showing some relative strength, and the same goes for Japan, as the oversold readings in the USD/JPY pair that we noted also led to a rebound, back above the 106 level. While the bounce slightly helped the negatively diverging benchmarks, the clear technical weakness remains another bearish sign for the coming weeks.

DAX, 4-Hour Chart Analysis

The Dollar’s bounce pushed the price of gold lower too after the encouraging rally, but the Shiny Metal remains just a tad below its rally high, which is commendable, given the improving risk-sentiment throughout the week, even as another short-term correction is possible here. Crude oil enjoyed another positive day, although it remains well below its recent highs, just as the commodity-related risk-on currencies, where we already noted the relative weakness yesterday. That also adds to the cautious outlook for equities even in the face of the 5/5 positive days this week.

Gold, 4-Hour Chart Analysis

Cryptocurrencies

The crypto market continued to show robustness amid the hectic trends in traditional assets, and today’s meager correction adds to the bullish signs that emerged last week and remained with investors throughout this week. While not everything is rosy, with still several coins in dominant downtrends, including Bitcoin and Ethereum, there is clear leadership behind the rally, and if the coming short-term pullbacks remain in-line with today’s move, bulls should have their hopes up

BTC/USD, 4-Hour Chart Analysis

What would change the bullish posture is a return to the ‚Äúeverything moves together with high volatility and bearish volume‚ÄĚ regime of the preceding steep sell-off, but, for now, that seems unlikely, and a quiet consolidation this weekend would be just what the doctor ordered for the segment.

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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4.7 stars on average, based on 99 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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