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Market Overview

Derailed

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Hi Everyone,

Another day another crypto related hack.

Even though the volumes traded at the crypto exchange known as CoinRail are rather insignificant, it seems that alternative investors are taking this hack quite seriously.

Despite CoinRail freezing all trading and keeping its lips sealed about specific numbers, some reports indicate that about $40 million worth of tokens were actually stolen. Of course, these estimates were made using yesterday’s prices. Since then, the value of all cryptos has dropped by about 10%.

Here’s a new strategy: any time someone steals something, we reduce the value of the stolen goods on the open market.

Kidding aside, there is absolutely no reason why this smash and grab job at a local boutique should have sent bitcoin down by $1,000. More likely, what we’re seeing is more of a technical correction as we’ll explore below.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Pic of the Year
  • Holy Oil
  • Bitcoin Chart

Please note: All data, figures & graphs are valid as of June 11th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Responding to reporters on Friday afternoon, President Donald Trump seemed very proud of the fact that he hadn’t prepared much for his important meeting with the other global leaders at the G7. If his intention was to derail this negotiation, then indeed not much preparation was needed.

If a regular picture is worth 1000 words, my guess is that this one is worth 10,000. Most telling I think, is Shinzo Abe, who at second glance actually seems to be mirroring Trump’s body language.

Shortly after this shot was taken, President Trump left the meeting early and is now in Singapore preparing for his historic meeting with Kim Jong Un tomorrow.

Global markets seem to be in a rather good mood this morning with all major indices in the green, especially in Asia where stocks are up by about 1% today.

This comes as the US Dollar remains under pressure. It’s come up a long way since mid-April but like President Trump’s policy, the next move is rather uncertain.

The Church on Climate Change

Excuse the pun, but it does seem that Pope Francis the First is a little unorthodox. Over the weekend, he sat with some of the biggest oil tycoons in the world to express his concerns about climate change.

While recent efforts by the energy industry to reduce its carbon footprint were commended by the Supreme Pontiff, it seems there’s still more that can be done.

On the surface, it does seem that the Pope’s interests are actually aligned with the oil barons as many of them are already investing billions into clean energy. In the short term of course, they can probably use this as an excuse to limit production and keep prices up well into the transition.

Bitcoin $1000 Plunge

A deeper analysis reveals that the media may be attributing too much of this plunge to the CoinRail hack.

Here we can see the short term graph. The purple circle shows the approximate time when news of the hack was spreading on social media sites.

As we can see, the big drop came more than 15 hours after the news was fully digested by the markets. Notice that yellow line?

That’s the long-term trendline that we’ve been tracking since the beginning of the year. The break below it was in fact more significant than any hack could ever be.

Here we can see the long-term graph, with the same yellow trendline. Two main levels of support remain. The green line is the lows that were tested and held in early April, and the red line is the low from February 6th.

Ultimately, it seems that the market has been trying to take out that yellow line for several months now. So now that that’s out of the way, what’s next?

Though the CoinRail hack may have set us off-track, I don’t think that this will have very significant ramifications in the long run. The industry has certainly seen much bigger hacks before and other than a technical price level, this doesn’t change much for the path of the industry over the next five years.

At the moment, we know that the infrastructure is still under construction, and some very big investors stand ready to enter the market. However, they will most likely wait until an upswing to join in. We got a taste of that in mid-April when FOMO hit the market like a ton of bricks but in the end wasn’t strong enough to change the trend just yet.

For now, the big money will most likely remain on the sidelines and wait for emerging markets to build momentum, as they did in late 2016. Whether this happens over the course of a year, or within a week, I guess we’ll have to wait and see.

For today, just try not to worry about it too much. A well-diversified portfolio is one that will always withstand the test of time.

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.

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.

Best regards,
Mati Greenspan
Senior Market Analyst

eToro: @MatiGreenspan | Twitter: @MatiGreenspan | LinkedIn: MatiGreenspan | Facebook:MatiGreenspan

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 138 rated postsSenior Market Analyst at Etoro.com.




