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Cryptocurrencies

Markets of Magic & Faith

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Hi Everybody,

The world of cryptocurrencies has never been more exciting. What we’re witnessing now with the new bitcoin spinoff is nothing less than value creation by magic and faith.

The new currency goes by many names. The official name is Bitcoin Cash and some brokers are listing it as BCC and some BCH. It’s also received the nickname Bcash. Personally, I think BitCash would be very fitting.

Whatever you call it, the value of this new network has gone from 0 to more than $12 Billion, back to $5 Billion, and now floating somewhere in the middle.

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Any asset is worth exactly what somebody is willing to pay for it. For now, people are willing to pay about $473 per coin, which some are seeing as a discount to what the original BTC is trading for.

However, even though the market is giving it a suddenly high valuation, the mining community is reluctant to turn over their hashpower. This is far from over.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

Overboard on Russia

Ripple by volume

BoE Today!

Please note: All data, figures & graphs are valid as of August 3rd. All trading carries risk. Only risk capital you’re prepared to lose.

Market Overview

With a huff and a grunt and many verbal complaints, President Trump signed some new sanctions against Russia.

Pressure was mounting from other branches of the U.S. government to punish Russia for their alleged interference in Trump’s election. This concession to Congress is quite significant and could possibly provide a turning point for this administration and increase faith in the President.

The new sanctions were controversial not just at home. European officials were pretty ticked off that the USA is acting without their consent nor concern for their interests. After all, they’re a lot closer physically and it does seem that these sanctions can have an adverse effect on oil supplies, which Merkel is currently trying to get from Putin.

The U.S. Dollar has gained some ground against the Ruble lately but the reaction to these new sanctions has been a bit dull. If the USDRUB breaks above 61 it would certainly be significant.

Meanwhile, the investigation into whether Trump was part of Russia’s plot to make him president is gathering strength. Special prosecutor Robert Mueller is not only building a case. he’s currently building a dream team.

The Trends…

…are strong. The Dow Jones reached a new all time high yesterday topping 22,000 points for the first time. The U.S. Dollar fell further and the Euro is flying off the charts.

Cryptocurrencies are rather flat. Other than the addition of BitCash the market is rather stable.

So let’s take a look at our latest addition to the platform and see how she’s going…

The Ripple Affect

(Link to Liam’s comment on eToro)

As can be expected, the community here in the world’s most awesome social investment platform has embraced the new digital asset.

These astonishing numbers can be seen at: https://www.etoro.com/markets/xrp

and, just for you, I’ve obtained a special graph from our Trading Room that shows the volume on the platform since opening.

The Main Event

For Forex traders, this fundamental setup is as good as it gets…

Last time the Bank of England met, Governor Mark Carney was staunchly opposed to any type of adjustment in interest rates. Since then he’s done an apparent 180 and has recently come out in support of raising the rates.

Currently, the BoE is offering just 0.25% interest on deposits. This was adjusted down from 0.5% in the wake of the Brexit as an emergency measure.

The impact of a rate increase on financial markets is usually so great that the Bank of England is not likely to make an adjustment today. The shock would be too great and could lead to economic instability. Especially, after the signals from last meeting.

However, many analysts and traders are expecting the Mark to make his new views policy today and signal that a rate increase will be coming soon.

No matter what the announcement is, expectations are high in both directions and large positions will be placed. Virtually all the major players will have their finger on the trigger and scope set to GBPUSD at high noon London time.

Let’s hope for some of that Carney Magic!

Have a wonderful day 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: Coins Pop Higher as Consolidation Continues

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Trading activity increased in the major coins today, amid a mixed news flow, and for now, bulls scored a small victory following last week’s bearish price action. Bitcoin, Ethereum and most of the largest digital currencies gained several percents, despite the weekend’s deterioration, and although the technical setup didn’t change significantly, an immediate breakdown has been averted.

The discouraging BIS report that has been making waves today wasn’t enough to push the coins below support, but for now, the short-term strength left the trading range intact with the primary resistance levels still keeping a lid on prices. Given the uncertain long-term picture, the coming weeks will be crucial for the largest coins and the whole segment alike, with Bitcoin being in the center of attention after its long period of relative weakness.

BTC/USD, 4-Hour Chart Analysis

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Bitcoin held up above the April low, despite the bearish short-term picture, and the coin the highest price level in a week, breaching the $6750 level in the process. While the most valuable coin fared relatively well today, it clearly remains a laggard from a broader perspective, and it is still trading in a declining short-term trend, with several strong resistance levels just ahead.

The $5850 is the key from a long-term perspective, with further support levels at $6500 and $6275 and resistance ahead at $7000 and $7350.

Bearish Rotation Among Altcoins

ETH/USD, 4-Hour Chart Analysis

On a negative note, the leaders of the latest rally were among the weaker coins today, and that is a sign of bearish rotation in a segment, and until major resistance levels are broken traders shouldn’t enter new positions here. Ethereum managed to rally above $500 yet again, but it remained below week’s bounce high, leaving the trading range intact, while the declining short-term trend is also still dominant.  Strong resistance is still ahead between $555 and $575, while support below $500 is found at $450, $400, and $380.

