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Happy Fork Day

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Hi Everybody,

As many of you know, today the Bitcoin scaling debate will run up against a critical deadline.

This is sure to be the most uncertain time in the world of digital currencies and after the astonishing surge in pricing since the beginning of the year and positive legislation for digital assets from several countries, the world is watching.

As it stands, 100% of the mining community is signaling to implement the Segwit protocol and 87% are voting for SegWit2x. Another option that has been gaining momentum is bitcoin cash, which will be attempting to hard fork the network today.

Bitcoin cash is said to have a newer and stronger code than even SegWit2x but the support for it in the mining community is still extremely small. Of course, since bitcoin cash is offering to give 1 BCC for every BTC held in a “supported wallet” the excitement from users has been overwhelming.

Now, nobody really knows how this is all going to play out. What we do know is that many brokers and exchanges including eToro will be halting all transactions within the next few hours for an undetermined period of time until everything is sorted out.

eToro’s downtime will begin today at 11:00 GMT and will last until our experts feel that the network has stabilized.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

Any reaction to N Korea?

USDollar holding support

Forking Brexit (EURGBP)

Please note: All data, figures & graphs are valid as of July 31st. All trading carries risk. Only risk capital you can afford to lose.

Market Overview

With earnings season well under way, traders on Friday have propelled the Dow Jones to a brand new all time record high.

A shakeup in the Trump administration, failed healthcare reform bill, new Russian sanctions, nor a successful missile test from North Korea could bring the stocks down.

There does seem to be a bit of a safety play in the markets this morning though. We can see in the currency markets that the three main safe haven currencies are leading the day so far.

Even the U.S. Dollar, which has been falling nonstop lately, seems to have found some temporary support.

As well, the ultimate safe haven, gold is extending its gains from the past few weeks and is on track for a very strong July.

One thing that may be causing investor optimism is the price of oil, which has reluctantly crossed the $50 mark in the last few minutes.

Soft Brexit Fork

While we wait to see if there will be a hard fork or soft fork in bitcoin, we can see in the U.K. parliament that the notion of a soft Brexit is now in danger of a hard fork.

Prime Minister May’s Tory party is splitting itself in two over what immigration to the U.K. will look like immediately after the Brexit. Chancellor Philip Hammond and his allies are very happy to keep the borders relatively loose, while his opponents argue that an immigrant free Britain was the main driver behind the decision to leave the EU in the first place.

So far, no word from the Prime Minister on this critical issue.

Meanwhile, the Euro strength is overtaking the British Pound and some analysts are forecasting that parity (1.0000) might be in striking distance for the EURGBP.

As always, let me know if you have any questions, comments, or other feedback. Wishing you an amazing week ahead.

This content is provided for information and educational purposes only and should not be considered to be 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 (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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Analysis

Crypto Update: Bear Market Lows in Jeopardy After Latest Failed Bounce

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The cryptocurrency segment switched directions yet again, as, after a weak bounce on Wednesday, the major coins are headed back towards their recent bear market lows today. While the losses are not significant, for now, given the bearish long-term picture and the vicinity of the lows, another leg lower in the downtrend could soon begin, despite the deeply oversold long-term momentum readings.

The majors are all in the red amid the broad selloff and only a few of the battered altcoins are showing some relative strength in the face of the apparent selling pressure. The total value of the market is back below $110 billion, and a dip below the $100 billion mark is possible as soon as the coming days, with Bitcoin being among the weakest top coins in the past few days.

Volatility has been steadily decreasing ever since last week’s breakdown, but we expect trading activity to pick up somewhat ahead of the weekend, and traders should remain cautious here given the still broadly negative technicals.

BTC/USD, 4-Hour Chart Analysis

Bitcoin is trading just above its recent lows despite yesterday’s rally attempt, and the coin is showing relative weakness hinting on an imminent test of the lows. That said, with the long-term momentum readings clearly being oversold, we could still be in for a larger scale bounce in the coming weeks, but traders should wait for signs of short-term strength before entering new positions.

Our trend model remains on sell signals on both time-frames, with strong resistance levels zones ahead near $3600 and between $4000 and $4050, and with key long-term support found near the $3000 level.

