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Bitcoin

Is Bitcoin Stealing Gold’s Luster?

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It may still be too early to gauge Wall Street’s attitude towards bitcoin but so far the sentiment we’re seeing is extreme caution.

Yesterday, the CBOE’s new contracts saw just 411 coins traded, which comes out to about $7.3 Million, or about 0.062% of the total amount traded on the world’s largest exchange sites.

The SEC financial regulator in the United States has now issued a warning on cryptotrading and especially on ICOs saying what most of us in the industry already know. If something looks like a scam and smells like a scam, it probably is one.

Furthermore, by calling something an ICO it does not change the underlying nature of the asset itself. If a company is offering a token that acts as an investment in the success of that company, it still falls under the jurisdiction of the same regulations as any other financial asset.

We can expect them to continue to crack down on specific companies who have intentionally tricked investors in this space as they probably should have been doing right from the start.

In today’s update, I’d like to explore with you the relationship between the world’s newest financial asset and it’s oldest most established store of value. Please keep an open mind as I’d love to hear your opinion after you read it.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

Oil & Ice in London

Bitcoin Replacing Gold?

Some Data and a Question

Please note: All data, figures & graphs are valid as of December 12th. All trading carries risk. Only risk capital you can afford to lose.

Market Overview

Stocks in the United States climbed further yesterday nearing all-time record highs powered by advances in tech stocks and the energy sector.

The UK’s main North Sea pipeline has been shut down for repairs due to a hairline crack and will likely be out of commission for a couple weeks. There’s a yellow weather warning out in London telling residents to prepare for ice.

The combination of greater demand and less supply has sent the price of oil up in the UK but even the West Texas Instruments oil that is traded at eToro is seeing a significant surge toward the highs.

The price of oil has been rising steadily thanks to efforts from OPEC to reduce the global glut. Still uncertain, how US oil producers are going to react to all this.

Stock markets in Asia did not continue New York’s sentiment and the China50 index fell 1.8% today. The European markets are opening just now but looking rather flat.

In addition, we’re seeing a notable risk-on sentiment in the currency markets, with the safe haven’s (USD, JPY), and Euro) down and the risky currencies gaining in comparison.

What about Gold?

Normally, we would look to gold to understand investor attitude towards risk on any given day. After thousands of years of acting as a store of value and a solid place to keep your money in times of crisis, it has forged a sturdy relationship with other assets and served as the main barometer for risk sentiment.

Indeed, with the markets showing risk on today, we do in fact see gold taking a dive. However, what’s more interesting to investors at the moment is gold’s relationship with bitcoin.

An analyst on from ACG on CNBC yesterday made the claim the bitcoin was stealing some of gold’s market share, saying the the crypto-market is now standing at about 23% of the liquid “tradeable” gold in the market.

Seemingly in response, an analyst from Goldman Sachs was quoted in the Financial Times as saying that this is not happening and that the markets remain unconnected.

Let’s take a look at some charts

Over the last few weeks, we can spot a rather clear reverse-correlation between the two assets with the chart creating a rather large X as bitcoin surges and gold declined over the same period.

but the most interesting thing that I’m seeing is actually what’s happened in the last 20 hours or so. Here, take a look at this snapshot.

Of course, it’s a very small amount of data, but at least from 16:00 yesterday afternoon bitcoin and gold are trading in a lockstep mirror image.

Deeper in the data

In eToro, it’s no secret that we’re seeing a lot of new customers mainly thanks to the rise in populist finance surrounding the cryptocurrencies. I’d like to take this opportunity to welcome everybody, I hope you’re enjoying the platform so far. 🙂

After an extensive conversation on the above question with one of our senior officers in the trading department. It seems that what we’re seeing in eToro is actually a trickle-down effect.

Meaning, yes. We’re seeing volumes on bitcoin going through the roof but the volumes on gold are rising as well. Of course, this is only an initial finding and we’ll need to pour into the data a bit further later on, but it seems that the volumes that we’re seeing on gold so far this year have more than doubled what we saw last year.

