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Legalize It

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Great news!!!

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Authorities from the new government of South Korea have announced yesterday that they are introducing a framework to regulate and legalize Bitcoin. South Korea has been one of the world’s largest buyers of digital currencies so far this year and this news comes as an extremely pleasant and well-timed surprise for blockchain enthusiasts.

Today, the first 334 stores (of the 260k store deal) in Japan have started to accept the shiny digital asset.

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The government of India is expected to announce their decision on digital currencies later this month and we hope for some more good news.

All these new users are currently threatening to put a strain on the Bitcoin blockchain as it was not built strong enough to facilitate this many transactions. However, the Bitcoin mining community has been working hard to reach a solution and just might be able to pull it off within the next 30 days.

Seemingly unrelated, Goldman Sachs has revised their forecast stating that we could see a huge drop before a major surge all the way up to $4,000 a coin by the end of the year.

Mati Greenspan
eToro, Senior Market Analyst

 

Please note: All data, figures & graphs below are valid as of July 4th. All trading carries risk. Only risk capital you’re prepared to lose.

Market Overview

“For every action, there is an equal and opposite reaction.”

-Sir Isaac Newton

With all the positive updates coming from the South, the situation in North Korea seems to be escalating to a not so positive place. This morning, Kim Jong Un conducted one of the most successful missile tests to date.

The rocket flew for more than 37 minutes before landing approximately 200 miles off the Japanese coast. Here’s a map from CNN.

President Trump was quick to respond with two tweets calling for “a heavy move” from China to “end this nonsense once and for all.”

However, the response from China seemed a bit less urgent and they plan to continue with their strategy to talk Un down.

This is likely to be a very hot topic as leaders from around the world gather this Friday and over the weekend for the G-20 meetings in Hamburg. This convention is set to be the setting for the much awaited and (possibly) the first meeting between Donald Trump and Vladimir Putin.

President Xi Jinping will be meeting with Putin in Moscow today, presumably to align Chinese-Russian relations before the big event. As far as China is concerned relations between the two nations have never been better, while relations with the Trump administration are on an unsustainable path of escalation.

Nasdaq Oops

They’re calling it a glitch.

Last night the Nasdaq accidentally sent out some very sour quotes by mistake.

Shares of Apple, Google, Amazon, Netflix, eBay, Zynga, and more were all showing at exactly $123.47. For some of these companies, the move represented more than 3000% gains, for others a major loss.

These stocks were already under pressure and while these type of mistakes can sometimes happen, it does not instill confidence in markets that many are already calling overvalued.

Just yesterday a legendary investor from Merryl Lynch put out a very bearish post, which was picked up by marketwatch.com with this chart as the centerpiece.

Bucking the Trend

One more giant move that is worth mentioning is the Australian Dollar, which went on a wild ride last night.

Nobody was really expecting the Reserve Bank of Australia to raise their interest rates at their meeting yesterday but they were expecting them to get onboard with the rest of the world’s central banks.

Over the last few weeks, we’ve seen a huge push from the ECB, the BoE, Fed, and others to tighten the money and raise interest rates. It seems they’ve printed enough money since 2009 to last us a very long time. Now it’s time to stop the printing and get back to normal economic policy.

The RBA seems to be having none of that though. While they did change their tone just a bit, they are still erring on the side of caution and would like to see a rise in wages before tightening the belt.

Here we can see the AUDUSD ramping up before the meeting and then selling off promptly after. For upside down currency traders and for carry-traders, this is quite a significant pullback for the high-yielding asset.

As always, please feel free to send me your questions, comments, and feedback. I’m always happy to hear it. 🙂

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 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

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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Altcoins

Trade Recommendation: XMR/BTC Pair Throwback

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The XMR/BTC market (Monero) has been in downtrend on the hourly chart after posting a high of 0.0225 on December 6 and failing to hold critical support at 0.02. It went to as low as 0.0145 on December 8 before respecting RSI at 32 where it established support. The market used the new support level to rally and generate one higher low after the other. It recently attempted to reclaim support at 0.02 but was repelled by bears. Currently, the market is trading around 0.019 levels where it appears to have created another higher low.

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Technical analysis shows a large reversal pattern in the hourly chart that can take the XMR/BTC pair to 0.025. Even though the market failed to breach resistance at 0.02, investors should not see it as a failed breakout. What we’re seeing is a throwback which is a temporary retreat in price. Throwbacks are common in breakout plays and are often seen as a bullish signal. The next time the market attempts to breach 0.02 resistance, it has a much better chance of breaking it with conviction.

The strategy is to buy breakout at 0.02 with immediate stop at 0.0189.

Hourly XMR/BTC Chart on Poloniex

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As of this writing, XMR/BTC is trading at 0.018714 on Poloniex.

Summary of Strategy

Buy: breakout at 0.02

Target: 0.025

Stop: move below 0.0189 after buying breakout at 0.02.

Disclaimer: The writer 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 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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Altcoins

Trade Recommendation: FCT/BTC Bullish Reversal

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The market reach its all-time high back in June this year when FTC/BTC (Factom) reached 0.01463162. Unfortunately, the pair wasn’t able to sustain its momentum. It created a lower high several days later at 0.01066744 which signalled investors to take profits or cut their losses. As a result, the market tumbled and lost 93.17% in value from its all-time high. Such a tremendous loss would have created an atmosphere of despair in the market. Usually, that’s when the savviest traders come in.

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Technical analysis reveals that the worst is behind the pair. FCT/BTC touched support at 0.001 on the daily chart twice and respected it on both occasions. This is a good indication that the market has found a reliable support level. In addition, hourly chart shows that a large reversal pattern is underway. The pair may have retreated when it nearly touched 0.002, but it generated a new higher low in the process at 0.00156566. The throwback is a bullish signal that enables the pair to gather momentum to break resistance at 0.002.

The strategy is buy on breakout at 0.002. Breach that level and the market reclaims 0.003. Sell that level because it is a strong resistance.

Hourly FCT/BTC Chart on Poloniex

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As of this writing, FCT/BTC is trading at 0.001738 on Poloniex.

Summary of Strategy

Buy: breakout at 0.002

Target: 0.003

Stop: move below 0.0018 after buying breakout at 0.002.  

 

Disclaimer: The writer 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 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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