ETH/USD, 4-Hour Chart Analysis

Ethereum is still stuck below the key $95-$100 zone as yesterday’s bounce faded but the coin is trading above its bear market low, performing in line with Bitcoin and the majority of the segment. ETH is still in short- and long-term downtrends, and our trend model is on sell signals on both time-frames as well, despite eh oversold long-term picture.

Odds still favor a move towards the next key support zone between $73 and $75, and traders and investors shouldn’t enter positions here, with further strong resistance zones ahead near $120 and $130.

Altcoins Drift Lower Across the Board

IOTA/USD, 4-Hour Chart Analysis

We are still not seeing signs of meaningful relative strength even among the smaller altcoins, as although some of the most oversold currencies are, in fact, holding up well above their recent lows. IOTA is still a prime example of the long-term weakness, as it got stuck below the resistance zone surrounding the $0.24 price level despite the recent bounce attempts, while also remaining in a clear broader downtrend. For now, the prior low just above $0.20 is safe, but new lows are still likely in the coming weeks.

XRP/USDT, 4-Hour Chart Analysis

Ripple has been trading with very low volatility in the last couple of days, hovering around the $0.30 level. The coin failed to show relative strength amid the bounce attempts, and break below last week’s lows and a test of the bear market low near $0.26 still seems likely, with the sell signals being in place in our trend model on both time-frames.  XRP faces strong resistance near $0.32, $0.3550, and $0.3750, while primary support is found at $0.28

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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4.7 stars on average, based on 414 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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Altcoins

Binance Coin Price Analysis: BNB Still in Trouble Despite Recent Strong Fundamental Prospects

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  • BNB/USDT moving within an ascending channel formation, subject to a breakout to the downside.
  • There is much anticipation ahead of Binance’s DEX launch, expected in early 2019.

Binance Coin (BNB) has made a decent recovery since being slammed in November and into the early part of December. The price had initially dropped a whopping 58%, before then being able to stabilize most recently on 7th December. Since, BNB has jumped as much as 20% to the upside, moving within an ascending channel formation. However, despite the gains of late, a similar bounce was initially seen on 25th November to 5th December, before another dump. BNB/USDT had tanked a chunky 35%, after this brief period of stabilization.

Strong Fundamental News Flow

The world’s largest exchange by traded volume will some be launching their own decentralized exchange (DEX), expected for early 2019. There is much excitement and buzz across the social media space for this to go live. The development team have already noted that their BNB will be moving from its ERC-20 token status, which is currently on the Ethereum blockchain. As a result, this will be transferred to their own proprietary blockchain, which is set to be called Binance Chain.

In terms of a decentralized exchange, this technology can facilitate a new type of pair matching, allowing users to be able to place orders in addition to trading cryptocurrencies. This can be done without the need of an intermediary institution, managing the ledger or even controlling the user’s funds.

Elsewhere, Binance recently announced that they will be adding a new feature for the benefit and to attract more institutional investors. They will have the facility to create sub-accounts on the Binance exchange. Finally, the company have also exercised further use of their token, BNB, as these can now be used via Tripio to secure bookings.

Technical Review – BNB

BNB/USDT 4-hour chart

Price action over the past six sessions now is moving within an ascending channel formation. This comes after the decent bounce from the low on 7th December, having dropped to a low of $4.1200. At the time BNB/USDT was very much oversold, dropping to 26 via the RSI on the 4-hour time frame. Technically, such moves are subject to a potential breakout to the downside.

Support Levels

BNB/USDT weekly chart

Near-term support should be noted at $4.8000, which is the lower part of the observed ascending channel. Further south, eyes would be on the 7th December low at $4.1200. BNB/USDT is already trading around the lower levels seen since December 2017. Lastly, should the above-mentioned be breached, then a fall to $3.2500 could be on the cards. This is a weekly support seen for 17th December 2017 week commencing.

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.

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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4.5 stars on average, based on 84 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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Bitcoin

Pessimism Spreads and Blocks Out Opportunities for Bitcoin, Ripple and Ethereum

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  • BTC/USD is in a key technical scenario.
  • The dominant pessimism is likely to turn upside down.
  • ETH/USD rejects leadership again and the market languishes.