In comparison, we are also seeing increases in the volumes of Oil and the Euro Vs the US Dollar but the increase on these assets is not as much as the increase that we saw in gold.

This indeed could be a remarkable find in behavioral economics. Similar to when a new Pizza Shop opens up just down the street from an established one. It would seem initially that they would now need to fight over market share but in fact, as the awareness grows so does the hunger for investments and in fact, both end up benefiting as a result.

As this is only my personal view from where I sit. I do believe that this question is more of an emotional one that should be put to the general public and not one to be answered by financial analysts such as myself who may be already stuck in a certain way of thinking.

If you have a moment, please reply on this post either by Email, or with a comment below (depending where you see it), or just tag me on social media with your thoughts and opinions.

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.

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

Long-Term Cryptocurrency Analysis: Bear Market Continues With Major Technical Breakdown

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After months of choppy consolidation, yesterday, we saw the largest move in the cryptocurrency segment since April, which took the majors below key technical levels. Bitcoin’s drop is the most important event, since the most valuable coin violated a structurally important base support for the first time since its historic bull run to $20,000 started.

As we warned repeatedly, the market didn’t show signs of healing during the sideways drift, since no leadership developed, and the coins failed to show follow-through following the, sometimes explosive rally attempts, so our trend model remained overwhelmingly bearish throughout the consolidation.

The top altcoins completed their structural breakdowns well ahead of BTC, and the stability of Bitcoin was the most encouraging sign for crypto-bulls, so now, the broad selloff confirmed the next lower in the bear market.

BTC/USD, Daily Chart Analysis

After violating the primary support at $6275, Bitcoin’s selloff accelerated below the weaker $6000 level and the key zone near $5850 wasn’t enough to support the coin. The structural breakdown will likely lead to a test of the $5000-$5100 zone, while an unlikely recovery would be a very positive development. Primary resistance is now ahead near $5850, while further major support zones are found near $4500 and $3600, and traders and investors still shouldn’t enter new positions here.

ETH/USD, Daily Chart Analysis

Ethereum fell to a marginal new bear market low, outperforming Bitcoin from a short-term technical perspective, but that’s not enough to warrant optimism with regards to the long-term setup. ETH is still in a clear long-term downtrend despite the lengthy consolidation phase, and a test of the $160 level is likely in the coming period.

The coin is still on sell signals on both time-frames in our trend model, and traders and investors should stay away from new positions, with further support found near $130 and with resistance levels ahead near $200 and $235.

(more…)

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 394 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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Bitcoin

Bitcoin’s Double-Digit Loss Has Investors Searching for Answers

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After crashing to its lowest level in over 12 months, bitcoin is showing little signs of recovery Thursday. The 24-hour price ticker continues to show double-digit percentage losses as volumes on virtual exchanges surged.

BTC/USD Update

Bitcoin continues to vary markedly across exchanges, with Coinbase reporting a price-per-coin of $5,439. The San Francisco-based exchange quoted a BTC price of $5,391 earlier in the session.

On Bitfinex, the BTC/USD exchange rate is currently seen hovering just below $5,650. The exchange quoted a daily high of $5,940.

Bitcoin’s average price is reported to be $5,532 on CoinMarketCap, a decline of 12% over the past 24 hours.  Trade volumes across all exchanges surged to $8.3 billion as investors rushed to liquidate their positions.

At the time of writing, virtually all major cryptocurrencies were nursing significant losses with the overall market cap situated below $182 billion. Bitcoin and the broader market are showing little signs of recovery for the time being as investors continue to process Wednesday’s brutal drop.

No Clear Catalyst

There doesn’t appear to be a single known catalyst for the violent market-wide drop experienced on Wednesday. Although volatility in the market was observed prior to the decline, most notably for bitcoin cash and in the rival ABC/SV futures, there was no single event that caused the market to capitulate.

