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Analysis

Dimon: Bitcoin a Fraud, Worse Than Tulip Bubble

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Bitcoin flash-crashed once again following Friday’s scary move, this time after the comments of a prominent Wall Street veteran, who slammed the currency today afternoon in New York. According to Bloomberg, the CEO of the bank said at an investment conference that

Bitcoin won’t end well, (…) It’s a fraud” and “worse than tulip bulbs.

The “flash-crash” on the 5-minute chart

The cryptocurrency, and the whole segment took a hit, with the market cap of the 100 most valuable coins falling by $6 billion after the comments, and Bitcoin itself declining by more than 5% in a matter of minutes. He also told the attendees that he would fire anyone trading BTC under his watch, and reiterated the old, dirty money remarks and the illegal use of the decentralized currency. On another note, he said that he wouldn’t short Bitcoin as the price of the coin could reach new highs and there is no telling where the “bubble” will top out.

Correction Already Underway

BTC already vulnerable thanks to the overbought readings on the daily chart

With the sector already being pushed lower by a new wave of legislation in China, the remarks could cause another sell-off, although the banker didn’t say anything that hasn’t been told by other establishment players. We have been calling for a correction in the sector for weeks now after the monster rally off the July lows in the major coins, but the long-term uptrend seems unscathed even after the 20+% declines in the most important currencies.

With the overbought readings still not fully being cleared on the daily chart, we expect more downside in the currency and the sector, but buying opportunities should soon emerge. As it was the case before, these comments are unlikely to change the trend of adoption in the case of Bitcoin and the underlying blockchain technology.

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 294 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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10 Comments

10 Comments

  1. Calou

    September 12, 2017 at 10:18 pm

    He should have said that about Lehman Brothers…

    • Juniorxico2

      September 13, 2017 at 12:23 am

      Now they decided on a daily basis fire out loud on an effort to bring prices down and scare traders and investors away. I wish somehow cryptocurrency come up to the rescue of the planet financial crisis next.

  2. sickettyboy71

    September 12, 2017 at 10:20 pm

    Hard to take seriously someone who accepted a half-trillion dollar interest-free loan, funded by taxpayers and incurred partly because of financial mismanagement on his watch.. or who then had to appear before a Senate committee to justify $3 billion in trading losses that proved he was “dead wrong” about his preconceptions… or who disses his own daughter for trading in Bitcoin… or whose compensation package is (rather unambitious, this) based on “keeping JPMorganChase out of the bottom five in a ranking of 12 major banks”… and so on, and so forth.

    I believe the term we are looking for here is “asshat”.

  3. tieuthanhliem

    September 12, 2017 at 10:38 pm

    The dip was caused by Charlie Lee tweet that China bans Bitcoin exchanges.

  4. Glebness86

    September 12, 2017 at 10:59 pm

    Of course one of the pricks that helped orchestrate the stock market crash of ’08 would call the technology to prevent another crash a fraud.

  5. Inverstor Clouseau

    September 13, 2017 at 1:14 am

    I find it hard to believe that a clueless wall street banker, glorified by no one except the media could influence price action, much less a flash crash in a brand new technology designed to relegate the likes he. It should have more to do with the news from china and the banning or regulation of exchanges

  6. replysadiq@gmail.com

    September 13, 2017 at 7:58 am

    An extremely volatile crypto currency does not make economic sense. Blockchain could have future but that necessarily does not need to be accompanied by exchange traded currencies. It is good that ICO is banned(it should be banned everywhere) as it is fraud.
    Just because we want to make money(me included) makes something right

    • Calou

      September 13, 2017 at 9:25 am

      Agreed, central banks support to reduce the dips in the crypto currencies valuation would be helpful for wider adoption, however not quite in the spirit I believe.

  7. febrocas

    September 13, 2017 at 5:33 pm

    How can a ban in ICOs be a good thing. Because there are “fake” businesses? That’s a good enough reason, to avoid scams? I mean, you’re banning companies from funding their own businesses with cryptocurrency. How can that be a good thing, that’s what i would like to understand. Maybe because not all ICOs actually need a blockchain to operate? wouldn’t that be like saying to not invest in a company 20 years ago, simply because they didn’t need the “internet” to operate their business?

  8. sunil007

    September 14, 2017 at 10:35 pm

    Mr. Dimon is a idiot…….so sad…for him ofcourse…

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Analysis

Crypto Update: Altcoins Reverse Gains as Bitcoin’s Surge Fizzles Out

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The cryptocurrency market had one of the wildest days in months following yesterday’s epic short-squeeze in Bitcoin that triggered a strong segment-wide rally. While Bitcoin managed to break through several key resistance levels, the major altcoins failed to join the break-out, even as temporarily, some of them managed to move above primary resistance.

Ethereum topped $500 briefly, while Ripple cleared the $0.51 level, as BTC neared the $7650 resistance, but altcoins failed to trigger short-term buy signals, as they promptly reversed gains. As correlations remained very high despite the rally, and a bullish leadership is still missing, the market as a whole still shows bearish characteristics, even as the buy signal is intact in Bitcoin, for now.

Yesterday we also pointed out the relative weakness of altcoins and traders should still remain cautious with new positions, as, despite the recent moves, the technical setup is still unchanged in the segment.

BTC/USD, 4-Hour Chart Analysis

Although Bitcoin reached the next major resistance level at $7650, the weak altcoins now dragged the largest coin back below the $7350 support, and the odds of failed break-out are growing in BTC as well. While the buy signal is intact, the coin needs to stay above $7000 to avoid a bearish reversal, with further support below that found at $6750 and $6500.

