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Down the Rabbit Hole

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In a curious and completely unfair move, the Italian government has decided to issue a massive bailout of €17 Billion to close down two failing banks.

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As part of the deal, a bank called Intesa Sanpaolo will be making out like bandits as they have the option to buy any good assets that the two banks currently hold for pennies on the Dollar, while all the bad assets get transferred to a bad bank.

“With these two banks out of the way, it seems the Italian banking crisis is now behind us, at least as far as the bankers are concerned. Now, we only have the mess that is left for the taxpayers to clean up.”

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-Gabriel Debach
eToro, Italian Analyst

At the end of the day, it’s the Italian taxpayers who will end up footing most of the bill. Politicians claim that they don’t have much of a choice but we all know how that goes. As if the Italian’s self-inflicted political woes aren’t big enough, it seems the human cockroach Silvio Berlusconi is again making political gains in the ravaged country.

We’re still waiting to hear when the Italian general elections will be. Let me tell you when they do happen, it could be even stranger than a tea party with the mad hatter himself.

Mati Greenspan
eToro, Senior Market Analyst

 

Please note: All data, figures & graphs below are valid as of June 26th. All trading carries risk. Only risk capital you can afford to lose.

Market Overview

This analysis comes to you from popular investor Michael Cogswell, who goes by the handle @InvestPower on the eToro network. Seems he’s found yet another glitch in the market matrix.

Usually, stock indexes and bonds tend to move in the opposite direction but here we can see both rising simultaneously.

This shows us that stock investors aren’t willing to part with their shares while bonds investors are shying away from risk.

It seems that volatility hovering near the all time lowest levels has everybody a bit confused at the moment.

Eventful Day Ahead

The top event is Indian Prime Minister Narendra Modi visiting Donald Trump in the White House. Also on the agenda, Theresa May will give further details on how she sees the rights of EU residents in the UK after Brexit, even though May still has no deal with the DUP.

The cherry on the top today is Mario Draghi, who will open a grand old central banking ceremony in Portugal.

Though the VIX and stock indexes are relatively silent, there’s plenty of movement in the currency markets lately and even more in the cryptocurrencies…

Down the Rabbit Hole

Those investing on the world’s second largest cryptocurrency are already feeling the crunch and many are hitting the panic button.

The issue is, that when an asset rises this fast, it doesn’t really have time to build itself any familiar price patterns or notable levels of support.

Notable network congestion during recent ICOs has caused alternative investors to start questioning the stability of the Ethereum blockchain and no doubt some developers are starting to look at alternative options to implement their decentralized apps and smart contracts.

It’s come a long way from $11 in February to a peak of $425 in June.

At this point, we can only guess where it might turn around. Technical and fundamental analysis won’t be much help here. We need to think about the psychological levels. Could be that we’ll hold $250 and go straight to the moon from here.

However, we should also be prepared for the possibility of a trip down to $200, $150, or even $100. The best way to prepare for these type of moves is to analyze your portfolio and diversify to the best of your ability.

Wishing you a wondrous day ahead.

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

Past performance is not an indication of future results. All trading carries risk. Only risk capital you’re prepared to lose.

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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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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Altcoins

Trade Recommendation: XMR/BTC Pair Throwback

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The XMR/BTC market (Monero) has been in downtrend on the hourly chart after posting a high of 0.0225 on December 6 and failing to hold critical support at 0.02. It went to as low as 0.0145 on December 8 before respecting RSI at 32 where it established support. The market used the new support level to rally and generate one higher low after the other. It recently attempted to reclaim support at 0.02 but was repelled by bears. Currently, the market is trading around 0.019 levels where it appears to have created another higher low.

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Technical analysis shows a large reversal pattern in the hourly chart that can take the XMR/BTC pair to 0.025. Even though the market failed to breach resistance at 0.02, investors should not see it as a failed breakout. What we’re seeing is a throwback which is a temporary retreat in price. Throwbacks are common in breakout plays and are often seen as a bullish signal. The next time the market attempts to breach 0.02 resistance, it has a much better chance of breaking it with conviction.

The strategy is to buy breakout at 0.02 with immediate stop at 0.0189.

Hourly XMR/BTC Chart on Poloniex

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As of this writing, XMR/BTC is trading at 0.018714 on Poloniex.

Summary of Strategy

Buy: breakout at 0.02

Target: 0.025

Stop: move below 0.0189 after buying breakout at 0.02.

Disclaimer: The writer 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 money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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Altcoins

Trade Recommendation: FCT/BTC Bullish Reversal

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The market reach its all-time high back in June this year when FTC/BTC (Factom) reached 0.01463162. Unfortunately, the pair wasn’t able to sustain its momentum. It created a lower high several days later at 0.01066744 which signalled investors to take profits or cut their losses. As a result, the market tumbled and lost 93.17% in value from its all-time high. Such a tremendous loss would have created an atmosphere of despair in the market. Usually, that’s when the savviest traders come in.

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Technical analysis reveals that the worst is behind the pair. FCT/BTC touched support at 0.001 on the daily chart twice and respected it on both occasions. This is a good indication that the market has found a reliable support level. In addition, hourly chart shows that a large reversal pattern is underway. The pair may have retreated when it nearly touched 0.002, but it generated a new higher low in the process at 0.00156566. The throwback is a bullish signal that enables the pair to gather momentum to break resistance at 0.002.

The strategy is buy on breakout at 0.002. Breach that level and the market reclaims 0.003. Sell that level because it is a strong resistance.

Hourly FCT/BTC Chart on Poloniex

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As of this writing, FCT/BTC is trading at 0.001738 on Poloniex.

Summary of Strategy

Buy: breakout at 0.002

Target: 0.003

Stop: move below 0.0018 after buying breakout at 0.002.  

 

Disclaimer: The writer 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 money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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