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Market Overview

Les Minimum Wage

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Hi Everyone,

Master of the house, President Macron has heard the people singing a song of angry men. Though it’s possible he has a heart full of love, many French citizens still see him as living in a castle on a cloud.

If you’ve never heard the play Les Miserables, or if you’d like to listen to it again, here’s a good version on YouTube. Personally, I haven’t been able to stop listening to it since the Yellow Jacket protests began.

France has recently become the most taxed nation in the OECD, which could explain why the ongoing protests are one of the worst in the country’s history.

Macron’s plea yesterday and his promise to raise the minimum wage may calm nerves just a bit, but the problem may yet persist. We’ll need to see how things progress over the next few days.

Certainly, the economic impact of a wage increase and less taxes is probably the least of the market’s woes at this exact moment. Nor the estimated $11 billion loss for small businesses.

What’s most concerning for global markets though is not just Paris. As central banks begin to engage in economic tightening we’ll need to keep our eyes open and hope this doesn’t spread.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Resistance at 24601
  • Brexit Drops the Pound
  • Two Biggest Crypto Markets

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

Traditional Markets

Stocks sunk to new depths yesterday with the Dow Jones reaching its lowest point since May 4th. The drop came as volatility increased and bond yields continued to slide.

Though things were indeed looking down, at the end of the day came a miraculous recovery and US Indices began a rally somehow managing to end in the green.

Most other markets were already closed by the time the rally came in and so did not reap the benefits. Perhaps more notable is that the banking sector didn’t recover at all.

In this graph from Bloomberg, we can see the Bank Index (white) against the tech sector (blue).

Stocks today are decidedly flat today. Perhaps it’s a coincidence but the Dow Jones is showing a heavy resistance line exactly at 24601. If it manages to get over that line, the recovery could very well sustain a bit longer.

As the US Dollar continues to range, we’ll keep our eyes on Crude Oil’s lows and Gold’s highs, both of which are seeing a test at the moment.

Brexit

Theresa May managed to pull another short-term victory by delaying a critical vote in Parliament. At this point, she can clearly see that there isn’t sufficient backing to pass her current Brexit deal. So now she heads to the EU to see if there’s another victory to be had. Perhaps one that will somehow help garner support at home.

At this point, some observers have pointed out that she might be trying to wind down the clock. If the current deal is better than no deal, and there isn’t sufficient time to negotiate a new deal, the perhaps the government will have no choice but to accept the deal that’s on the table.

In any case, as May addressed members of the parliament yesterday the British Pound sank to new lows (purple circle). On the bright side though, we’re seeing a strong recovery coming in this morning.

Crypto Regions

Results are now coming in for India’s provincial elections. Unrelated, but in an interesting turn of events the Governor of the Reserve Bank of India has stepped down. Even though Urjit Patel says that he’s stepping down for personal reasons, it hasn’t stopped pundits from speculating as to why he’s leaving the post after serving the shortest term since 1992.

The most common theory is that Patel was facing increased pressure from the government to employ a looser monetary policy, something he presumably was not prepared to do.

The reason I’m telling you all this in the crypto section is because India is by far one of the largest potential markets for crypto adoption and it was the RBI who set up the current crypto-blockade in the first place. There is now a committee to select the next RBI Governor and this can actually be a good thing for crypto outlook in the country, depending on who they pick. Well, it can’t be worse anyway.

In any case, the new Governor, whoever it may be will probably have their hands full with everything else going on anyway. As well as the finance ministry. So, unfortunately, this whole thing could get swept up in politics. However, this new progression might prove to be a wild card for crypto enthusiasts.

Meanwhile, it seems that China, the largest potential market for crypto adoption, has stepped up their rhetoric against digital assets. The People’s Bank of China is showing us how on top of things they are by clarifying that STO‘s (a term that has only recently gained popularity) will not be tolerated.

