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Is Bitcoin a Safe Haven?

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This question keeps coming in crypto articles and communities and I’d like to lay it to bed once and for all.

Safe haven assets are things that tend to go up in value when there is prevalent uncertainty or fear in the world. Gold, Bonds, and the Japanese Yen are all considered Safe Havens.

Bitcoin is not a safe haven asset and bears little or no correlation with other traditional markets at this time. The cryptocurrency markets are still too small to have any effect on other markets.

The entire market cap of all cryptos is now about $100 Billion. To put it in perspective, the market cap of just the S&P 500 in the USA is standing at more than $20 Trillion.

So, the answer is no. Not in a traditional sense anyway. However, the practical use cases in specific countries like Venezuela, Argentina, Zimbabwe, Iran, Iraq, Egypt, and even Russia, that are seeing extreme currency risk proves that bitcoin is an excellent store of value.

So though it does not correlate at the moment, this is a form of digital gold.

-Mati Greenspan
eToro, Senior Market Analyst

 

Please note: All data, figures & graphs are valid as of June 15th. All trading carries risk. Only risk capital you can afford to lose.

Market Overview

The traditional markets went on a wild ride yesterday. There was a big swing down, then a big swing up only to wind up in the same place it started.

Though volatility spiked around the time of the Fed meeting, the VIX volatility index still closed at near record low levels.

As was widely expected by the markets, the Fed did indeed raise their interest rates by 0.25% despite stagnant inflation and wage growth.

The headlines that are saying that Fed has defied inflation but actually what’s happening is that they’re playing a huge game of chicken with the financial markets.

If the Fed blinks at this point or acknowledges that the economy isn’t doing well, it could set the already overvalued stock market for a tumble… and we wouldn’t want that.

What was more important yesterday was the Fed’s aggressive stance in offloading their bloated balance sheet. They have about $4.5 Trillion worth of assets that they purchased during the quantitative easing from 2009 to 2014 that they would like to start selling back to the market by the end of the year.

It’s a move intended to show confidence in the economy.

Greek Meeting Today

It’s the same old story that has been playing out since 2012. Greece currently has more debt than they could ever hope to pay back. They’ve already received two bailouts and they will need a third in order to avoid bankruptcy by next month.

The IMF wants to help but only if the EU is willing to write off some of the unsustainable debt that is choking the Greek economy. Germany is not willing to forget, or forgive and so we have a standoff.

The most likely outcome is that we see some sort of temporary deal to release enough funds to avoid another Euro crisis but a long term solution is still very far away.

Nonetheless, we will keep our eyes on the news as this story has massive market moving potential if anything changes.

Massive Crypto Correction

The cryptocurrency markets are currently seeing the biggest pullback in their short history.

Of the top 100 digital coins, only 3 are in green over the past 24 hours. The entire market has lost about $19 Billion from top to bottom.

Many traders in eToro are seeing this as a golden opportunity.

This remains the most high risk investment you could possibly take and it is possible we could see bitcoin around $1000 again before not too long. However, given the breakthrough in Japan and possibility of the same happening in India, there is a distinct possibility that over the next 24 hours we could see the lowest price that will be in the next 24 years.

Thanks for reading & have an amazing day!

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 (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: Litecoin Leads Pullback in Majors

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The major cryptocurrencies are all lower today following the test of the recent swing highs. Yesterday, the early leader of the current short-term uptrend, Litecoin hit the key $51 resistance, and today the coin pulled back sharply, triggering a broad correction in the segment. The leaders of the rally are all notably lower, but they are still holding on to the bulk of their recent gains, and the rising short-term trendlines are all intact.

From a short-term technical perspective, the current pullback is orderly, and as the coins clear the overbought momentum readings, traders could re-enter smaller, speculative positions with strict risk management rules. The long-term technical picture continues to warrant caution, and bear market rules still apply despite the consolidation of the recent months.

LTC/USD, 4-Hour Chart Analysis

Litecoin’s performance continues to be an important tell for the whole segment, and after yesterday’s downgrade in our trend model, the coin’s pullback is weighing on the whole market today. That said, volume patterns and price action in general, are still in line with a short-term uptrend, and traders could be looking for re-entry points and the overbought momentum readings get cleared.

