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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

How Bithumb Listing is Boosting Zcash Cryptocurrency on the Coin Market

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Zcash, previously referred to as ‘ZeroCoin’ or ‘Zerocash’, recently got listed on Bithumb as the ninth coin. The move has attracted attention to this private digital currency that came into existence in October, 2016.

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Prior to its listing on Bithumb, Zcash traded on a virtual asset exchange called Poloniex in the United States. Zcash value and technology were subjected to a thorough review before gaining entry to the South Korea market via Bithumb, the biggest exchange for digital currencies in the country.

Competing Closely

Though Zcash displayed signs of slow growth early this year, it recovered strongly in June with its price hitting the $435 mark, up from $26. There is no doubt that this digital coin is now competing closely with other bigger digital currencies in the cryptocurrency space. It is currently trading between $217 and $304.

Denitza Tyufekchieva, CEO at Propy says, “Such dramatic price changes of cryptocurrencies can be explained with speculation, especially after such announcement. However, what brings such increase in the long-term is usually the product advancement. In the case of Zcash, The Zcash team has made great strides on performance since their initial release. In the pending Sapling network upgrade, users will see significant performance improvements. This could mean a potential increase in the demand.”

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The stabilizing price of Zcash indicates its competitiveness. It  also shows that the coin does not differ too much with other high ranking cryptocurrencies like Ripple, Dash and Ethereum. Currently, there are 2.31 million Zcash coins in circulation.

Secure and Private

Drawing inspiration from the Bitcoin, Zcash boosts privacy through its cryptographic tool, zkSNARKS, an element that is not provided for in Bitcoin.

This outstanding security and technology underlying Zcash coin captivated the coin market. It has led to a surge in the coin’s market capitalization which is now at $648.5 million, up from $1.3 million at the time of listing on Bithumb.

On the coin market, Zcash improved in ranking now at  the 15th position, from position 30 in December 2016. The coin has been experiencing steady growth with its every day exchange volumes between $26 million and $43 million.

However, Angel Versetti of Ambrosus notes that, “Fluctuations like this make one jealous of cryptocurrency exchange owners, because no matter which way it goes as long as there is volatility and massive trading riding the wave, the house always wins.”

Traders find the coin’s untraceability compelling with its encryption serving to conceal user identity, protect privacy and conceal transaction amounts. Zchash’s protective anonymity has seen its value attract recognition in US’s Silicon Valley as well as globally in countries such as China, Argentina, Venezuela, Brazil and South Africa.

However, it is important to note that with Zcash, users are not be able to conduct audits on the blockchain. According to Kamil Przeorski, CEO and founder of Experty.io, this poses a risk for Zcash holders particularly if a bug hits the codebase.

Featured image courtesy of Shutterstock.

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Analysis

Technical Analysis: NEO Jumps as Broad Markets Turns Lower

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As the new waves of regulatory changes keep on hitting the segment, the major cryptocurrencies are mostly lower today. After the major update of Ethereum, and the recent surge in the price of Bitcoin, choppy conditions developed, with no clear short-term trend in most of the coins.

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NEO is the best performing major today, as it surged back to the $30 level after a frustrating period that was dominated by a downward drift.  The coin is now just below the key resistance level, and it could be ready to test the $34 level, with a further target found at $40. The long-term picture still looks positive, with strong support levels at $27 and $25.

NEO/USDT, Daily Chart Analysis

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Ethereum is in a consolidation after the encouraging rally towards the end of last week, while Bitcoin is also correction after its stellar rise. The two largest coins pulled the rest of the majors lower, while Ripple remained very volatile after touching the $0.30 level yesterday, trading below the $0.26 again.

Litecoin, Dash, Monero, and IOTA are all a bit lower today, while Ethereum Classic found some relative strength, although it remains stuck in a declining short-term trend. All in all, the segment is still in a clear uptrend, so let’s see which coins are the most promising regarding the short-term picture.

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Cryptocurrencies

Trade Recommendation: Syscoin

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The market bounced from the support level and broke SMA100. It gave us a trend reversal signal. MACD and DMI support upward movement. We can use the local swing high and a breakout signal for opening long trades. Entry level is 0.000037 with stop orders below the support at 0.000022 level. Profit targets are 0.000050 and 0.000060 levels. If you don’t use leverage, recommended trading volume for this trade is up to 5% from your deposit.

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Market: SYSBTC
Buy: 0.000037
Stop: 0.000022
Profit Targets: 0.000050 and 0.000060

The trading signal is based on Poloniex chart.

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