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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

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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.

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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.

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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. [email protected]

    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

Technical Analysis: Bitcoin Up Again as Altcoins Mixed in Volatile Trading

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Bitcoin is at a new all-time high today, although the momentum of today’s move is far below from what we saw recently, and the coin only managed to reach a marginal record high yet again. BTC is now worth $300 billion, and it is still trading right at the short-term trendline, inside a rising wedge pattern that shows a clear momentum divergence.

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With the short-term trend still being intact further gains are still possible, but as all the majors are overbought from a long-term perspective, we still advise investors to wait for a better buying opportunity before adding to their holdings. Primary support is still found near $13,000, with further levels at $11,300, $10,000, $9000, and stronger levels at $8200 and $7700.

BTC/USD, 4-Hour Chart Analysis

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 XRP entered a volatile short-term correction after its two-day surge after giving a short-term sell signal yesterday, and the coin spiked back towards $0.60 before settling down just below yesterday’s highs. The long-term setup also turned overbought thanks to the almost 300% rally, and now investors should reduce their holdings, even as further gains are still possible. Major support is still found at the prior high near $0.4250 and in the $0.30-$0.32 range.

XRP/USDT, 4-Hour Chart Analysis

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Analysis

Cryptocurrency Analysis: Ripple Continues Rampage as Litecoin and Ethereum Enter Correction

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Ripple remained in the center of attention in the segment after breaking out to a new all-time high yesterday, and the coin almost doubled in value, climbing above the $0.80 level. The currency concluded a 6-month long consolidation pattern with the move after being the only major on a long-term buy signal in our trend model.

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XRP gave a short-term sell signal today, while turning neutral regarding the long-term setup. Investors now shouldn’t add to their positions, although further gains are still possible, and reducing holdings somewhat is a good idea here. Major support is still found at the prior high near $0.4250 and in the $0.30-$0.32 range.

XRP/USDT, 4-Hour Chart Analysis

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While Bitcoin stagnated, and Bitcoin Cash jumped, Ethereum, Litecoin, Dash, and IOTA has been drifting slightly lower, although the recent gains are still mostly intact, and the basic setup in the segment is unchanged.

Litecoin fell below the $300 level after yesterday’s consolidation, and the coin faced strong selling pressure in the latter half of the session. The currency remains extremely stretched regarding the long-term momentum indicators, and although the short-term uptrend is still intact, a deeper correction is likely in the coming weeks, with key support levels found at $125 and $100, and weaker levels at $260 and $170.

LTC/USD, 4-Hour Chart Analysis

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Analysis

Daily Analysis: Dollar Falls, Gold Jumps after Yellen’s Final Move

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Wednesday Market Recap

Asset Current Value Daily Change
S&P 500 2668 -0.02%
DAX 13125 -0.45%
WTI Crude Oil 56.65 -0.68%
GOLD 1258.00 1.35%
Bitcoin 16,100 -6.32%
EUR/USD 1.1842 0.73%

The Federal Reserve hiked interest rates as expected today, and although the central bank’s monetary statement was slightly more hawkish than expected, the market’s reaction didn’t reflect the much-anticipated move. The worse than expected Core CPI reading that underlined the low-inflation narrative weighed on the recently strong Greenback, while stocks were unchanged after decision and bonds gained ground as yields retreated.

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EUR/USD, 4-Hour Chart Analysis

The major indices are hovering near their all-time highs with the DOW leading the way higher, hitting a new record for the second day in a row. While volatility Is expected to remain low as we approach the end of the year, market internals and valuation levels are still concerning from a long-term perspective, and stocks outside the US are also negatively diverging. The action in crude oil could be slightly more interesting as the commodity is starting to act in a slightly bearish manner after a grinding multi-month rally.

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WTI Crude Oil, 4-Hour Chart Analysis

The Brexit process is still in the center of attention in Europe, although volatility took a nosedive on the old continent as well, and it’s unlikely that the Christmas period will be much different, given the predictable drop in volumes and trading activity. The date of the next election in the financially and politically troubled Italy has been set to March 4th next year, and the early date caused some turmoil in the countries assets, which dragged the Euro Stoxx 50 lower today, together with the DAX and the other major indices.

Cryptocurrencies

As the total market cap of the crypto-market crossed the incredible $500 billion mark, Ripple, NEO, and Ethereum made headlines with lofty gains in the face of the severely overbought readings elsewhere in the segment. While XRP and NEO are still not overbought from an investment perspective, Ethereum reached our final target for its break-out and triggered a long-term sell signal.

ETH/USD, 4-Hour Chart Analysis

The previously surging IOTA continued its correction, Litecoin consolidated in a relatively narrow range, while Dash, ETC, and Monero scored marginal new highs before turning lower together with BTC. The most valuable coin that has lost some of its momentum “mojo” in recent days fell back below last week’s highs, and that could mark a failed break-out and a start of the deeper correction that seems more and more likely.

BTC/USD, 4-Hour Chart Analysis

Key Economic Releases on Wednesday

Time, CET Country Release Actual Expected Previous
11:30 UK Average Earnings 2.5% 2.5% 2.3%
11:30 UK Claimant Count Change 5,900 3,300 6,500
11:30 UK Unemployment Rate 4.3% 4.2% 4.35
15:30 US Core CPI 0.1% 0.2% 0.2%
15:30 US Crude Oil Inventories -5.1 mill -3.6 mill -5.6 mill
21:00 US Fed Rate Decision 1.5% 1.5% 1.25%
21:00 US FOMC Statement

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