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Analysis

Crypto Update: Coins Still Stable as Ripple Breaks Trendline

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While the major coins didn’t make too much progress in the last couple of days, with a few exceptions like Bitcoin Cash, Lisk, ETC, and Monero, the price action is encouraging considering the recent period and the global environment in financial markets. The segment shows clear signs of resilience amid the elevated levels of uncertainty in the investment community following the stock market crash on Monday.

XMR/USDT, 4-Hour Chart Analysis

There was no relief for equities in the Asian session; in fact, the local indices actually underperformed their US and European peers, while more than $5 trillion of market value has been erased in less than a week globally.

The most valuable digital currencies are all holding up well above their lows form Monday, as the whole segment is up by almost 40% on average, despite the overnight dips of the last two days. The ongoing consolidation could serve as a base for another leg higher in the rally, and that could cement the lows as a likely long-term cycle low.

BTC is trading just below its weekly highs right now, within a relatively narrow range that developed in the $7500-$8650 range. We expect a very active session in stocks and other traditional assets in the US, and it will be crucial to see how Bitcoin will perform in the volatile conditions.

In the case of a sell-off, the lower end of the range could be in focus, but it seems likely that the coin will hold up above that level and tackle the range between $9000 and $9200 in the coming week.

BTC/USD, 4-Hour Chart Analysis

Ripple Back in Action with $0.85 in Sight

As the bullish continues in the segment, it’s once again XRP that is leading the gains today, breaking-out from the steepest downtrend and heading towards the key $0.85 resistance as we speak. While the success of the break-out is not guaranteed, since the broader downtrend is intact and volatile dips are still expected as part of the bottoming process, the coin is showing positive signs, and aggressive traders could remain long here.

XRP/USD, 4-Hour Chart Analysis

The other majors are trading virtually unchanged, in choppy market conditions, but things can get heated as soon as US markets open.

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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4.6 stars on average, based on 316 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

Pre-Market: Stocks Rebound as Turkish Tensions Ease

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While nothing has been fixed in Turkey overnight with the vague plans announced to fight inflation by the finance minister, global markets rebounded after yesterday’s panicky conditions.US stocks undoubtedly led the way higher yet again, as the Lira, which made it to the mainstream media in the last few days, is up by more than 7%, with the USDT/TRY pair pulling back to 6.50 from a high above 7, and risk-on assets are higher globally, with especially equities staging a rally.

USD/TRY, Daily Chart Analysis

The other emerging market currencies that sold off are also correcting, with the Argentinean Peso, Brazilian Real, and the Russian Ruble all being off their lows. Despite the positive signs today, the underlying trend is still bearish in the FX segment, and the Dollar’s strength doesn’t seem to abate, with short-term Treasury yields also looking stable.

DAX Index, Daily Chart Analysis

While the major European indices are slightly in the green, headed to the closing bell, European banks that are exposed to Turkey are not showing much enthusiasm, and we expect risk-off sentiment to return in the coming days, until meaningful action is taken by the Turkish authorities.

Emerging market currencies are definitely feeling the contagion effects, with the Argentinean Peso, the Brazilian Real, and the Russian Ruble all being down big time in the last few days. So far, the Turkish leadership failed to calm the market, rather they fueled the fire with the aggressive rhetoric, and the seeming ignorance of the basic macro-economic rules.

In economic news, China was all the rage today, and the country that has been targeted by Trump’s tariffs is feeling the pain. It would be foolish to think that the trade war alone is to be blamed for the weaker than expected indicators across the board, but the skirmish between the two mega-powers definitely triggered a slowdown in the credit fueled economy.

Shanghai Composite, Daily Chart Analysis

Industrial production, retail sales, and investments all came in well below the consensus estimates, and with the Shanghai Composite already being in a bear market, and the Chinese Yuan hovering near its 13-month low against the Greenback, all looks set for a harsh awakening in China.

US Still the Island of Caolm

In the US all eyes are on tomorrow’s retail sales report, while today only two less important economic releases came out. The NFIB small business indicator was higher than expected and import prices were unchanged as the Dollar’s rise likely evened out the first effects of the new tariffs.

