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BTC/USD Gaining Momentum as China’s Bitcoin Ban Seen Backfiring

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Bitcoin (BTC/USD) prices are grinding higher this week on renewed optimism that the blockchain will overcome China’s latest regulatory crackdown.

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Prices continued to trade comfortably north of $3,900 at the start of Tuesday trading. Prices shot up nearly 7% on Tuesday, according to Bitstamp. The BTC/USD was last seen trading at $3,909.00, where it was little changed from its previous close.

At present values, bitcoin is capitalized at roughly $65 billion, according to CoinMarketCap. That’s more than double the next leading blockchain currency Ethereum.

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S&P’s China Downgrade Highlights Limits of Bitcoin Ban

Last week, Standard & Poor’s downgraded China’s sovereign credit rating in an apparent rebuke of Beijing’s recent regulatory fight to curb systemic risks. S&P triggered the downgrade after concluding that Beijing’s “de-risking” efforts aren’t moving fast enough to cool credit growth.

S&P analysts continue to see corporate-sector credit at 9%, which is higher than the desired ratio. The U.S.-based credit rating agency says China’s deleveraging efforts are likely to be “much more gradual than we thought could have been the case early this year.”

The downgrade occurred mere weeks after Beijing began its regulatory assault on cryptocurrency. Although we’re not suggesting that the downgrade was because of those actions, banning bitcoin clearly hasn’t been enough to improve China’s image in the eyes of regulators.

The global crypto market has expanded rapidly over the past nine months, but is only a drop in the bucket from China’s perspective. The market for bitcoin and even ICOs simply isn’t big enough to be a real threat to the world’s No. 2 economy.

However, that may soon change. There may come a time when the cryptocurrency market is simply too valuable to pass up. This is likely to occur when cryptos have the potential to replace many of the yuan’s everyday functions. This may lead regulators to a different conclusion.

There’s already evidence of Chinese investors moving to market-friendly Japan, which recently recognized bitcoin as a legitimate form of payment. The Chinese shuffle will also lead mainland investors to South Korea, another regional player developing a favorable outlook on cryptos.

Still, the loss of China is an immediate blow to the bitcoin community. Prior to the nationwide ban on Chinese exchanges, the mainland market accounted for 10-13% of global bitcoin trades. Replacing those order books won’t be easy in the short term.

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 164 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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  1. Chris G

    September 26, 2017 at 7:10 am

    There is something about cryptocurrencies that douchebags like Jamie Dimon will never get because of the basic privilege of his perspective. I’d bet my entire graduate education on one principle of what motivates human beings in terms of value: human beings want to be effective in their life pursuits. Psychologically, this is the foundation of motivational value in the human organism and cryptocurrency affords this value. HODL!

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Analysis

Technical Analysis: Majors Stage Rally but Strong Levels Still Ahead

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The cryptocurrency segment has recovered from a broad correction today in early trading, with the most valuable coins all turning into green during the session, despite the bearish start to the overnight session. With bottom-to-top gains of up to 15%, the rally helped in easing the worries of bulls, especially in the case of the relatively weaker coins.

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Bitcoin and most of the largest altcoins remained stable during the selloff, and BTC recaptured the $10,000 level quickly after trading as low as $9600 overnight. The initial rally topped out near $10,400, and the coin is trading back near the $10,000 level, as the bullish momentum faded away somewhat.

BTC/USD, 4-Hour Chart Analysis

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That said, we expect the uptrend to continue even if the correction could still carry Bitcoin lower. Further strong support is found between $9000 and $9200, while targets are ahead at $11,300, $13,000, and $14,250.

ETH/USD, 4-Hour Chart Analysis

Ethereum showed strength during the bounce again after yesterday, together with the early leaders of the rally, and although the coin dipped below the $845 level in the second half of the session, the signs remain positive for bulls. Support levels are now found at $780, $740, $625 and $575, while resistance is ahead near $910 and $1000.

(more…)

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 113 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

Crypto Update: Encouraging Bounce before the Weekend

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The correction that started out in the major lagging altcoins and spread to the leaders of the market yesterday is weakening, with a nice rally today in early trading in most of the majors.  Although the segment is not out of the woods just yet, the bullish signs which have been present ever since the lows three weeks ago still persist.

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Bitcoin stayed clear of the key $9000-$9200 support zone, for now at least, which would be an ideal bottom for the correction, but as we noted long-term investors should accumulate the coin during the correction, as the short-term momentum is already back to neutral. The $10,000 level is still in the focus, while the next major resistance is found at $11,300 and the prior rally high near $11,750 is also ahead as an obstacle.

BTC/USD, 4-Hour Chart Analysis

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The early leaders of the rally, Litecoin and Ethereum Classic are once again showing strength and that could signal that the next leg higher already started. That said, with several coins still stuck in broader downtrends, investors should still expect a bumpy road, with the occasional volatile sell-off.

Litecoin got very close to the $180 support that we have been monitoring throughout the correction, but it quickly bounced above the $200 level again, as the broad bounce started after testing the previously dominant declining trendline. So far, the price action in the coin is consistent with a new uptrend and we still expect LTC to lead the market higher.

LTC/USD, 4-Hour Chart Analysis

Ethereum Showing Positive Signs Again

ETH/USD, 4-Hour Chart Analysis

After yesterday’s early signs of relative strength, the second largest coin is now clearly showing evidence of accumulation, as it quickly recovered above the $845 level following the selloff after the US close. The coin established a new support near $780, and as the MACD is close to providing a bullish cross, it might signal the bottom of the correction.

Despite the bullish price action across the board, even in the recently lagging XRP and IOTA, the correction could still continue, but we still advise traders and investors to look for entry points as we expect the recovery to continue, although traders should still use smaller positions in the relatively weaker coins.

Stay tuned for our detailed technical analysis later on today.

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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4.7 stars on average, based on 113 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: Correction Continues but Coins Remain Stable

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It’s been another mixed session for cryptocurrency investors as judging by only the price action, the segment suffered losses across the board, but comparing the current sell-off to the January plunge reveals that the majors are much more resilient this time around.

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The largest digital currencies are holding on to most of the gains of the recent weeks, and the price action near the crucial support zones is also encouraging. With all that said, the correction is not over yet, and further losses are still in the cards, but barring a substantial change in price action, the coins will likely continue the rally.

BTC/USD, 4-Hour Chart Analysis

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Bitcoin has been trading around the key $10,000 level all day long, and, so far, a clear break-down has been averted. The short-term momentum indicators are now in neutral territory regarding the most valuable coin, and that could mean that a bottom is close, and investors should already add to their holdings here. Further strong support is found between $9000 and $9200, while targets are ahead at $11,300, $13,000, and $14,250.

XMR/USDT, 4-Hour Chart Analysis

Correlation between the majors has increased during the sell-off, but there are still clear outperformers and laggards, adding to the bullish case. Monero remains among the strongest coins from a technical perspective, trading right at the lower boundary of the bullish consolidation pattern, with the $280 price level holding up for now. The coin faces strong resistance near $300 and $335, but we expect the uptrend to continue with the next target being ahead at $400, while further support is found at $240.

(more…)

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 113 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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