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Market Overview

Line in the Sand

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Hi Everyone,

One of the central developments in crypto over the last year is the interest we’ve seen from large-scale financial institutions looking to get into this space.

Cryptoassets are increasingly being seen as a brand new asset class with significant potential for portfolio managers and financial advisers. However, despite the increased level of access to digital assets, it seems that education among these groups remains low.

In order to get the ball rolling, we’ve put together a paper that looks into the level of crypto knowledge among independent financial advisers and their clients in the UK.

What I found interesting is that clients are seemingly better informed on this subject than the people they’re getting advice from. Here we can see that only 9% of advisors are confident giving advice on cryptos…

Whereas, 26% of their clients have already transacted with them…

To see the full report please visit this link and download the IFA report:

https://www.etoro.com/trading/markets/research/cryptocurrencies/

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Brothers in Oil
  • Dropping on Brexit
  • BCH Hard Fork Explained

Please note: All data, figures & graphs are valid as of 12/11/2018. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Today is Veterans Day in the USA so volumes could get a bit thin. Markets are scheduled to be open but for the short term traders out there you might want to take the day off.

All eyes are on crude oil today. After a deep retracement from the highs, it looks like OPEC, led by Saudi Arabia is stepping in to prop up the prices.

The way down from the top has been a very large swing and the break below the 200 day moving average (blue line) seems to have accelerated the decline.

The Saudis move is a clear indication that they’re willing to defend the floor at $60 a barrel. However, this line in the sand could prove difficult to uphold, especially if they don’t see cooperation from the other producers.

Pound Under Pressure

The British Pound is under immense pressure this morning after some disappointing Brexit news over the weekend.

It seems that Theresa May’s plan to avoid a hard border with Ireland was rejected both by the EU and her own cabinet. The likelihood of a no-deal Brexit has reared its head once more.

Things aren’t looking much prettier on the chart either. The bounce off from resistance last week (purple circle) confirms that we are now in a full-blown descending triangle (yellow lines).

Hard Fork Incoming

It should be clear that as confusing as the Bitcoin Cash hard fork may seem, especially for beginners, it is unlikely to have any significant impact on the broader crypto industry, are very slim. However, this drama is a lot of fun to watch and a great exercise for people to increase their knowledge and understanding of how these things work.

The current fight that’s playing out is between the two main proponents of BCH (Bitcoin Cash) Craig Wright and Roger Ver.

For those of you who are new, Bitcoin Cash forked from Bitcoin on August 1st 2017 and though the proponents claim that this is the real bitcoin, it has failed to gain the widespread adoption that they were hoping for.

This graph from bitinfocharts.com shows the number of active wallets on Bitcoin (BTC) VS those on Bitcoin Cash.

Over the weekend, we’ve seen videos emerging from both Roger Ver and Craig Wright explaining their positions, how this fork came about and what they think will happen next.

Both Roger and Craig are advocating a different version of Bitcoin Cash. The end result will most likely be a split in the network resulting in two different versions of Bitcoin Cash when both upgrades go into effect this Thursday.

For simplicity’s sake ,we’ll call them Bitcoin ABC (Ver’s version) and Bitcoin SV (Wright’s version).

In this video released last week, Ver described Dr. Wright’s behavior as less than professional and even published this letter allegedly sent to him from Craig.

Roger went on to say explain that Craig had yet to explain his position or why he wasn’t happy with the current roadmap.

Yesterday, Craig struck back by going on the record with famous BTC advocate Tone Vays. In the interview, Craig clarified his belief that the Bitcoin ABC version might have elements that some governments will try to block, hence his opposition

Craig then went on to describe his control of most of the network hashrate in BCH, which could give him a clear advantage in the upcoming war.

However, one thing that Dr. Wright failed to mention is the amount of hashpower that is currently allocated to BTC. Crypto miners, for the most part, are not as ideological as Ver and Wright, they’re in it for the profit.

At the moment, BCH is only running about 8% of the total SHA256 hashpower.

This makes it very difficult for people to mine BTC. So it wouldn’t surprise me if some people who are currently mining BTC would switch a small portion of their hash over to Bitcoin ABC or Bitcoin SV, whichever givesthem the best bang for their buck. This might actually be a healthy thing for BTC as well.

Let’s have a great day ahead!

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

eToro is a multi-asset platform which offers both investing in stocks and cryptocurrencies, as well as trading CFD assets.

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.

Best regards,
Mati Greenspan
Senior Market Analyst

Connect with me on….

eToro: @MatiGreenspan | Twitter: @MatiGreenspan | LinkedIn: MatiGreenspan | Facebook:MatiGreenspan

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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Market Overview

The Ghost of Crypto Anarchy

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Hi Everyone,

Today we bid farewell to the Godfather of the Cypherpunk movement, which gave birth to bitcoin.

If you’ve never heard of Tim May (may he rest in peace), I refer you to his words of 1992. This short passage was so ahead of its time that it may as well have been written last Tuesday.

