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Cryptocurrencies

Coronation Day

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The alternative investment community has crowned bitcoin as the king.

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August was a good time for the entire crypto market and everything surged. September was red and we saw plenty of pullbacks, which is as can be expected given the previous rise.

October is still in question. An answer may have come from the market action yesterday afternoon where we saw bitcoin rising sharply while the rest of the cryptocurrencies fell.

Of course, the weakening US Dollar may have had something to do with this as well as we’ll see in the charts below.

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@MatiGreenspan
eToro, Senior Market Analyst

 

Please note: All data, figures & graphs are valid as of October 10th. All trading carries risk. Only risk capital you can afford to lose.

Market overview

Now just one and a half weeks from the general elections in Japan and the current Prime Minister Shinzo Abe has already been handed a major victory.

The biggest threat was coming from an extremely popular new player. The first female mayor of Tokyo Yuriko Koike. Koike’s Party of Hope has seen some excellent gains in the polls these past few weeks. However, she has gracefully decided not to go after the full sushi platter and so will not be running personally fro Prime Minister.

This move could very well hand the crown back to Abe by default as his main opposition seems to be in tatters at the moment. Of course, it’s still too early to call but the way things look at the moment, September 22nd could simply be a coronation day rather than a battle.

Abe is one of the world’s leading figureheads in loose money policy so this generally means more support from the BoJ for the financial markets.

The Nikkei 225 is celebrating the welcome sign of a stable government and the prospect of continued stimulus. It is now close to it’s highest level since 1996.

Gold & Oil

Also, take a look at gold and oil today. Gold has been one of the best performing assets (besides crypto) so far this year. After peaking in early September at $1357 an ounce we’ve seen a pullback of $97 (blue rectangle).

Donald Trump has introduced a new policy for the US Dollar, which is contrary to just about every US president and economist before him. Rather than advocating for a strong Dollar, Trump has chosen to join the global currency wars to try and make America more competitive by weakening the Buck.

Whether this policy will be effective remains to be seen but the effect on the Dollar is clear and it has been sinking like a stone since inauguration day on January 20th.

A natural way to hedge Dollar weakness is by adding Gold to your portfolio. Many hedge fund managers recommend a conservative amount of 5% to an aggressive 15% of your overall assets.

After the major pullback, and now with three solid green days, we could be looking for some fine entries.

Oil on the other hand is less appreciative of the Dollar depreciation. The oversupply has been apparent since 2014 and according to OPEC’s Secretary General is now rebalancing itself. Of course, it’s really his job to say that since OPEC’s entire purpose for existing is to keep the price of Oil elevated.

One of the world’s biggest oil producers, Saudi Aramco, has just announced that they will be making the deepest cuts to production in history and will reduce total output by 560,000 barrels per day.

The news of this did send the price up slightly we’re now looking at a support level of $49. At the moment the big question will be if OPEC and the East can get the price above $50 and hold it there before producers from the West turn open their spigots and flood the markets once again.

Another simple way to invest in energy and metal is through eToro’s unique low risk and well diversified CopyFund @GoldenEnergy.

The Crypto Crown

When two things are moving in space it is extremely difficult to prove which is moving in relation to the other. That’s one of the main reasons that people who argue that the sun revolves around the earth are so annoying.

So, we ask the question. Is bitcoin rising against the Dollar, or is it the other way around?

Either way, this chart from Bloomberg shows the correlation between the two. With Bitcoin in blue rising on every major drop in the US Dollar Index (yellow).

Yesterday, we had some unique price action within the cryptomarket as we saw a rare flight to safety. The clear winner was BTC which rose about 7%, while all the altcoins dropped by roughly the same amount.

Bitcoin’s dominance can be further depicted in this chart from coinmarketcap.com…

As we can see, Ripple had a go at Ethereum back in May that lasted a few days. Ethereum then took a shot at the title in June and nearly surpassed Bitcoin. Since then the trend has been clear. Yesterdays moves have put the original blockchain and the dominance level is now above 52% of the total market share.

Many thanks to everyone who is reading these daily market updates and sending me your awesome feedback, helpful comments, and relevant links. I honestly couldn’t write them without you.