Though there are no Chinese laws against Security Token Offerings, it seems the punishment is now banishment.

The above two updates may not have much effect on short term prices but the second one is proving to be a popular talking point on crypto social media as we continue testing the lows and searching for the floor.

Passez une super journée!

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

eToro is a multi-asset platform which offers both investing in stocks and cryptocurrencies, as well as trading CFD assets.

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.

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 138 rated postsSenior Market Analyst at Etoro.com.




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Market Overview

U.S. Stocks Bounce Back and Brexit Brakes: Market Wrap

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U.S. stocks overcame a volatile morning to finish higher on Monday, though trade-related risks remained in focus following the arrest of a high-ranking Chinese technology executive. The U.K.’s Brexit process stalled on the eve of a critical parliamentary vote after Prime Minister Theresa May’s cabinet warned of a major backlash in the House of Commons.

Stocks Push Higher

Wall Street turned positive in the final hour of trading, with the S&P 500 Index gaining 0.2% to 2,637.72. The large-cap index was down as much as 1.9% earlier in the day.

At the sector level, losses on Monday were largely concentrated in energy and financials shares. Large gains were reported for information technology and communications services.

A strong performance in tech-related sectors drove the Nasdaq Composite Index firmly higher. The benchmark added 0.7% to close at 7,020.52.

The Dow Jones Industrial Average reversed losses and gained 34.31 points, or 0.1%,to close at 24,423.26. The Dow was briefly down more than 500 points on Monday.

Brexit Vote on Hold

In the face of broad opposition, U.K. Prime Minister Theresa May has delayed a parliamentary vote on her government’s Brexit plan, a move that could undermine the March 2019 timeline for leaving the European Union. As The Wall Street Journal reported, May postponed he vote, originally scheduled for Tuesday, after consulting with her cabinet. Cabinet members believe that May’s bill will have little chance of being passed amid the ongoing debate over Northern Ireland’s border following Brexit.

The news triggered a massive drop in the British pound, which fell on Monday to the lowest level in over a year. Sterling bottomed near $1.2510 U.S. before recovering around $1.2556 U.S., where it was still down 1.3%.

Theresa May has struggled to fulfill her government’s Brexit mandate since she took over as prime minister from David Cameron more than two years ago. This included botching an early election, which weakened her party’s standing in the House of Commons, and struggling to unite hard Brexiteers with those calling for a softer exiting from the EU.

Oil at a Standstill

The price of crude resumed its defensive posture on Monday, as traders continued to doubt the ability of OPEC and its allies to re-balance an oversupplied market.

On Friday, the Organization of the Petroleum Exporting Countries and Russia agreed to curb their daily crude production by a combined 1.2 million barrels. The output cut is intended to bring global supplies back in line with demand ahead of a tepid consumption forecast for 2019. Slower economic growth and trade uncertainty between China and the West are expected to put a damper on crude demand over the next 12 months.

Citi, a U.S.-based financial institution, believes global crude prices will average $60 a barrel in 2019, which is virtually identical with today’s prices. Citi analysts believe that OPEC’s production cuts may push prices higher in the short run, which will allow U.S. producers to ramp up their production over the longer term.

“OPEC+ did the work of drawing down inventories that otherwise would have to be done through a painful period for shale producers,” Citi said in a research note, according to CNBC. Additionally, “the more OPEC+ tries to support prices by withholding oil from the market, the more they give the US shale sector an out from rationing supply growth themselves.”

As Hacked recently reported, the United States recently became a net exporter of crude for the first time in 75 years, raising optimism for a new era of energy independence.

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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4.6 stars on average, based on 692 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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Market Overview

Fundamental Dissonance

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Hi Everyone,

As with many things in the crypto world, the methods we use to determine the value of cryptoassets is still under construction.