Ethereum’s Reversal Warns of a Fake-Out

ETH/USD, 4-Hour Chart Analysis

While ETH was close to triggering a buy signal, we warned traders that without follow-through the short-term trading range and the declining trend would remain unchanged. The relative weakness of Ethereum persisted today as well, and the coin failed to stay above $500, and now it’s back on a short-term sell signal, and it gave back all off yesterday’s late-day surge.  Primary support is still found at $450, with other levels at $420, $400, $380, and $360 while resistance is ahead at $500 and between $555 and $575.

LTC/USD, 4-Hour Chart Analysis

The bearish leaders, like LTC, Monero, NEO, and Dash couldn’t get durably back above the key breakdown levels, and the major altcoins all followed a similar path to ETH thanks to the elevated correlations. As no buy signals popped up, a trend change wasn’t completed even in the relatively stronger coins. The failed break-outs could point to another move towards the June lows, and traders should still remain cautious with new positions here.

XRP/USDT, 4-Hour Chart Analysis

Ripple couldn’t durably move above key $0.51 level despite yesterday’s move, and the coin is now back below the primary $0.49 support following the bearish reversal. The relatively weak coin is still well above the June low, but another test is now likely, and the long-term setups remain dangerous. Further resistance is ahead at $0.54 and at $0.575, while primary support is now found at $0.45.

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 294 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

Stocks Mixed as Dollar Tests Highs Again

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Choppy summer trading conditions continue to dominate traditional financial markets, with low train volumes and relatively narrow intraday ranges in most of the asset classes. Despite the low activity, there is still a clear rising trend in US markets, while the rest of the world tries to gather some bullish momentum despite the widespread technical relative weakness.

Trump’s controversial meeting with Putin still made the most headlines, although stocks largely ignored the story, while trade war fears and the Brexit drama had much stronger impacts, with especially the Pound performing weaker than its peers.

Dow Futures, 4-Hour Chart Analysis

The Nasdaq is still trading just below its all-time high, despite today’s weaker session, while the S&P 500 hit another marginal 5-month high today, with the Dow still lagging behind the rest of the market. The ongoing earnings season also adds to the choppiness of the day-to-day price action, and with the deep global divergences still present, we remain defensive towards equities here.

Shanghai Composite, 4-Hour Chart Analysis

Asian equities experienced a bounce in the last couple of weeks, but China which has been the epicenter of the weakness in June is still struggling to join the move. The trade-war torn Shanghai Composite is still trading near its recent lows, confirming the bear market, while the Yuan hit new 12-month lows compared to the USD in the last couple of days again.

Commodities Mixed as Yuan Tumbles but Dollar Rally Looms

Emerging market currencies are generally under pressure, and the Dollar has been pushing higher against its major peers as well today, with the Great British Pound and the Euro both sliding towards their June lows, and the Yen hitting a new year-to-date low before the afternoon pullback in the Greenback.

Dollar Index, 4-Hour Chart Analysis

The Dollar’s rally, which was boosted by the lower than expected British CPI release in European trading paused somewhat in late trading, after the Dollar index got close to its 1-year high. The US housing market showed a huge drop in activity in July, with Building Permits disappointing and Housing Starts falling off a cliff unexpectedly. The rising yields, which are behind most of the moves this year, are talking a tall on the segment, and that could be a major drag on GDP growth in the coming quarter.

Gold Futures, 4-Hour Chart Analysis

Commodities posted a reversal-like performance today, with gold, oil, and copper all rebounding off their early lows, but for now, the bearish short-term trend remains dominant in the segment. The bounce in gold still left the precious metal below short-term resistance at $1240, while copper is still bouncing around just above long-term support. WTI Crude Oil which lost more than 10% in a matter of days, found support at $66 per barrel, entering a consolidation phase after the rout.

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 294 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

Technical Analysis: BTC/Tether

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Tradingview is a web application that allows full charting abilities for free. Different online brokerages have different charting abilities and tools.  Using tradingview.com, I was able to utilize Fibonacci zones with the following levels: 23.6%, 38.2%, 50.0%, 61.8%, and 100.00%. I did not set support or resistance levels because they are irrelevant to this analysis. Using indicators such as volume, moving-average convergence divergence (MACD), and Relative Strength Indicators, we are able to predict the movement in the price of Bitcoin relative to Tether. One Tether (USDT) is equal to one U.S dollar, give or take 3 cents.

This 3 day analysis uses price movements plunging into the 61.8% Fibonacci zone to trigger a buy signal. From there, we verify the buy signal with the MACD indicator below the chart. Notice how the MACD looks like a sell signal, but in fact goes back negative. Moving from a negative spread to a positive spread, triggers the buy signal as the price bounces off of the 61.8% Fibonacci level.

Following the next two days, I conducted another analysis using the same strategy. This time I inserted a support where three touches occur in the price.  Bitcoin’s price took a dive on volume pointing to a massive selloff. We were able to capitalize on this by waiting until the price crossed the Fibonacci barrier into the 61.8% zone. From there, the MACD spread checked out at -8.68. A buy signal was created and we waited until the price neared the top of the 50.0% zone.

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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1 stars on average, based on 1 rated postsMichael Genna works in Business Development at Benzinga, a financial media and technology company located in downtown Detroit. He attends Wayne State University, majoring in finance with a minor in economics.




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