The weekend is approaching without significant changes among the main protagonists of the Crypto board. I am reviewing the dominant emotional state in social networks and pessimism rules. The gloom sets an optimal atmosphere for a change in the direction of the market.

Extreme pessimism is the antagonist of the blind euphoria we saw exactly a year ago. This melancholy crushes the psyche of the HOLDers, but should not do so in the minds of traders. For a trader, the direction of the market must be secondary.

This extremely depressing environment covers with anxiety the ability to look at the market and make the right decisions. The task of an analyst is to provide a clear picture of the current scenario that will help investors in the process of managing their portfolios.

Seeking to offer this service, today I will analyze the graphs of Bitcoin, Ripple and Ethereum represented in logarithmic scale. This type of representation helps analyze very volatile assets with wide ranges.

BTC/USD Daily Logarithmic Chart

BTC/USD trades at the price level of $3,362. The price has reached the trend line that governs the movement of the BTC/USD for years, and therefore we are facing a decisive moment. We can see if we review the graph. In recent years the price of Bitcoin has moved below the line on several occasions, to return to rising above it again.

Below the current price, the first support level is at $3,275 (price congestion support and very long-term uptrend line). The second support level is at $3,177 (long-term bearish trend line). The third support level is at $2,890 (price congestion support). Regarding this third level of support, I find it very improbable that it can be reached in the next few days because it would take an extraordinary sales force to break the two intermediate supports.

Above the current price, the first serious resistance level is at $3,925 (price congestion resistance). The second resistance level is at $4,390 (price congestion resistance). The third resistance level is at $4,693 (EMA50), a critical level from which we could start to speak of an upward turn.

The MACD in the daily range shows a perfect profile for an upward movement. After moving to extreme harmful levels, it draws a bullish divergence and crosses over to the upside. It is bullish according to the manuals, but the current situation can generate even more extreme movements.

The DMI in the daily range shows the bulls increasing their activity since the arrival of the price to the current zone. It is, therefore, a shopping area. The bears, on the opposite, should think the same as they have been decreasing their strength to approach the current levels.

XRP/USD Daily Logarithmic Chart

XRP/USD is currently trading at the $0.306 price level after failing to conquer the first resistance level at $0.32 yesterday. After this failed attempt the XRP/USD came down for support at the $0.30 price level and found it. These are now the warning levels for this pair.

Above the current price, the first resistance level is $0.32 (price congestion resistance). The second resistance level is at $0.345 (price congestion resistance). The third resistance level is at $0.370 (price congestion resistance) and is very important if the XRP/USD beats it, which would allow an attack on the EMA50 at $0.394 and enter into a neutral scenario at least.

Below the current price, the first support level is $0.30 (price congestion support). The second support level is $0.271 (price congestion support). The third level of support is at $0.258 (price congestion support and annual lows).

The MACD in the daily range shows such a perfect bullish cross profile that I doubt it can be real and work. It is likely that we will see a downward rejection of this indicator in the next few days.

The DMI in the daily range shows us how neither bulls nor bears have changed their expectations when reaching this price range. The ADX shows a loss of trend strength in the last few sessions.

ETH/USD Daily Logarithmic Chart

The ETH/USD trades at the $89.3 price level. Yesterday it tried to breach the $95 resistance level but failed. The Ethereum has all the attention on it for his condition of the leader in bull markets and his current weakness worries analysts.

Above the current price, the first resistance level is at $95 (price congestion resistance). The second resistance level is at $125 (price congestion resistance). The third resistance level is at $144 (EMA50).

Below the current price, the first support level is at $80.5 (price congestion support). The second support level is at $69 (price congestion support). The third level of support is at $53 (price congestion support).

The MACD in the daily range also shows a bullish manual structure. I am amazed at the clarity of the structure when compared to the perceived pessimistic environment.

The DMI in the daily range shows bulls unconvinced of a possible upward change in the price path. The bears, for their part, have decreased a little in intensity but remain at very high levels.

To sum up the situation, if you have reached these levels without being pushed to sell, there is nothing right now to tell us that this market is irrecoverable — nothing to give us reasonable cause.

If you are thinking about buying, the levels are adequate not for the price but because the loss of any support level can give us the signal to execute stops and conserve capital to enter lower prices if we get to see them.

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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