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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.

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.

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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4.6 stars on average, based on 143 rated postsSenior Market Analyst at Etoro.com.




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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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Analysis

3 Things You Need to Know About the Market Today: Trade Rally, Pound Pullback, Tesla Worries

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1, Trade Optimism Drives Rally in Stocks, Oil

Shanghai Composite, 4-Hour Chart Analysis

The US government is mulling to lift or ease some of the trade tariffs on Chinese goods, at least according to the reports that surfaced yesterday, and although the rumors were promptly denied by the Treasury, risk assets have been pushing higher ever since. Global stocks are trading at 1-month highs, with understandably, the major US indices and China leading the way higher. We expect further gestures by the two sides in the coming weeks, as the talks progress, but a final agreement could still be months away.

The most affected commodities, such as copper and oil are also up today, and but as we noted this weekend, the oversold rally in risk assets is stretched now. Also, even as the weaker global benchmarks, such as the Shanghai Composite have joined the party, the clear economic slowdown and the bearish technicals make the current environment hostile for bulls

2, Pound Retreats After Hitting 2-Month High Above 1.30

GBP/USD, 4-Hour Chart Analysis

Besides the Trade War saga, the likely delay of the Brexit deadline has been making waves all week long, and Pound bulls seem to like the idea of a possible ‚Äúsoft‚ÄĚ deal with the European Union. The currency hit its highest level against the Dollar since mid-November, topping the 1.30 level, while British stocks are also trading near their 2019 highs.

Prime Minister Theresa May pledged to include the opposition parties following Wednesday‚Äôs no-confidence vote, but for now, even starting the talks is challenging, even though the government labeled the first talks ‚Äúconstructive‚ÄĚ. In any case, with the chances of a no-deal Brexit being low right now, the Pound could enjoy further gains, especially as long as the global risk rally lasts.

3, Tesla Disappoints With Guidance, Cuts Workforce by 7%

Tesla (TSLA), 4-Hour Chart Analysis

While it held up very well during the recent tumroil in the stock market, Elon Musk‚Äôs crown jewel, Tesla (TSLA) has been down by as much as 8% today in pre-market trading after warning investors that the electric car maker will likely turn a smaller-than-expected profit in the coming quarter. Tesla is struggling to ramp up the production of the Model 3, while also facing difficulties to hit its cost goal with regards to its ‚Äúmass‚ÄĚ product.

With the traditional car makers slowly but surely closing in on the company, and given the looming cash flow issues, the coming quarters will crucial for the Musk. The company just avoided bankruptcy in its early days, and some bears think that the fierce competition and the production issues could lead to a crisis yet again. The company’s workforce skyrocketed in recent years, and today CEO Musk also announced that it will lay off 7%, approximately 3000 workers, to cut costs after the expansion. He stated that,

“We unfortunately have no choice but to reduce full-time employee headcount by approximately 7%, we grew by 30% last year, which is more than we can support, and retain only the most critical temps and contractors (‚Ķ)”

While today, earnings reports will be few and far between, Netflix (NFLX) will also be in focus after reporting yesterday in after-hours trading, and for now, the streaming giant is also trading lower despite the broad overnight rally in stocks.

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 443 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

Make it or Break it

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Hi Everyone,

In the United States at the moment, there are nearly 39 million people on food stamps. We already know that government workers are not getting paid during the shutdown but what now seems unclear is how the shutdown affects the poor.

For those of you who are not familiar with food stamps, this is the US government’s welfare program that provides food to poor people by giving them coupons that they can take to the store.

The thing is, the system is quite complex and varies for different states and different retailers. A few stores have already been forced to stop accepting food stamps due to the shutdown and some states have given their citizens an advanced payment.

For now, it seems that only a small number of people have actually been affected but with some analysts predicting that the shutdown could last for several more months, the future seems incredibly uncertain and information is hard to come by. So it’s worth keeping an eye on this development as it could potentially affect several areas of the US economy and the broader market.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Shutdown: Day 28 | Days to Brexit: 70
  • 10 Year Challenge
  • Russia’s Real Crypto Plans

Please note: All data, figures & graphs are valid as of January 18th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

The¬†markets were relieved yesterday by¬†the news¬†that…

This is a good indication that US-China trade talks are going well and seeing any sort of concessions from the White House, or even the indication that there may be concessions, is cause for celebration among investors.

The positive sentiment has carried through the Asian session and well into European trading.

