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Crazy Markets Day Ahead

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Ever since the great recession of 2008, the governments and central banks of the world have been pumping ludicrous amounts of money in the financial system in order to artificially inflate asset prices.

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In the short term, this is really good for large corporations and financial institutions. However, the long-term effects of these extraordinary and unprecedented policies are yet to be seen. Some economists have hypothesized that the fallout from all this excess money in the system could be even more devastating than the original financial crisis that it was intended to fix.

The US Federal Reserve has been making great efforts lately to get back to a normal policy. Next week, they should give us some indication about how they plan to get rid of more than $4 Trillion worth of bonds and other assets that they have bought over the last decade.

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The European Central Bank however, is still pumping about €60 Billion into their economy on a monthly basis. In today’s monetary policy meeting, Mario Draghi is largely expected to maintain the pace of this program even though the noticeable effects have been very minimal lately.

The fact that an unelected official has so much power over so many people is a bit sad. I sincerely hope that in the near future, we’ll be moving to a better form of money. One that is more efficient, more democratic, and more fair to everyone.

Mati Greenspan
eToro, Senior Market Analyst

Please note: All data, figures & graphs are valid as of June 8th. All trading carries risk. Only risk capital you’re prepared to lose.

Market Overview

Today is the day we’ve been speaking about for almost two months. When Theresa May first announced the snap elections on April 18th she had a very wide lead in the polls. Since then her lead has narrowed to about 5%.

The main issue on the table is Brexit and what type of relationship England and the EU will have in 5 years time. Multiple terrorist attacks and budget plans from both parties have tried to change the focus of these elections. However, at the end of the day, the main decisive factor will be voter turnout.

Price action in the UK’s Pound Sterling has been as complacent as her citizens of late and many are just tuning out.

In this graph, we can see the GBPUSD since the Brexit Referendum about a year ago. Draw your own conclusions.

At this point, it’s impossible to know what will happen next. Who will win, by how much, and how the market will react remains a large question mark. Exit polls should be available as early as 10:00 PM in London. Be ready for anything!!

eToro has organized a special webinar to discuss these elections with three of our popular investors, all from the UK and all with excellent trading stats. Of course, like all things in eToro lately, the topic of conversation was changed about half way through to cryptocurrencies.

The recording is available now on YouTube:

Trump Under Fire

Today fired FBI Director James Comey will take the stand and reveal the nature of some private conversations he’s had with Donald Trump. His opening statement has been released already. You can find it here.

The main quote that keeps coming up is…

“I need loyalty, I expect loyalty.”

Legal experts feel that from this statement Trump may have crossed a line but hasn’t done anything explicitly illegal. Therefore, we may actually see some relief from the whole fiasco. However, if the Q&A session today has any further revelations, the consequences and market reactions could be significant.

Crypto Mining is Big Business

Recently, both AMD and NVIDIA have announced that they will be making brand new graphics cards specifically designed for mining cryptocurrencies.

Both card makers have been selling out due to an influx of people looking to get in on the action. So there is certainly a high demand for this new product.

So, if you’re scared about the extreme volatility involved in trading directly on Bitcoin and Ethereum or even if you’re just looking for another way to balance out your portfolio. You can also check out the stocks of these two companies who are looking to capitalize on this new industry in quite a different way.

Thanks to Jasper Lee our Managing Director in China for bringing this to my attention. Shares in both of these companies are surging on the news

Have an amazing day ahead!!

This content is for information and educational purposes only and should not be considered investment advice or an investment recommendation.
Past performance is not an indication of future results. All trading carries risk. Only risk capital you’re 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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3 Comments

3 Comments

  1. embersburnbrightly

    June 8, 2017 at 2:08 pm

    “The fact that an unelected official has so much power over so many people is a bit sad. I sincerely hope that in the near future, we’ll be moving to a better form of money. One that is more efficient, more democratic, and more fair to everyone.”

    Well said, and I would make the same argument against even elected officials having as much power as they do over current forms of currency. Excessive burdens put on any populace for the gain of a few always leads to the populace becoming intensely motivated to figure out a solution to put some of that power back into their hands.

