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Check Your Shadow

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Happy Groundhog Jobs Day!!

February 2nd is marked on many calendars as a uniquely superstitious holiday in which a rodent named Phil who lives in Pennsylvania will decide if we’re ready for Spring or if we get six more weeks of winter.

This tradition comes at an auspicious time for the financial markets. The irregularities in the bonds market have spread and are now worrying stock investors.

The jobs data coming from the US today could provide an omen for Wall Street. Will they step out of their hole with confidence or will they cower at the sight of their own shadow?

For those of you hodling cryptos as the main part of your portfolio, you could probably skip to the end, but you probably shouldn’t.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Bond’s Continue to Fall
  • NFP Jobs Day!!
  • Red Crypto Night

Please note: All data, figures & graphs are valid as of February 2nd. All trading carries risk. Only risk capital you can afford to lose.

The Backdrop

At the moment, the US government has an outstanding debt level of approximately $20.6 trillion. Who do they owe all this money to??

Well, everyone. Governments borrow money in the form of bonds, which are paid back gradually over time. At the moment if you want to lend money to the United States for the next 10 years, they will pay you back an annual “yield” of 2.79%.

The reason this yield is so important is that US government debt is seen as a benchmark for most types of lending on the planet.

Even though this is the highest yield we’ve seen since early 2014, it’s really not that much historically. This graph from CNBC shows us the 10-year yield since 1954.

Of course, nobody is really worried about a yield of 2.8%. The problem here is the rate at which it’s rising and if the world is ready to see rates that are much higher.

Janet Yellen’s final words to us from the pulpit of the US Federal Reserve can be seen as a warning about inflation. If indeed it does come quickly, lending rates will go up. That’s when we’ll truly see how well this quantitative easing experiment really worked.

Jobs Numbers Today

At 1:30 PM GMT the United States will publish its monthly jobs report. As many of you know, this is usually the most highly watched statistic by the financial markets and has been known to cause huge moves in everything from the USD, to stocks, and commodities.

Analysts are expecting a strong number of more than 180,000 jobs added in January. If the number comes out on target or within 50,000 more or less, the reaction may be quite muted.

A pleasant surprise here could add some much-needed confidence to the stock market, which has been showing some serious signs of nervousness lately.


In addition, we’ll be watching the average hourly earnings. If salaries in the US start to increase quicker than expected it could spur on inflation.

Bitcoin Support

Selling continued overnight from the number one cryptotrading nation.

The good news is that volumes have spiked in Japan…

The not so good news is that much of this volume seems to be mostly on the short side.


The other good news is that the Sushi Premium has come down drastically and even reversed. The price per bitcoin in Japan is now cheaper than it is anywhere else in the world.

The action from South Korea on the other hand remains somewhat muted and the premiums are still slightly above the rest of the market.

As far as the technical analysis, we are now at the decision point that we’ve been speaking about for the last few weeks.

Here’s the chart we’ve been looking at with the three relevant levels…

As you can see, we’re now just below the breakout level (purple line) and resting on the 200 day moving average (yellow). The big test will be at the long term trend line (blue).

Of course, everyone draws their trend lines slightly differently. For the purpose of this analysis, I’ve tried to draw it as conservatively as possible. A small break below wouldn’t be much of an issue but if we do go much below this line we could very well be heading for 6 more weeks of hodling winter.

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. 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.

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 122 rated postsSenior Market Analyst at Etoro.com.




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3 Comments

3 Comments

  1. gran

    February 2, 2018 at 1:16 pm

    I paid you the membership and it’s something I regretted a long time ago, but lately your analyzes are very bad, I do not know what you’re basing yourself on or if you’re doing your work with your eyes closed or if it’s a kind of manipulation that you are doing to obtain benefits from your own subscribers or do not know what is happening, but you are missing more than a newbie, take a vacation and clear your mind.

    Te pague la membresia y es algo de lo cual me arrepenti hace mucho mucho tiempo, mas ultimamente tus analisis estan bien malos, no se en que te estas basando o si estas haciendo tu trabajo con los ojos cerrados o si es una especie de manipulacion que estas realizando para obtener beneficios de tus propios suscriptores o no se bien que es lo que esta pasando, pero estas errando mas que un novato, tomate unas vacaciones y despeja tu mente.