EOS/USD, 4-Hour Chart Analysis

EOS, which is one of the strongest majors technically speaking also edged higher today, but it remains stuck in the declining short-term pattern, and below key support/resistance zone near $12. The coin is well below last week’s high and until a confirmed short-term trend change, traders shouldn’t enter positions here.

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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4.6 stars on average, based on 277 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

New York Approval of Crypto Trading App Ignites Price Rally for Bitcoin, Altcoins

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The cryptocurrency market on Monday added $13 billion in the span of one hour after New York’s Department of Financial Services granted Square a digital currency license.

Square Cash App Approved for BitLicense

San Francisco-based startup Square, Inc. announced Monday it has been granted approval by New York regulators to launch its cryptocurrency trading platform in the state. The new crypto service will be offered through Square’s Cash app, which has seven million monthly active users, based on the company’s first-quarter earnings call.

The announcement was confirmed by Square in conjunction with an official press release issued by New York’s Department of Financial Services (DFS).

“DFS is pleased to approve Square’s application and welcomes them to New York’s expanding and well-regulated virtual currency market.,” Superintendent Maria Vullo said in a statement. “DFS continues to work in support of a vibrant and competitive virtual currency market that connects and empowers New Yorkers in a global marketplace while ensuring strong state-regulatory oversight is in place.”

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Bitcoin buying launched for Cash users last fall; by January, most users had access to crypto trading platform. Square announced in March it would seek a BitLicense to bring bitcoin trading to the nation’s second-most populous state.

Cash App has reportedly generated $34 million in profit through its bitcoin trading service.

Bitcoin, Cryptos Pop

Cryptocurrencies added roughly $13 billion in value between 12:22 UTC and 13:27 UTC, bringing the total market cap to $289.5 billion. Total trading volumes spiked by more than $1.5 billion over the same period.

At press time, the total value of all cryptos in circulation was $287.1 billion, according to CoinMarketCap. That represents a gain of about $23 billion from last week’s bear market low.

Bitcoin reached a high of $6,781.14 following the Square Cash announcement. It was last seen trading around $6,716, according to BarCart data.

The largest cryptocurrency by capitalization showed signs of breaking down earlier in the day as prices approached $6,300 on the major exchanges. BTC/USD was little changed over the weekend as the bulls failed to extend last week’s modest relief rally.

Despite the latest gain, bitcoin remains about 10% lower for June and is down more than 50% year-to-date.

As an asset class, altcoins rose more than $8 billion Monday afternoon. At $172.2 billion, digital currencies outside of bitcoin represent 60% of the total market.

All coins within the top-ten reported gains. Percentage-wise, Tron was the best performer, rallying 5.4% to $0.045. Ethereum jumped 3.4% to $517.46. Bitcoin cash added nearly 4% to trade at $884.28.

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 456 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Bitcoin

Bitcoin’s Stalled Recovery Keeps the Bulls in Check

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The bitcoin recovery engine stalled on Monday, setting the stage for a possible price reversal that mirrors last week’s 70-day low. With the total market cap so low, a decline in bitcoin would almost assuredly lead to a similar correction for other cryptocurrencies.

Bitcoin Price Levels

Bitcoin prices reached a low of $6,335.77 on Monday, as bearish pressure continued to undermine last week’s modest recovery. Bitcoin rallied to a high around $6,700 last Thursday shortly after bottoming near $6,100.

The cryptocurrency later recovered around $6,660A7 but remains in a bearish pattern going all the way back to June 9. BTC/USD is down roughly $1,000 over that stretch. Price action over the past 24 hours suggests that a further breakdown is probable.

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The cryptocurrency market cap reached a high of $284 billion on Monday. Bitcoin and altcoins exhibited price stability over the weekend as trading volumes continued to plummet.

Depressed Market

As we reported this weekend, cryptocurrencies have witnessed a steady decline in trading volume that could make the market more prone to volatility. Daily trade volumes bottomed near $9.5 billion Sunday, the lowest in over two months. Volumes are down a staggering 80% since the market peaked in early January.

The absence of new money paints the picture of a depressed market in need of direction. With organic searches for “bitcoin” and “cryptocurrency” the lowest in around nine months, a large influx of new retail traders is highly unlikely.

Exchanges such as Coinbase are betting big that the next major catalyst will come not from retail traders, but large institutions. To help make that a reality, Coinbase has launched a new crypto-custody service targeting bitcoin whales. According to crypto hedge fund manager Kyle Samani, regulated custody services are the game changer that will attract institutional-scale capital.

“There are a lot of investors where custodianship was the final barrier,” Samani told Bloomberg in a phone interview. “Over the next year, the market will come to recognize that custodianship is a solved problem. This will unlock a big wave of capital.”

Coinbase isn’t the only organization vying to become a qualified custodian. Goldman-backed Circle and BiGo have also been in negotiation with regulators on the matter. Earlier this year, investment bank Nomura Holdings joined forces with two cryptocurrency firms to create a custody consortium. Bloomberg reports that at least three Wall Street custodians – Bank of New York Mellon Corp., JPMorgan Chase & Co. and Northern Trust Corp. – are exploring cryptocurrency custody services.

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 456 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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