  2. Mati Greenspan

    June 8, 2017 at 2:35 pm

    Thanks Ember. Keep on burning!

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Bitcoin

Bitcoin Hits $100 Billion as Record Rally Continues

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Bitcoin’s epic rally intensified Friday, as the token reached $6,000 for the first time in its history, bringing the total market value above $100 billion.

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Bitcoin’s Fresh Intraday High

BTC/USD touched an intraday high of $6,064.14, bringing its total market cap to $100.8 billion. That’s roughly $85 billion higher than where the market started in January.

At press time, bitcoin was trading around $5,993, up more than 5% on the day. From a technical perspective, the digital currency is considered overbought. However, the technicals are typically less reliable during extreme price movements like we’ve seen in recent weeks. The world’s leading cryptocurrency has added a staggering 520% this year.

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Bitcoin’s rally didn’t really extend to other cryptocurrencies Friday. Ethereum continued to trade just north of $300, while Ripple (XRP) consolidated a hair below 21 U.S. cents.

The cryptocurrency market’s combined market cap is roughly $173.4 billion, which is roughly $3 billion less than the Monday’s peak.

$10,000 Bitcoin?

Bitcoin could be heading north of $10,000 a unit in the not-too-distant future, according to a survey conducted by CNBC. About 49% of the 23,118 people who voted in the CNBC poll said the digital currency will reach the five-figure threshold.

Roughly 16% of respondents said bitcoin prices are heading to between $6,000 and $8,000. About a third selected the Jamie Dimon option by calling bitcoin a fraud.

Though unscientific, the survey clearly shows that the mainstream is paying attention to the rapid acceleration of cryptocurrency. At least a portion of them will investigate the matter further, and likely conclude that digital assets are a welcome addition to their portfolio.

It’s impossible to associate bitcoin’s success with just one catalyst, but it’s clear that institutional support, the allure of the blockchain and favorable regulation in markets like Japan are feeding the rally. An anticipated November hard fork is also helping to shore up price.s

A Day of Milestones

Bullish sentiment also rubbed off on U.S. stocks Friday, with the Dow Jones Industrial Average extending its rally above 23,000. The blue-chip index climbed tacked on 165 points to close at 23,328.63 after the U.S. Senate passed the 2018 budget by the narrowest of margins.

The S&P 500 and Nasdaq Composite also set fresh all-time highs, with financials and industrials leading the rally.

Featured image courtesy of Shutterstock. 

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Analysis

Cryptocurrency Analysis: Bitcoin Tests $6000 as Market Settles Down

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Bitcoin is in the center of attention yet again, as the most valuable coin is knocking on the door of the $100 billion level in market capitalization. The coin touched our long-term target at $6000 on several exchanges, but it’s now trading slightly below the historic level.

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While the rest of the market is quiet, BTC is very active, and it could be in for a volatile weekend, as despite the long-term overbought readings, the short-term uptrend is clearly intact. That said, investors should avoid opening new positions here, and consider lowering their exposure further, while traders should only trade with smaller than usual sizes. Support levels are found at $5400, $5000, and near the $4650 level.

BTC/USD, 4-Hour Chart Analysis

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As the rest of the majors are still recovering from the recent correction, the total value of the segment is below its all-time high, with BTC’s dominance now standing at 57%. Most of the largest coins are little changed, with Monero and Liteocin showing considerable strength and IOTA still being the weakest of the majors. With all attention on BTC let’s see how the most traded altcoins look before the weekend.

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Cryptocurrencies

Trade Recommendation: Ethereum

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The price bounced from 300.00 level. RSI and a reversal candlestick pattern confirmed price reversal. MACD supports upward movement and DMI allows opening long trades. Pending orders for buy should be placed above the local swing at 318.00 level. Stop orders should be placed below 300.00 support at 286.00 level. Profit targets are 350.00 and 390.00 levels. If you don’t use leverage, recommended trading volume for this trade is up to 10% from your deposit.

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Market: ETHUSD
Buy: 318.00
Stop: 286.00
Profit Targets: 350.00 and 390.00

The trading signal is based on Poloniex chart.

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