As Hacked previously reported, bitcoin usually exhibits weakness following prolonged periods of narrow trading ranges. A failure to break out of those ranges often invites a wave of selling pressure in subsequent weeks followed by a recovery later on. As a whole, this cycle has kept the bitcoin price elevated above $6,200 in the latter half of the year but upside remained firmly capped below $6,800-$7,000. It was only a few days ago that bitcoin’s 30-day volatility index fell to more than two-year lows.

Although manipulation cannot be ruled out, it’s possible that the latest drop reflects technical re-positioning in the market. It’s also possible that bitcoin cash’s “civil war” had an oversized impact on the broader market as investors await the outcome of the highly contentious software upgrade.

Despite these concerns, bitcoin’s fundamental picture has improved significantly this year as institutions continue to take aim at cryptocurrency. Intercontinental Exchange is set to launch its Bakkt trading platform next month, which offers institutional traders the opportunity to trade physically-backed bitcoin futures products. Meanwhile, VanEck has expressed confidence that its physically-backed bitcoin ETF will gain regulatory approval at some point in the future. The general consensus appears to be that an ETF is coming eventually but not likely in the near term. The U.S. Securities and Exchange Commission is set to deliver a verdict by Dec. 29.

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 664 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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Altcoins

Crypto Market Flash-Dips 12%; Bitcoin Price Hits New Yearly Low as ETH, TRX Bleed Out

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The global cryptocurrency segment experienced a market-wide sell-off on Wednesday afternoon, losing $25 billion, or 12% of the overall market cap.

The bulk of the losses struck in a brief one-hour window, between 15:30 and 16:30 UTC. The sudden flash dip came as a surprise to say the least, and followed this morning’s $7.5 billion sell-off which, without the benefit of foresight, seemed significant at the time.

Just When We Thought We Were Out…

Now the altcoin setup looks radically different, with several coins threatening the yearly lows of August-September once again following an entire quarter of recovery.

All of Bitcoin Cash’s recent gains have disappeared, with BCH sinking 30% in the last week alone, and close to 20% in the last day. The same pattern persists among all the recent market growers, as yet another great correction unfolds.

BTC/USD Hits 13-Month Lows

Bitcoin did however strike new yearly lows, or thirteen-month lows to be precise, after BTC/USD fell to $5,765 – a level not witnessed since October 2017. That puts BTC on 9.8% losses over less than twelve hours, after falling from this morning’s $6,395.

Of Bitcoin’s $6 billion volume at time of writing, you have to look eleven places down the charts to find the first cryptocurrency that BTC has been significantly traded against. The top ten most concentrated trades are all against either fiat currency (USD and KRW), or dollar-pegged stablecoins – specifically Tether (USDT).

Ethereum Sinks Along With Mining Profits

As covered earlier on Hacked, Ethereum’s initial fall below the $200 mark resulted in Ether mining no longer being profitable. However, the $189 price quoted in the article continued to fall further, landing on $179.49 and resulting in a 14.4% crash for Ethereum from last night’s high of $209.78.

That’s still slightly above the $170 valuation recorded during the dip of September this year, and saves ETH from notching up a new yearly low along with BTC.

Tron (TRX) Threatens Yearly Lows

The value of TRX fell 16% from $0.022358 to $0.018757 for Wednesday, pushing the coin closer to the lows of August when TRX hit the eery number of $0.016666 before rebounding.

This time the price rebounded to the $0.019 level, which is a hopeful sign for the altcoin, although TRX losses now stand at 22.5% for the last seven days.

All of the coin growth surrounding BitTorrent, record transaction volumes, coin listings and everything else that came out of Tron HQ in recent months has now effectively been wiped out.

Few coins were spared the bloodletting, and even the stablecoins were shaken by the sudden sell-off as Tether dipped to the $0.97 range once again. Despite the numbers quoted above, the worst of the losses came from the lesser altcoins, with recent gainer Basic Attention Token (BAT) now down more than 40% for the week.

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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4.4 stars on average, based on 89 rated postsGreg Thomson is a full-time crypto writer and digital nomad. He eats ICOs for breakfast and bleeds altcoins. Wherever he lays his public key is his home.




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