Nasdaq, 4-Hour Chart Analysis

The Nasdaq rebounded strongly overnight, leading the major indices higher again, and with that it got very close to its all-time high, outperforming the rest of the world by a mile. With powerhouses Apple and Amazon still pushing to new highs, even as more balanced portfolios are left behind, the tech index could set a new record as soon as today, should the otherwise shaky risk-on shift hold.

Copper Futures, 4-Hour Chart Analysis

Commodities are mixed so far today, as copper fell below $2.70 again, as it got hit hard after the Chinese data dump, while oil continued to rally, climbing back above $68 per barrel, with regards to the WTI contract.

Gold also bounced back above $1200, despite the Dollar’s rally against its major peers, and we have to wait and see if the spike below $1200 finally marked the lengthy downtrend in the precious metal.

Featured image from 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 316 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: 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 316 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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Altcoins

Crypto Psycho: Fear Could Be Our BFF

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Crypto prices continue to confuse.  For all the logic related to supply and demand, the reality these days continues to be that prices are being determined by emotion.  

The fundamental news these days is mixed. For example, take todays mention of Bitmain, one of the most valuable cryptocurrency companies, is expecting a September filing of an IPO for as much as $18 billion. That would eclipse even Facebook back in 2012.  The buzz swirling around Bitmain is about more than just crypto. Even so, $18 billion makes a loud and positive statement about investor interest.

On the other side of the digital coin, we have declarations from guys like Ken Bianco, who happens to be part of the US Treasury Office of Terrorism and Financial Intelligence.  Last week he spoke in threatening terms of how the US intends to enforce its AML/KYC regulations virtually everywhere in the world. If this sounds a little bit like an infamous German gentleman with an odd looking mustache, you have your history right.

In between these two extremes, of course, there has been lots of information each day that correlates closely with theoretical supply and demand for crypto, none of which has made a bit of difference as crypto prices continue to tumble.

Nevertheless, an objective point of view holds that there is a disconnect between what is happening in reality and crypto prices.

So unlike last year when prices were rising for no other reason than the fear of missing out (FOMO), today they are falling in the face of the fear of losing all (FOLA).  Maybe it’s fear that is the key to the future.

FOLA Could Be Our Friend

On many occasions we have mentioned how important traditional investors have used relative value.  We continue to believe that global stock and bond markets are overvalued using metrics like price earnings ratios and other financial measures.  While quantitatively speaking, this point is absolutely right, it hasn’t resonated. Since the beginning of the year, for example, investors in the Nasdaq Composite has enjoyed a 13% gain.

This gain comes even though Facebook, the fourth biggest stock in the cap-weighted Nasdaq Composite, has been a dud.  By comparison, over the exact time last year investors in the Nasdaq Composite experienced a 12% gain on the way to a bountiful 25% full year return. Overall, these folks have had very little reason to be unhappy, or fearful.

Tipping Point Could Come From Trump

Credit Datatrek for keeping a thumb on the pulse of the outside world.  Here are some insights from a recent poll on the fears of institutional money managers.  The two most important issues in late March were: unpredictable political events in Washington DC and Trade/tariff disagreements between the US and China.  Some 70% of respondents were very concerned or somewhat concerned about these issues.

Since then, things have only become more critical.  Washington’s confrontational foreign relations strategy is shaking global currency exchange markets.  In the last two weeks the Russian Ruble has lost 12% against the US Dollar. At the same time the US Dollar has increased over 40% against the Turkish Lira.  

While it can be argued that Turkey is of little importance to the global monetary system, Russia is not. Turkey plays a key role in the Middle East and any instability in that area is enough to strike investor fear that is reflected in energy, inflation and currency markets.

In earlier times, this scenario pointed investors in the direction of gold.  This is not happening. At the time of this writing, gold had just broken through $1,200 having fallen 8% this year.  In the face of the Turkish situation, this signals a loss in confidence for gold in a region of the world with a historic close connection to the metal.

Only Theory So Far  

Now if a strong correction were to take place in stock prices or an equally strong rally in crypto, there would be evidence of investors taking advantage of the relative value here. Unfortunately, at this moment that is not taking place. Bitcoin prices are down marginally but sellers continue to pound most altcoins. Until this changes, crypto prices are being driven down by FOLA.

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 96 rated postsJames Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.




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