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Green but Not Green Enough

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Hi Everyone,

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Forget the Winklevoss twins and their COIN ETF. The CFTC in the USA has just approved the first Bitcoin derivatives trading and clearing platform known as Ledgerx.

By the early Fall, investors in the United States will be able to buy options on Bitcoin and within a few months after, Ethereum.

This is really good news for cryptocurrency traders and investors as it will provide some much needed additional liquidity to this new market.

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@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

More record low volatility

Yellen Tomorrow

OPEC’s Position

Please note: All data, figures & graphs are valid as of July 25th. All trading carries risk. Only risk capital you can afford to lose.

Market Overview

Say it isn’t so…

Stock market volatility hit another all time low.

That’s two days in a row!

Why won’t these equities go??

For the first time ever, here’s the VIX hitting 9.26…

Needless to say, global stocks are mixed with nothing really moving in any specific direction. The direction is coming from the currency markets with the U.S. Dollar getting pummeled.

Here we can see the relative performance since the beginning of the year. Everything is green, except the greenback.

Who can save the poor buck?

While Donald Trump and his family don’t seem to be making any headway on promises to reform health care and cut taxes, there’s something else fundamentally pushing the Dollar down.

Expectations are setting in that the next rate hike from the Fed won’t come until March. And, subsequent hikes don’t even seem to be on anybody’s agenda at this point.

Lately, the Fed has been telling us that by selling off some of their extremely bloated balance sheet they should be able to have the same effect as raising rates.

Tomorrow, Janet Yellen will announce the interest rate decision, which of course is extremely unlikely to be adjusted. Ms. Yellen will not appear in front of the camera and there is no press conference at this meeting.

We may see some muted volume in preparation of her prepared statement, but it’s really hard to imagine volatility going much lower than it already is.

Oil Market

The meeting in Russia yesterday did meet its intended result but not in the way people were expecting. They had dismissed concerns about increased production in Libya and Nigeria by saying that these countries were rapidly reaching max capacity anyway and that capping them is not a priority.

Instead, OPEC decided to reassure the market that they are on top of things by signaling that they have their finger on the pulse, so to speak. They stressed to investors that what they’re doing now should be enough but that if things turn sour and prices drop that they can respond relatively quickly.

This brazen display of confidence did indeed move prices upward by about $1 a barrel. However, the rise yesterday was just shy of covering the previous day’s fall (circled).

Wishing you an amazing trading day ahead.

This content is provided for information and educational purposes only and should not be considered to be a 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.

Featured image from 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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Analysis

Technical Analysis: NEO Jumps as Broad Markets Turns Lower

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As the new waves of regulatory changes keep on hitting the segment, the major cryptocurrencies are mostly lower today. After the major update of Ethereum, and the recent surge in the price of Bitcoin, choppy conditions developed, with no clear short-term trend in most of the coins.

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NEO is the best performing major today, as it surged back to the $30 level after a frustrating period that was dominated by a downward drift.  The coin is now just below the key resistance level, and it could be ready to test the $34 level, with a further target found at $40. The long-term picture still looks positive, with strong support levels at $27 and $25.

NEO/USDT, Daily Chart Analysis

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Ethereum is in a consolidation after the encouraging rally towards the end of last week, while Bitcoin is also correction after its stellar rise. The two largest coins pulled the rest of the majors lower, while Ripple remained very volatile after touching the $0.30 level yesterday, trading below the $0.26 again.

Litecoin, Dash, Monero, and IOTA are all a bit lower today, while Ethereum Classic found some relative strength, although it remains stuck in a declining short-term trend. All in all, the segment is still in a clear uptrend, so let’s see which coins are the most promising regarding the short-term picture.

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Bitcoin

Bitcoin Takes a Breather as Prices Drop Below $5,700

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The world’s most talked about digital currency pulled back early Tuesday, a sign that the latest rally is nearing its end.

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BTC/USD Price Levels

After a positive start to the week, bitcoin prices have reversed back toward $5,600 on Tuesday. The BTC/USD exchange rate opened up a nearly $200 trading range on Tuesday. At press time, the pair was down 1.3% at $5,653. Bitcoin remains in overbought territory, based on the RSI, with underlying momentum maintained.

Bitcoin’s current price level translates into a market cap of roughly $92.7 billion, according to CoinMarketCap. That nearly triples the Ethereum blockchain, which is currently valued at $31.2 billion. When assessed by market cap, bitcoin and Ethereum combined account for more than two-thirds of the cryptocurrency asset class.

The BTC/USD has registered a five-day gain of 15.%, which is equivalent to $772. The pair’s 52-week range is $627.77 – $5,861.15.

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Analysts Struggle to Explain Rally

Analysts and market participants are struggling to explain bitcoin’s latest upsurge. The uptrend seems to have begun around the time of news suggesting Chinese policymakers may soon relax their ban on cryptocurrency. However, this alone doesn’t explain the 18% gain over the past five days.

Another plausible catalyst is the anticipated hard fork of the bitcoin blockchain in November, a plan that would benefit existing holders of the cryptocurrency.

The developers behind the Segwit2x protocol have identified a bitcoin upgrade approximately 90 days after the activation of Segregated Witnesses. The controversial plan, which aims to increase the transaction capacity of the blockchain, will occur at block 494,784.

Bitcoin Gold was also on some traders’ wish list before the blockchain community raised suspicion over the project. Several red flags have been identified by Gert-Jaap Galsbergen, which you can read here.

For now, bitcoin’s bull market appears to be taking a breather. As we’ve seen in recent weeks, it doesn’t take much to stoke investor exuberance in a market that has gained nearly 500% since Jan. 1.

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Analysis

Technical Analysis: Ripple Breaks Out Amid Ethereum Upgrade

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The major cryptocurrencies are on the rise once again today, with Ethereum’s major Byzantium update being in the center of attention. The second largest blockchain network has been updated through a hard fork, as usual, and the successful lock-in led to an initial surge in the price of the ETH token. The digital currency recovered above the $330 level after Sunday’s pull-back, but so far it failed to durably break-out above the prior swing high just above $340.

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With the long-term momentum readings still being neutral, the coin could be on the verge of testing the $380 resistance soon, with the all-time high near $400 being the last major technical obstacle. Below $330 further support is found at $300 and $285.

ETH/USD, Daily Chart Analysis

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Bitcoin is also on the rise after dipping below $5500 during the weekend, and the most valuable coin is joined in the rally by Ripple, which most likely finished its short-term correction and could be ready for another leg higher. The other majors are also generally higher, with NEO and IOTA being ahead of the pack, while the rest of the market trading near unchanged. As the broad rally seems to be well and alive, let’s see how the short-term charts are shaping up.

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