    • embersburnbrightly

      February 2, 2018 at 4:27 pm

      Could you please be more specific on what he is missing, in your opinion? Mati has been right on the money for the vast majority of the time so, as per my experience over the past six months or so.

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Altcoins

Crypto Market Cap Falls Below $200 for the First Time Since November Amid ICO Backlash

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Cryptocurrencies extended their selloff overnight Tuesday, as the total market capitalization pierced below $200 billion for the first time since November. The decline was far-reaching and severe, with 78 of the top 80 altcoins recording double-digit percentage losses.

Crypto Market Update

Roughly $26 billion was wiped from the cryptocurrency market overnight, a sign that the bears were firmly in control and not giving up their position anytime soon. The market bottomed at $189.6 billion late Monday and has since recovered to around $193 billion. Twenty-four hours ago, coins were collectively worth more than $217 billion.

Below are two snapshots of the crypto top-50, as reported by CoinMarketCap.

Although the declines were largely concentrated in altcoins, bitcoin also experienced a tumultuous overnight session, with prices coming within $100 of a new yearly low. The bitcoin price bottomed at $5,858.60 on Bitfinex but has since recovered above $6,100.

Ethereum’s downward spiral intensified Tuesday, with prices crashing to fresh 14-month lows. At press time, ether was down 16.6% at $267. The second-largest cryptocurrency by market cap has shed more than 35% over the past seven days.

The Market’s Next Move

The rout in altcoins has left bitcoin with a 54.1% share of the total cryptocurrency market – the highest since December. Although this gives bitcoin a stronger gravitational pull on other digital assets, it’s also an indicator that investors are shifting their portfolios away from more speculative altcoins and tokens.

As Bloomberg pointed out on Monday, Ethereum’s massive decline could be a sign that ICOs are cashing out. If this is true, ether could face a deeper short-term correction as token offerings fizzle out.

Biswa Das, the head of quantitative hedge fund BloomWater Capital, said the following of ICOs:

“These startups are raising a lot of funds but they don’t have treasury management or enough cash management experience, so they’re selling too early and causing a lot of pressure in the market. It was fine last year but right now the market is so fragile that it causes a lot of pressure.”

The cryptocurrency market has lost a staggering $140 billion since June 1, and a look at bitcoin’s technical chart suggests more pain could be on the way. The bitcoin price faces a critical support test at $5,800; a break below that level could expose the digital currency, and the broader market, to new yearly lows as early as this week.

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 544 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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Bitcoin

Bitcoin Price Stabilizes Above $6,000 as Altcoins Get Rearranged

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Bitcoin has emerged as the victor from the bloody chaos of the past week, but perhaps only by default. The 5% losses incurred by BTC in the past seven days would be considered a poor week at the markets in a different climate; but within the current context BTC looks positively bullish in comparison to its nearest competitors.

Bitcoin Stabilizes Above $6,000

Bitcoin’s fall over the last 24 hours didn’t come quite so fast or as hard as that of the altcoins, although it did eventually drop below $6,000 at one point during the night. At around 03:00 UTC the BTC coin price sunk to the $5,970 range, but by the time people were waking up for breakfast the $5,000’s had been rejected and BTC was back up above $6,000.

With just under 18% of BTC trades coming against USDT Tether, it seems the price dip was more a case of cautious hands taking refuge in USDT for the night while the storm cleared. After a 40% drop off in volume overnight, BTC is now starting to gear up for more, as the daily volume has grown from $4.1 billion to $5.3 billion in the last six hours.

A quick glance at the market cap beyond Bitcoin is enough to justify the most dramatic of language, and once again one of the worst periods in recent times has fallen on ‘Monday Bloody Monday’.

