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Daily Analysis: Bitcoin Explodes Above $2700 as US Stocks Hit New Highs

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Thursday Market Recap

Asset Current Value Daily Change
S&P 500 2411 0.38%
DAX 12643 0.03%
WTI Crude Oil 51.07 -0.10%
GOLD 1257.00 -0.18%
Bitcoin 2710 11.61%
EUR/USD 1.1218 -0.17%

The S&P 500 and the NASDAQ both reached new marginal all-time highs amid the Bitcoin surge, as the Fed’s minutes boosted the market yesterday in late trading. The central bank announcement delivered another blow to the Dollar, despite pointing to the stability of the rate hike schedule, with a likely tightening move in June. European equities are still lagging their US peers, with the Euro’s rally weighing on equities. The Japanese market is also up slightly, while Chinese stocks continued to soar, as the surprise rally since the Moody’s downgrade carried the Shanghai Composite near its bounce-highs from last week.

Shanghai Composite, 4-Hour Chart Analysis

The US Dollar recovered once again off its overnight lows, as it seems to have found some sort of support for the first time since Trump’s Russian scandal started to really hurt the currency. Oil turned volatile following the OPEC’s 9-month production cut extension that caused a disappointment among traders, as some analysts were expecting a 12-month agreement. The recent strong rally also contributed to today’s decline, leaving less upside for the crucial commodity, and setting up a sell-the-news event. Currency markets are relatively calm with some selling in commodity-related currencies, but a generally risk-on sentiment.

Cryptocurrencies

Bitcoin stole the headlines once again, as the mainstream media’s attention is starting to focus on the main cryptocurrency amid the surging Asian demand, the accelerating adoption, and the string of all-time highs. The total value of Bitcoins hit $44 billion today, getting close to the 50% of the coin market yet again, as several majors dipped lower after the recent leg of the broad rally. XRP fell below its recent support near 0.30, losing almost 20% today, while ETH is down by 5%, still trading near $200. Dash, Monero, NEM, Bytecoin, and Stellar are deeply in the red, with double digit losses, while ETC is just shy of yesterday’s highs, getting close in market value to NEM.

Bitcoin, 4-Hour Chart Analysis

Technical Picture

The S&P 500 is trading just above the crucial 2400 level again following last week’s brief dip, with the main US benchmark fighting that for several weeks now. The NASDAQ regained its relative strength in recent days, and it also hit a new high, despite the lack of momentum and the internal weakness of the market. Only 61% of US stocks are currently trading above the 200-day moving average, while a few big names continue to lift the indices. Should the S&P 500 hold above the 2400 level sustainably, another leg higher is likely, especially if volatility remains as low as currently, with the short- and long-term trends still being bullish.

S&P 500, 4-Hour Chart Analysis

Key Economic Releases on Thursday

Time, CET Country Release Actual Expected Previous
10:30 UK Revised GDP 0.20% 0.30% 0.30%
14:30 US Initial Jobless Claims 234,000 236,000 236,000

 

Key Economic Releases on Friday

Time, CET Country Release Expected Previous
01:30 JAPAN National Core CPI 0.40% 0.20%
14:30 US Core Durable Orders 0.40% 0.00%
14:30 US Prelim GDP 0.90% 0.70%
16:00 US UOM Consumer Sentiment 97.6 97.7

 

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 415 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

Monero Price Analysis: Wider Adoption Seen as Bity Adds XMR Support to Their ATM Network

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  • Swiss-based cryptocurrency organization, Bity, has added their support for XMR for use at ATM terminals.
  • XMR/USD trading up on Friday, with gains of over 3% at the time of writing. Despite this, weekly chart view still points to the downside.

XMR/USD is trading in positive territory on Friday, having gained over 3% during the session. This leaves some optimism heading into the weekend, which is normally characterized by lower trading volumes. Trading over the past eight sessions now has been very much choppy, signaling a lack of direction in the underlying market. Any short-term bull runs observed have quickly been sold by the bears, consistently.  The price is trading around the lowest levels since August 2017 and is down over 90% from the start of 2018. Despite the minor relief upside Friday, there still appears to be room for downside in the short term. Once again, price action is largely dictated by technical factors as opposed to fundamental.

Wider XMR Adoption Following Bity Support

Bitly, a Swiss-based cryptocurrency organization, has announced their support for Monero (XMR). They are a cryptocurrency exchange, in addition to operating a network of cryptocurrency ATMs. Their users can instantly and securely transact bitcoin in addition to buying ETH and now XMR with Swiss Francs and Euro. This can be done at physical terminals in Switzerland. Bitly has additional kiosks in Zurich, Zug, Winterthur, Basel, and Lausanne. They note that more locations and additional token support are coming soon.

Technical Review – XMR/USD

XMR/USD 4-hour chart

Price action over the past seven sessions now has been forming a range-block, moving within consolidation mode. This has come after some stabilization, following the chunky sell-off from November through to early December. The current price behavior can also be perceived when looking technically, as a potential bearish flag pattern formation. If playing out to the textbook, another extended move to the downside will be seen.

Downside Targets

XMR/USD weekly chart

The near-term bottom can be eyed at $41.00, which is the floor of the most recent range. A failure of this holding will likely see another wave of selling pressure. Looking further to the downside, the next eyed support is seen at $38.45, which was a key weekly level in July 2017. Lastly, any breach here would invite a drop below the $30.00 mark toward the weekly support at $29.00. This would be the lowest level hit since July 2017, when XMR/USD was in the early stages of the big bull run.

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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4.5 stars on average, based on 84 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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Analysis

Ripple Update: Bulls Poised to End Bear Market

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Ripple (XRP/USD) came to life on September 18, 2018 when it breached resistance of $0.30. This sparked an unexpected yet strong rally to $0.79132 on September 21. In a matter of three days, Ripple skyrocketed by over 160%.