Quick read: The Crypto Anarchist Manifesto

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Sell Off Continued
  • Breakouts Forming
  • Bounce off the Floor

Please note: All data, figures & graphs are valid as of December 18th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

The global sell-off in the stock markets continues. For a brief moment after the bell rang at the New York Stock Exchange, it did seem like there would be some sort of bounce, but by the end of the session, the major indices were back at the lows.

The S&P500 index fell within a single point of its lowest rate this year (yellow line).

The negative sentiment has carried through into Asia, but it seems the Europeans are a bit more optimistic today, especially in Germany where the DAX is in green.

The feeling is that we could be getting some much-needed relief from the US Federal Reserve as they head into their two-day meeting today. So things might calm down as we approach the announcement tomorrow evening.

Breakout Time

Looking at some of the other assets out there, volatility has increased over the past few sessions. Here we can see the VIX Volatility Index making a move to the upside over the last few days along with the selloff in the stocks.

With that, it pays to take a look at the US Dollar, which continues to push the highs with some upward facing consolidation. This will be critical going into the Fed meeting, where they are largely expected to raise rates.

However, since the rate hike is expected to be dovish, we could just as easily see a downward breakout. Watch this space.

Gold is also looking for a breakout of the psychological barrier at $1,250 an ounce.

Ever avantgarde, crude oil has already broken below $50 yesterday, a staunch indication that the oversupply issues aren’t quite behind us.

Just for good measure we’ll add in the USDJPY as well here. Especially if the dovish rate hike does indeed do the Dollar in, and Asian traders look for safety in the Yen, we could see 112.22 give way.

Crypto Bounce Acquired

Yesterday, on the 10th anniversary of Bitcoin’s all-time high, we did manage to see a strong push off the floor. Though it’s not clear what exactly caused the bounce, it does appear to be a short squeeze that took out a few of the high-risk traders. I did put up a few charts on Twitter as it was happening.

Ever since the break below $5,000 we’ve been talking about light support at $3,500 and heavy support at $3,000, so this bounce off the $3,000 level couldn’t be more picture perfect.

The biggest winner emerging from this move was EOS, which rose a total of 29% within a few short hours. Yet still nowhere near its all-time high of $23.33.

Though it is possible that we do continue downward from here, this type of movement is very encouraging for technical analysts and may just end up creating a bottom for this battered market possibly even giving way to a bullish trend in 2019. Who knows… maybe we’ll get a Santa Claus Rally after all.

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

eToro is a multi-asset platform which offers both investing in stocks and cryptocurrencies, as well as trading CFD assets.

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.

Best regards,
Mati Greenspan
Senior Market Analyst

Connect with me on….

eToro: @MatiGreenspan Twitter: @MatiGreenspan LinkedInMatiGreenspan |Facebook:MatiGreens

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 139 rated postsSenior Market Analyst at Etoro.com.




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Analysis

Forex Update: Trump Pressures Fed Ahead of Rate Decision

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Forex Market Snapshot

Asset Current Value Daily Change
EUR/USD 1.1355 0.46%
GBP/USD 1.2629 0.36%
USD/JPY 112.72 -0.57%
AUD/USD 0.7177 0.03%
GOLD 1,250 0.64%
WTI Crude Oil 49.99 -2.38%
BTC/USD 3,543 10.91%

The US Dollar has been at the center of attention again, as the last full trading week of the year started off in a bearish fashion for risk assets. Although we saw a bounce following Theresa May’s statement on the Brexit process regarding a possible vote on the draft plan in January, risk-on currencies and other risk-on assets are clearly under pressure, with the US stock markets challenging their correction lows again, completing the bearish global shift.

The Dollar’s slight dip, which was triggered by another attack by Donald Trump on the Fed’s tightening schedule provided the most action in the otherwise quiet forex segment, with a lot of traders taking a step back before the Fed’s rate decision on Wednesday. The consensus estimate is still a rate hike on the central bank’s meeting, which would be the fourth tightening step this year, but now, the bond market signals no rate hikes next year and in the current cycle.

Technical Analysis

EUR/USD, 4-Hour Chart Analysis

The EUR/USD pair bounced higher in its broader trading range after last week’s bearish close, but it remains well below the key 1.1440 level, and the bearish long-term technical setup is unchanged, eve as the pair held up above the support zone between 1.1275-1.13.

The breakdown from the consolidation pattern has been aborted, and we will likely have to wait until Wednesday for the next meaningful move, but with the period of positive seasonality soon ending for the Euro, odds still favor new lows in January, barring a sharp dovish shift by the Federal Reserve.

USD/JPY, 4-Hour Chart Analysis

The Dollar also lost ground compared to the Japanese Yen, and the safe-haven currency was among the strongest majors especially in the second half of the day, as risk assets decisively turned lower. The USD/JPY pair continues to trade in a broad consolidation pattern, but today’s drop off the 113.50 level could be the start of a broader trend change, with all eyes on the October low near 111.50. Gold’s strength confirms the strong safe-haven flows, which could propel the Yen higher against all of the majors, even the Dollar.