The key $51 resistance level, which halted yesterday’s move, could be in focus again in the coming days, while a deeper correction could see the test of the $44 level. For now, our trend model remains on a neutral short-term signal, while the long-term signal is still clearly negative, with further support levels found near $44 and $38, and with strong resistance also ahead near the $56 level.

BTC/USD, 4-Hour Chart Analysis

Bitcoin remained within its short-term consolidation pattern, as the $3850 level provided support, so far, during the broad pullback in the segment. The MACD indicator is now pointing to an ongoing short-term correction, but the relatively weak short-term uptrend is still clearly intact.

Traders could hold on to their positions here despite the pullback, as the momentum indicators haven’t reached extreme overbought levels, leaving our trend model on a short-term buy signal, but we would with entering new positions until the pullback runs its course. While the long-term technical outlook is clearly negative for BTC here, a move above the key $4000-$4050 zone could lead to a test of the next major zone near $4450, while support below $3850 is still found near $3600 and just above $3450.

Ethereum and EOS Remain Stable as Ripple Fails to Show Strength

ETH/USD, 4-Hour Chart Analysis

Ethereum continues to trade in a bullish short-term correction pattern near the $145 resistance level. The uptrend is clearly intact in the coin, and although the short-term momentum indicators continue to show overbought readings the rally could soon continue, with the $160 price level still being in sight. Support levels are still found near $130 and $112, while the next major resistance zone is found near $180, and the long-term downtrend is still in no danger here.

EOS/USD, 4-Hour Chart Analysis

EOS, which has also been among the leaders of the rally, continue to show stability amid today’s pullback, but as it got severely overbought during the recent upswing, our tend model is on a neutral signal. Traders should wait for the correction to run its course before re-entering their positions, since the long-term setup in EOS still warrants caution. Support is found near the current price level at $3.80, at $350 and near $3, while resistance is now ahead near $4 and $4.50.

XRP/USDT, 4-Hour Chart Analysis

Ripple remains the primary concern for bulls here, as the relatively weak coin failed to show signs of stability falling back to the vicinity of the $0.32 level. The coin got stuck below the dominant bearish short-term trendline, and our trend model is now on a short-term sell signal, despite the broad rally in the segment.

With the long-term technicals still being hostile even in the case of a new swing low in the coming week, traders should remain cautious with XRP and focus on the stronger currencies with regards to trading positions. Below $0.32, further support zones are found near $0.30, $0.28, and $0.26, while short-term targets are still ahead near $0.3550, and $$0.3750.

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 468 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

Stellar Price Analysis: XLM/USD Bulls Run into Resistance and Profit Taking Following IBM Boost

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  • Stellar’s XLM price was seen cooling in the session on Thursday, as the bulls ran into a barrier of resistance.
  • IBM detailed it has several letters of intent from banks to leverage IBM-Stellar technology.

Stellar’s XLM price has managed to pick itself up from the recent low area, where it was moving within the total abyss. The decent falling for XLM/USD was pushing it into totally unknown territory, where the price has not traded before. A low was produced down at $0.07330000 before the bulls kick-started the recovery. It has now gained a chunky 30% over the last two weeks, with upside momentum particularly gathering decent pace in the past four sessions.

The most recent jump north came following the price escaping a nine-session range-block formation. The low of the mentioned range was observed down at $0.07590000, with the high up at $0.08330000; the bulls forced a breach of this level on 18th February. Upon the move above, a fresh wave of buying pressure came into play, with XLM/USD moving to its highest level in almost four weeks. At the time of writing a pullback can be observed, which could be potential profit-taking after the decent run.

Several Banks to Join IBM’s Stellar-based Service

According to a representative from IBM, several confirmations have been received from banks on their intent to incorporate digital assets, including their own stablecoins via IBM World Wire and Stellar. The head of Blockchain at IBM Jesse Lund said:

“We’ve got a launch announcement coming out soon. We’re going to be supporting more than 50 countries out of the gate, 30-40 currencies, and enough market makers to drag along 30 or 40 banks. So we’ll have a significant portion of the world covered. Our goal is to continue to expand that network and to provide global coverage within 3-5 years where you can actually send remittances in a consistent way, immediately, at a very low cost, from anywhere in the world to anywhere in the world.”