Risk On

With the rise in stocks, we’re seeing some of the hallmarks that show investors are looking to take on more risk today.

Gold has managed to pull back from the $1,300 resistance level and oil is testing new highs, despite an IEA report that expects over-production to continue.

Perhaps the biggest indication of risk on sentiment today is coming from the USDJPY, which has now stepped over the 109 level as traders sell the Yen for the Greenback.

Next weekend is likely to start with a bang!

Just a few hours after markets open and before most western investors have opened their eyes, China will report some critical GDP growth data. As the China slowdown has become a prevalent theme in the markets recently this single data point can be a make it or break it moment.

Russia’s Real Crypto Plans

Last week, in one of our daily market updates (titled: Digital Reserves), we discussed a rumor that was circulating in the crypto community that the Central Bank of Russia may be planning to add bitcoin to its national reserves.

Well, it turns out Elina Sidorenko, the chairperson for the government committee for overseeing cryptocurrencies, has now clarified that while Russia might want to do this, it could be another 30 years before this becomes a reality.

As we correctly noted in the daily update at the time, the major setback here is that there is currently no legal framework for doing this. However, from what I understand, the idea of setting up a national CryptoRuble is being discussed among government officials and could very well happen within the next couple of years.

In¬†any case, we do know that the government of Russia is watching the crypto space quite closely. Dimitry Medvedev¬†was quoted¬†just yesterday as saying that the bear market doesn’t spell the end of crypto.

Spoken like a true crypto advocate!!

Have an amazing weekend.

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

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

eToro is a multi-asset platform which offers both investing in stocks and cryptocurrencies, as well as trading CFD assets.

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

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:MatiGreen

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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Market Overview

U.S. Stocks Surge as Trump Administration Weighs Ending Trade War With China

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U.S. stocks turned higher Thursday afternoon amid reports that Washington was considering lifting tariffs on Chinese goods to expedite a trade deal with Beijing. Cryptocurrencies headed for another mediocre session overall, though altcoins showed modest upside toward the end of the session.

Stocks Extend Recovery

All three of Wall Street’s major indexes finished in positive territory, extending their winning streak to three days. The Dow Jones Industrial Average gained 163.08 points, or 0.7%, to 24,370.24, its highest settlement since Dec. 13.

The broad S&P 500 Index climbed 0.8% to finish at 2,635.96. All 11 primary sectors finished with positive results, with materials and industrials leading the way higher.

A strong performance in technology shares lifted the Nasdaq Composite Index to gains of 0.7%, where it finished at 7,084.46.

The indexes have gained more than 11% since Christmas Eve, when they traded at more than one-year lows. The S&P 500 and Nasdaq briefly entered bear-market territory in one of the worst quarters since the financial crisis.

End of the Tariff War?

The United States is strongly considering easing tariffs on China in an effort to broker a new trade deal before the self-imposed Mar. 1 deadline. According to The Wall Street Journal, U.S. officials would like to give Beijing bigger incentive to make bigger concessions in the next round of negotiations.

Both sides held face-to-face meetings last week, with China agreeing to open up its domestic market to U.S. companies and purchase more American-made farm and energy commodities. Further talks are planned in the coming weeks.

The Mar. 1 deadline reflects the 90-day truce period agreed to by President Trump and China’s Xi Jinping in December. After meeting on the sidelines of the G20 summit in Buenos Aires, both leaders committed to ending the trade war and returning to the negotiating table.

Cryptos See Modest Upside

The cryptocurrency market saw the narrowest of gains Thursday thanks to a late rally by altcoins and tokens. Bitcoin cash rose 1.3% to $130.63, EOS added 3% to $2.51 and Tron gained 4% to $0.0258. Outside the top ten, IOTA, Binance Coin and Ethereum Classing gained between 2% and 5%.

Bitcoin, the largest cryptocurrency of all, rose 0.6% to $3,667.38. As we reported earlier, bitcoin continues to cling to $3,600 but a failure to extend gains beyond $3,750 could set the tone for another downward correction.

Cryptocurrencies as a whole reached a value of $122.4 billion, according to CoinMarketCap. That represents a gain of about $800 million from 24 hours earlier.

In roughly one month’s time, the crypto bear market will become the longest in history, according to CNBC’s Ran NeuNer. Thursday was day 391 of the bearish trend. The previous record, set in 2015, was 420 days. Relevant reading: Longest Bear Market in Crypto History?

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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4.7 stars on average, based on 740 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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