AUD/USD, 4-Hour Chart Analysis

The AUD/USD pair continues to be in an interesting technical setup with a likely move towards the October lows being likely underway. Today, the Aussie has been showing relative weakness due to the risk-off flows, and it’s virtually unchanged against the Greenback, despite the broad dip in the reserve currency.

Wednesday’s Fed decision and Thursday’s Australian Employment Report will likely cause volatile moves in the pair before the holidays, but bears are still clearly in control of the market both short- and long-term, especially given the weakness in Chinese assets.

Gold Futures, 4-Hour Chart Analysis

We have been following the key break-out attempt in gold, and today, the precious metal likely formed a crucial swing low that could propel it to a new swing high, which would signal a likely rally towards the resistance zone near the $1300 level. While a failed break-out attempt is still in the cards, given the bullish fundamentals, and the recent relative strength of gold, odds favor a confirmed trend change and the start of a bullish cycle here.

Key Economic Events Tomorrow

ChartBook

Forex

GBP/USD, 4-Hour Chart Analysis

EUR/GBP, 4-Hour Chart Analysis

EUR/JPY, 4-Hour Chart Analysis

AUD/JPY, 4-Hour Chart Analysis

GBP/JPY, 4-Hour Chart Analysis

USD/CHF, 4-Hour Chart Analysis

USD/CNH, 4-Hour Chart Analysis

Commodities

WTI Crude Oil, 4-Hour Chart Analysis

Copper Futures, 4-Hour Chart Analysis

Major Stock Indices

S&P 500 Futures, 4-Hour Chart Analysis

DAX 30 Index CFD, 4-Hour Chart Analysis

Nikkei 225 Futures, 4-Hour Chart Analysis

Shanghai Composite Index CFD, 4-Hour Chart Analysis

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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4.7 stars on average, based on 420 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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Market Overview

U.S. Stocks Resume Selloff Ahead of Fed; Cryptocurrencies Stage Convincing Rally

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U.S. stocks extended their slide on Monday, with the Nasdaq joining its peers in negative territory for the year as investors turned their attention to the Federal Reserve’s upcoming policy meeting. Cryptocurrency prices rebounded $15 billion from their weekend lows, with bitcoin gaining nearly 10%.

Stock Rout Intensifies

All of Wall Street’s major indexes posted big losses at the start of the week. The Dow Jones Industrial Average, which officially entered correction territory on Friday, fell 507.73 points, or 2.1%, to 23,592.78. The blue-chip index last traded below 24,000 in May.

The much broader S&P 500 Index plunged 2.1% to 2,545.94, its lowest of the year. After a record-setting run in the third quarter, the large-cap index is down more than 12% from its peak and has returned -4.6% in all of 2018.

All 11 primary sectors registered losses, led by real estate, utilities and consumer discretionary shares. Ten of 11 sectors registered losses of 1% or more.

The technology-heavy Nasdaq Composite Index declined 2.3% to 6,753.73, where it joined the Dow and S&P 500 in negative territory for the year.

Small-cap stocks also fell hard on Monday, with the Russell 2000 index approaching bear-market territory. The index fell 2.6% to 1,374.80.

Fed Watch

The Federal Reserve will begin its final policy meeting of the year on Tuesday, with an official interest rate announcement scheduled for the following day. Nearly three-quarters of traders expect the Fed to hike interest rates on Wednesday for the fourth time this year, according to the Fed Fund futures prices.

However, for most traders, the focus is on the official rate statement and quarterly summary of interest-rate expectations. Rising borrowing costs, plunging oil prices and softer economic data have raised concerns that the central bank is raising rates too aggressively. U.S. President Donald Trump has been a vocal opponent of the Fed’s tightening schedule and on Monday tweeted that it was “incredible” policymakers were considering hiking rates again.

The quarterly summary of economic projections on Wednesday will showcase policymakers’ outlook on GDP, inflation and unemployment in 2019 and beyond.

Cryptos Stage Convincing Rally

Cryptocurrency prices rebounded sharply on Monday, as bargain hunters re-entered the market following the latest brush with yearly lows.

The combined cryptocurrency market capitalization reached a high of $115.4 billion, having gained $15 billion from the bear-market low on Saturday. As Hacked reported earlier, EOS was by far the best performer, gaining 23% to $2.40. Stellar XLM, Litecoin, bitcoin cash and XRP each recorded double-digit gains.

Bitcoin, the leading digital currency by market cap, surged 9.9% to $3,597. The bitcoin price briefly traded below $3,200 over the weekend, forming a new bottom with the rest of the market.

It’s not yet clear whether the latest recovery effort represents the end of the downtrend or a period of consolidation before the bears reassert their control. If recent history is any indication, the latter trend is to be likely to prevail for now.

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 703 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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