The price action can make it seem that bulls have finally taken over the market. Unfortunately, the pump was nothing but a dead cat bounce. Once the rally faded, Ripple lost all bullish momentum. Those who bought the bottom between $0.25 – $0.30 leveraged the pump to distribute positions and instigate the markdown.

Ripple may look incredibly bearish right now but it actually has an opportunity to end its year-long downtrend. In this article, we reveal how bulls are in a position to end the Ripple bear market.

Possible Double Bottom Formation

It’s quite difficult to be bullish on Ripple especially if you’re a day trader. A quick look at the 4-hour chart shows that the market is forming a bear flag. Breach of $0.30 support is a continuation of the bearish trend.

4H chart of XRP/USD

If Ripple breaks out of this pattern, the target is support of $0.25. This is where bulls can make their stand and end the bear market.

At that point, conditions will be right for the defense of $0.25. The 4H and the daily RSI will likely be oversold. On top of that, the daily RSI has the potential to create a double bottom pattern. The likelihood of bearish exhaustion and the increased demand at $0.25 will make it easy for bulls to establish a double bottom pattern on the daily chart.

Possible bottom for Ripple

A double bottom structure makes sense at this level because $0.25 is the market’s parabolic support. If you look at the weekly chart, you will see that this level used to be a strong resistance area. When bulls blasted through it in December 2017, Ripple skyrockted to $3.30.

Weekly chart of Ripple

If bulls can hold on to this level, they can effectively end the bear market.

Shift from Markdown to Accumulation

The end of the bear market does not imply an immediate trend reversal. Although it is within the realm of possibilities for Ripple to pump itself into a bull run, we expect the market’s trend to shift from down to sideways. The formation of the double bottom structure should end the bleeding and usher in a new market cycle.

XRP range accumulation

We expect Ripple to range trade between $0.25 – $0.57 for the next few months. This will be the time when market makers and smart money investors enter positions in preparation for the next market cycle. As long as $0.25 holds, it would be wise for retail investors to accumulate positions at these levels as well.

No one can tell when Ripple will shift from accumulation to markup. When it does, however, those who bought positions near $0.25 can potentially grow their investments by over 1,200% if the market revisits its all-time high of $3.30 on the next bull run.

Prepare for Invalidation

Buying at the projected accumulation range sounds promising. Nevertheless, there’s always a possibility that our assumptions are incorrect. In the off chance that the bottom is not yet in, we can expect the market to perform these steps:

  • Weak bounce and inability to take out range midpoint of $0.41.
  • Breach of $0.25.
  • Retest of $0.25 as resistance  

Possible bear market continuation

Should this happen, you can cut your losses at the retest of $0.25 as resistance to minimize your risk.

Bottom Line

Ripple may look bearish right now but in reality, bulls have a decent shot to end the bear market. If they’re successful, we can expect Ripple to range trade for the next few months in preparation for the next bull run. This is where retail traders can accumulate with the smart money investors. However, it is also wise to plan for invalidation and protect your capital.

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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3.8 stars on average, based on 287 rated postsKiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and ETFs, as he does his own crypto research and is the subject matter expert at ETFdb.com. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.




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Altcoins

IOTA Price Analysis: Audi and IOTA Partnership Moving Strong; Price Behaviour Not Reflecting That

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  • IOTA and Audi partnership is said to be progressing forward, according to Audi representative.
  • Price action for IOTA remains tilted to the downside, and a bearish technical set up eyed.

IOTA (MIOTA) price remains very much depressed, in line with current stubborn market conditions. It continues to trade around the lowest levels seen since July 2017, with a lack of slowdown signs for now. Since the start of the year, the price is down a chunky 95%. The bears have the opportunity to run this further south, as there isn’t much in the way of support seen. This is all despite the strong growth fundamental prospects for IOTA.

Audi and IOTA Partnership Moving Strong

Earlier this year, IOTA announced a partnership with Audi Think Tank as the foundation was moving with the development of a permission-less mobility ecosystem. IOTA believes this structure of working is a strong route to understand how automakers are approaching innovation and development. The foundation previously noted that they see it as a great opportunity to incorporate into a new mobility solution, backed by strong suite of skills that Audi associates possess.

An update hit the wires this week, suggesting the Audi and IOTA partnership is progressing forward. The venture development manager at Audi Denkwerkstatt Berlin, Malte Schönfeld, provided some commentary via his LinkedIn account:

“What an awesome experience! The last five months we had a great time at the Audi Denkwerkstatt Berlin. Working in cross functional teams with IOTA on a new project. With the focus on enabling trust for the user in emobility, we pushed a new use case to reality. Stay tuned for further Information.” Matt Schönfeld also sent many thanks to all that are involved with the project, including IOTA founder Dominik Schiener and Alisa Maas, Head of Mobility and Automotive at the IOTA Foundation among others for “putting so much energy & passion into this project.”

Technical Review – IOT/USD

IOTA/USD 4-hour chart

Keeping in mind the decline discussed at the start of this piece, the most recent price behavior remains worrying. As seen via the 4-hour chart view, IOT/USD is moving within a range-block formation. The price is very much within consolidation mode. As a result, it remains at risk of another extended move to the south. It can also be perceived as a potential bearish pennant formation, which technically is subject to a breakout tot the downside.

Downside Targets

IOT/USD weekly chart

Looking at downside levels of potential support, the next area to note would likely be $0.1750. This is a weekly support seen since July 2017, week of 17th. Should this fail to provide any comfort, the next level is eyed at $0.1425, the weekly support for week of 10th July 2017. These moves would be similar to other cryptocurrencies in terms of finding that bottom area. For now, all remains tilted in favor of the market bears.

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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4.5 stars on average, based on 84 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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