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.

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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Cryptocurrencies

Crypto Market Reaches Historic Milestone as Ether, Ripple Surge

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The cryptocurrency market reached a historic milestone Wednesday, as the combined sum of all coins in circulation peaked above half a trillion dollars for the first time. The gains were mainly driven by Ethereum and Ripple XRP, a pair of high-profile altcoins that have been on investors’ radar for some time.

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Global Crypto Market Cap

The combined value of cryptocurrencies in circulation broke above $500 billion on Wednesday for the first time ever. According to CoinMarketCap, the overall market peaked around $512 billion at around 15:17 UTC.

At last check, the total market capitalization was around $498.5 billion. That represents a gain of 29% over the past seven days and 144% over the past month.

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As the following chart illustrates, bitcoin’s dominance has declined sharply since February as altcoins proliferated. At the start of the year, bitcoin represented nearly 95% of the global cryptocurrency market in terms of value. That figure fell to a low of 39% in June, and has since moderated around 60%.

Ethereum has seen its percentage rise the most relative to bitcoin. At its highest, ether accounted for nearly one-third of the market value, according to CoinMarketCap data.

Ether, Ripple Step Up

Earlier in the day, Hacked reported that ether prices surged past $700 for the first time in a renewed show of strength. The gains were largely driven by positive headlines out of Switzerland after UBS, Barclays and others announced they would be leveraging Ethereum’s smart contracts to meet new stringent regulatory requirements.

At press time, ether was trading right around $700. That translates into a total market cap of $67.2 billion.

Ripple XRP also climbed to new highs Wednesday as prices peaked a hair shy of 50 cents U.S. Ripple was last seen trading at 0.4841, having more than doubled in the span of a week. In fact, Ripple’s gains have been so dramatic that it overtook Litecoin in overall market cap. Ripple’s market is currently valued at $19.1 billion, placing it fourth among active crpyptos.

The recent gains in the altcoin universe highlight the importance traders are placing on the news headlines. It also sends another clear signal that the cryptocurrency market is about much more than just bitcoin. In the case of Ethereum and Ripple, each system provides its own unique advantages that go beyond just transactions.

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 money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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Analysis

Technical Analysis: Volatility on the Rise Again, as Ripple and Ethereum Hit Targets

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Ripple has been the star of today’s session in the cryptocurrency segment, as the only major coin on a long-term buy signal in our trend model continued yesterday’s break-out, and surged to a new all-time high. The currency cleared the $0.425 level that marked the top in May, and after the more than 6-month long consolidation phase, it promptly neared the $0.50 level.

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While the short-term momentum indicators are now stretched, the coin is still in an encouraging long-term setup, although the best period to buy already passed. The coin could be dragged lower in the case of the expected broad correction in the segment, but we expect XRP to outperform in the coming period, with support levels found at the prior high and below that in the range between $0.30-$0.32.

XRP/USDT, 4-Hour Chart Analysis

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Ethereum has been the other top coin on the rise, as the second largest digital currency surged past the final range projection target of the break-out two weeks ago at $685 in the aftermath of the launch of the BTC futures on Monday. The ETH token is now also on a sell signal on all time-frames, and we advise investors and investors to wait for the next major correction to establish new positions. Support levels are now found at $575, $500, $480, and $400.

ETH/USD, 4-Hour Chart Analysis

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Cryptocurrencies

Trade Recommendation: Syscoin

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The price bounced from the support zone formed by the uptrend line and SMA50. MACD and DMI support upward movement. If the price breaks the resistance level and the previous swing high, we’ll get a signal confirming that the market is going to move higher. Pending orders for buy can be placed at 0.00002550 level with stop orders at 0.00002150 level. Profit targets are 0.00003000 and 0.00003800 resistance levels. If you don’t use leverage, trading volume for this trade is up to 5% from your deposit.

Market: SYSBTC
Buy: 0.00002550
Stop: 0.00002150
Profit Targets: 0.00003000 and 0.00003800

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The trading signal is based on Poloniex chart.
Disclaimer: The analyst does not have investments in Syscoin.

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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