We did make an introductory video about this last month, take a look here. One of the thought leaders when it comes to building these fundamentals is a Venture Capitalist named Christopher Burniske.
Over the weekend, Chris put out a blog called “Bitcoin & Ethereum: Prices are Down More than the Fundamentals.”

As the title suggests, the post takes a good look at some of the network factors including the supply side (hashrate) and the demand side (daily transactions, functionality, active wallets) for two of the most popular cryptos.

Overall, these factors tend to line up fairly well with the price but Chris points out a divergence that could suggest the market is now oversold.

Here’s one graph that jumped out at me. It shows that usage of the Ethereum network has remained incredibly consistent since the beginning of 2018, yet the price has done nothing but fall in that time.

This research is a strong affirmation of our previous assessment that the volatility we’ve seen over the last month is primarily a technical sell-off and there is no fundamental reason for it.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Gaps Despite Good News
  • OPEC Strikes a Deal
  • Dash Fast Food

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

Traditional Markets

The Jobs numbers didn’t come in so hot on Friday and the markets ended up falling to their lows. The sentiment was so negative by the end of the week that when the futures opened last night, they opened with a large gap down.

However, headlines this morning saying that stocks are down may not be entirely forthcoming. The down they’re referring to is simply because of the gap down at the open. Since the open, they’ve been fairly mixed with some regions up, some down, and some flat.

So far this morning, the news cycle is rather gloomy but it really doesn’t seem to matter. The markets are far from reacting to the fundamentals anyway. The weaker than expected jobs numbers on Friday should probably have been taken by the markets as a positive sign. Yet, here we are.

The weaker stance taken by the Fed coupled with the recent agreement between Xi and Trump should be supporting the markets at the moment but I rest my case.

Focus has now shifted to central bank policy again. This Thursday we’ll get the interest rate decisions from the European Central Bank and the Swiss National Bank. Next week we’ll hear from the US Federal Reserve.

OPEC Strikes a Deal

Seems that OPEC was able to strike a deal on Friday to cut global production.

The market reaction shortly after the deal was announced (purple circle) was a swift rally in crude oil prices, but half the move reversed by the time the markets closed and so far this week prices are remarkably stable.

Also, keep an eye on gold today. The shiny yellow metal has been gaining on the back of a weaker Greenback.

Dash to Fast Food Adoption

Just as we noticed above, there is a great diversion between what’s happening in the news and what’s happening in the prices. An excellent example of that is Dash currency, which has had some excellent updates lately yet has fallen about twice as much as any other crypto in the last 24 hours.

Dash has been making excellent progress on the ground lately, especially where crypto is needed most. This latest headline shows they are set to vastly increase their market share of overall money in Venezuela.

KFC isn’t the first major fast food chain to go Dash either. Both Papa John’s and Subway are already successfully using Dash for fast fast-food payments.

In general, Dash has been adding merchants left and right. The directory site keeping track has already counted more than 4,400 locations, especially in Venezuela.

Furthermore, the Dash Core Foundation has recently reported that they’re weathering the storm quite well and that the network’s coffers are more than sufficient to sustain operations and even expand further.
Addressing directly the bear market and the climate squeeze that we mentioned in our daily update last Wednesday (titled: Digital Natural Selection), the CEO of Dash Core Group has written this blog post explaining that the finances of DCG are in excellent shape.
Given this type of fundamental dissonance at play, it can make it difficult for the average investor to choose the projects that have a bright future and distinguish them from those that are in for a sharper downturn.
Let’s hope for some swift clarity and return to harmony.

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

eToro is a multi-asset platform which offers both investing in stocks and cryptocurrencies, as well as trading CFD assets.

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.

Best regards,
Mati Greenspan
Senior Market Analyst

Connect with me on….

eToro: @MatiGreenspan Twitter: @MatiGreenspan LinkedInMatiGreenspan |Facebook:MatiGreenspa

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 138 rated postsSenior Market Analyst at Etoro.com.




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