Several banks have confirmed their plans to release digital assets, including their own stablecoins, based on IBM World Wire and Stellar. According to the IBM representative, the company has already received several letters of intent from a number of banks around the world.

Technical Review – XLM/USD

XLM/USD daily chart.

Given the recent price cooling, eyes will be on a possible return down to the breached range-block area. A move as described would complete the technical breakout and retest of the mentioned zone. Should this fail to provide necessary comfort to the falling price, then eyes will be on another test of the low, $0.07330000. If a further breach is observed here, then this opens the door once again to a move within an unknown territory, moving within the abyss.

Looking to the upside, if XLM/USD completes the break retest scenario and the bulls capitalize on this, then a decent push back north may be seen. A near-term supply area tracks above from around $0.09350000 up to $0.0980000. Should the bulls force a break above the mentioned supply, then a retest of the 2019 high area would be eyed. In other words, a move back within the range of $0.13-0.1400000.

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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4.6 stars on average, based on 125 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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Altcoins

Crypto Markets See Modest Pullback on Profit-Taking; Elon Musk Calls Bitcoin “Brilliant”

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The top 20 cryptocurrencies booked modest to sizable losses on Thursday, as investors took profits following an impressive run up in prices at the start of the week. While trade volumes have levelled off from the yearly highs set on Tuesday, they remain well above what’s considered normal in a bear market, leading some to speculate that the current rally still has room to mobilize.

Market Update

All major coins reported losses through the early part of the session on Thursday. Looking at CoinMarketCap, bitcoin’s aggregate price declined 0.5% to $3,961.10. It still hovered north of $4,000 on Bitfinex. More on that story: Bitcoin Runs into Minor Resistance After Setting Fresh Six-Month High.

Ethereum reported a loss of 1% to trade at $146.07. The so-called developer’s cryptocurrency still enjoys strong upside and higher than normal volumes ahead of next week’s highly anticipated Constantinople upgrade.

XRP declined 2.5% to $0.3224, a price point that should keep the sellers at bay. XRP blew past the 30-cent threshold earlier in the week, a level that had provided stern resistance in the past.

EOS dropped 1.8% to trade at $3.77. Even with the decline, EOS is by far the best performing major this week, having gained a whopping 36%.

After an impressive two-week stretch, Litecoin’s price fell back below $50 on Thursday. It was last valued at $49.41, having dropped 3.6%. Litecoin got the crypto recovery started almost two weeks ago. Click here to read more.

Further down the market-cap index, Binance Coin declined 5.8% to $10.34. Bitcoin SV, Monero, Dash and IOTA each fell by at least 2%.

The cryptocurrency market is currently valued at $133.9 billion, down from a high of $136.2 billion earlier in the week. Trade volumes were a healthy $28 billion, far higher than the average seen in the latter half of the bear market.

Elon Musk Praises Bitcoin

Tesla CEO and serial entrepreneur Elon Musk doesn’t hold any cryptocurrencies, but is a firm believer that digital assets are the wave of the future.

Musk, who appeared on the latest episode of ARK Invest’s podcast, said the following: “Paper money is going away and cryptocurrency is a far better way to transfer value than pieces of paper.”

Responding to whether crypto may be useful for Tesla, Musk said:

“I think the Bitcoin structure is quite brilliant. There seems like there is some merit to Ethereum as well, and obviously others. But I’m not sure if it’s a good use of Tesla resources to get involved in cryptos.”

While Elon Musk is just one of many to opine on bitcoin and its potential future, his comments represent an important attitudinal shift on the subject. This shift extends from Wall Street’s upper echelons all the way down to main street. As Hacked reported earlier, millennials and other younger cohorts appear keen on investing in cryptocurrency and are more likely to trust virtual exchanges instead of banks. According to a recent survey by eToro, 43% of millennials have more trust in crypto exchanges than the U.S. stock market.

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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4.7 stars on average, based on 773 rated postsChief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi




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