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Ether Prices Forge Higher on Derivatives Push as Fears Over Parity Wallet Fade

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Ethereum clocked in at 11-week highs Monday, as investors looked past a botched cyber hack of the Parity Technologies wallet that left $190 million worth of ether frozen.

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ETH/USD Price Levels

Ethereum’s native token touched highs of $373 on Monday, the strongest price level since Sept. 1. At press time, the value of ether was hovering around $370.32.

ETH/USD has gained more than 11% over the past five days, and now finds itself within $25 of all-time highs. Momentum is moving in positive direction, with the Relative Strength Index (RSI) approaching the bulls’ coveted 70 level.

With the latest gain, Ethereum’s market value now stands at $35.3 billion, according to CoinMarketCap. Only bitcoin’s $136 billion exceeds Ethereum in overall market size.

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Ether Derivatives?

The recent uptrend in ether prices has come on the heels of speculation that the cryptocurrency was poised to enter the derivatives market. Bloomberg reported last week that contracts on Ethereum will be offered by an unnamed exchange going by the code word “Virtuoso.” One of the platform’s co-founders is Sunil Hirani, who sold his Creditex Group brokerage to Intercontinental Exchange Inc. in 2008.

Analysts say the potential for ether contracts was inspired in part by an institutional shift toward bitcoin futures. Last month, CME Group Inc. and CBOE Global Markets Inc. announced plans to offer bitcoin futures to institutional traders. The contracts will also have a built-in mechanism to deal with volatility, which has become part and parcel of crypto investing.

Ether responded well to news of bitcoin futures, as prices surged to new record highs. The world’s no. 2 digital currency has added more than 4,000% this year.

Bloomberg reports that Virtuoso will be governed by the U.S. Commodity Futures Trading Commission (CFTC) and marketed to institutional investors and corporations. The platform plans to offer futures, non-deliverable forwards, swaps and forwards by the second quarter of next year.

Parity Wallet

At the time of writing, Parity Technologies has not come up with a fix for the hundreds of millions of dollars worth of ether stuck in its multi-signature wallets. The funds have been in limbo for months after a novice hacker locked people out of their wallets. It has been reported that a total of 587 multi-sig wallets holding 513,774.16 ether tokens have been frozen.

Last week, Parity founder Jutta Steiner said the company was doing everything in its power to retrieve the funds.

The issue only impacts wallets created on or after July 20. Parity continues to examine the issue, and is keeping investors informed in its postmortem blog on the subject. The blog was last updated on Nov. 15.

Regarding blocked funds, the latest blog post issued the following statement:

“We deeply regret the situation and we are working hard on several Ethereum improvement proposals (EIPs), both contributing to previously existing ones and suggesting new ones that have the potential to unblock funds. These improvement proposals will also address general cases of blocked funds.”

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.

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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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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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