Altcoin Top-Ten Rearranged

Everything looks different in the top ten this morning, with several pieces of altcoin furniture having been rearranged during the night’s turmoil. All of a sudden Stellar (XLM) finds itself in 5th spot, while EOS has been kicked down to 6th spot for the first time since its ICO ramped up to completion in early 2018. EOS has incurred 17.8% losses in the last 24 hours, descending to a coin price of $4.27 at the lowest point of the night.

Further down the pack, USDT Tether has jumped into 8th spot and is battling it out with Cardano (ADA), which plunged 24% today before stabilizing at net losses of 19%. ADA coins dipped to levels not seen since early November 2017 when they reached a value of $0.086 this morning, although they’ve since rebounded to the $0.09 range at the time of writing.

Further down still and IOTA was temporarily kicked down to 12th spot, behind TRON, as it recorded 24% losses for the day alone. TRON isn’t much better off, with losses similarly approaching the 24% mark.

While Ethereum won’t be displaced any time soon, it has been shaken as bad as any coin in the top ten today, with 20% losses coming as ETH falls to a coin price not seen since September 2017 at $256.58. Despite a rebound to $264 at the time of writing, Ethereum is still down nearly 40% over the last seven days.

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 38 rated postsGreg Thomson is a full-time crypto writer and digital nomad. He eats ICOs for breakfast and bleeds altcoins. Wherever he lays his public key is his home.




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Analysis

Crypto Update: Altcoin Crash Continues, Ethereum Hits $250 as Bitcoin Holds Up

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The cryptocurrency segment endured another ugly overnight session, with the major altcoins plunging by double digits across the board yet again. The total value of the market is now handily below the $200 billion mark after the latest selloff, and despite the deeply oversold momentum readings, there is still no sign of even a short-term bottom, and our trend model continues to flash red too.

While Liteocin and Monero provided a glimmer of hope for bulls during the initial phases of the current leg lower, the coins that are among the laggards from a long-term perspective followed the broader market below support later on. With no bullish leadership forming, the strong downtrend is still dominant and traders should still remain defensive, despite the already heavy losses in the segment.

That said, in time, a more durable bottom is likely close, thanks to the negative sentiment and the oversold environment, but percentage-wise, further steep losses could be ahead.

ETH/USD, 4-Hour Chart Analysis

Ethereum is still in the epicenter of the decline, with a more than 15% daily decline, as the coin quickly got below the $275 level just after violating the $300 support, and even touched 4250 in early trading. The second largest coin fell through key zones without even a blink, and that points to forced liquidations in the market.

The coin is still on sell signals on both time-frames and traders still shouldn’t enter new positions. Support is now found at $260 and $230, while resistance is ahead between $275 and $280, and near $300.

BTC/USD, 4-Hour Chart Analysis

While sellers have been trying to push Bitcoin below the $6000 level amid the altcoin rout, the coin always managed to bounce back so far, and it continues to hold up clearly above the structurally important $5850 level.

The coin is still in a bullish secular trend and while the long-term picture is overwhelmingly bearish in the segment, the strength of the largest coin might be the basis of a coming recovery.  That said, the short-term downtrend is clearly negative in the BTC, and traders shouldn’t enter new positions. Resistance is still ahead at $6275, $6500, $6750, and $7000, while initial support is at $6000, while further support is found between $5000 and $5100.

Relentless Selling in Altcoins

XRP/USDT, 4-Hour Chart Analysis

Ripple still resembles a falling knife, similarly to most of the majors, and the coin continues to slide lower, as last week’s break-down led to a series of support breaches. The coin is now down by 40% in a bit more than a week, and it is currently testing the strong support zone near $0.26 after spiking briefly below it overnight. Should XRP hold above the spike low, traders could be looking for signs of a bottom, but for the coin is still on a clear sell signal.

XMR/USDT, 4-Hour Chart Analysis

With the smaller coins also being hammered lower, there is no real hiding place beside BTC in the segment, and yesterday’s slightly strong coins also broke down overnight. Monero violated the key long-term support near $80, which served as a base for the late-2017 run-up, and the coin is trying to hold its ground above that after the spike lower. While the downtrend is clearly intact, and the short- and long-term sell signals are in place, a recovery above $90, could point to the exhaustion of sellers.

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 317 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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