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More & More Money

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With each passing day, it’s getting more and more clear that in a very short time we will be able to completely replace government-issued paper money with something a lot better.

At this point, it’s not a matter of if but when.

Mati Greenspan
eToro, Senior Market Analyst

Please note: All data, figures & graphs are valid as of May 30th. All trading carries risk. Only risk capital you can afford to lose.

Market Overview

The President of the European Central Bank, Mario Draghi, re-affirmed in a speech yesterday that the ECB is not ready to stop their QE program.

The program currently creates €60 Billion every month in order to “prop-up” the European economy. They use the money to buy things like government bonds and company bonds but heaven forfend not to solve the Greek Debt Crisis.

The current program is set to expire in December but it seems that Mr. Draghi is trying to lay the groundwork to keep the printing presses far past this date.

Next Thursday the ECB will hold a press conference where these suspicions should be confirmed or denied.

The Euro has come down against the Dollar since the speech (blue X) but not by much. Overall, the EURUSD is still holding its gains from the French Election (Yellow Circle).

Of course, something far more important will be happening next Thursday in the United Kingdom.

UK Elections

The “debate” last night was fun. Though both sides claimed a win it was clear that Prime Minister May was delivered another huge blow.

In the second segment of the show, Jeremy Paxman gave both candidates a good grilling. For some good fun, you can catch the recording below:

The British Pound had virtually no reaction to this event and generally speaking is showing more resilience to political risk. Brexit has shown us that British Polls simply cannot be trusted, and the Trump-Clinton debates have shown us that these type of debates are not indicative of election wins.

I guess we’ll just need to wait until the results come on Thursday night.

Another Crypto Rip

More and more money is flowing today into cryptocurrencies. This rally is being led strongly by Ethereum.

Out of the $8 Billion market cap that was added to the crypto-world in the last 24 hours…

…half went into Ethereum.

The news that Huobi, one of China’s largest crypto-exchange sites, will be adding Ethereum trading as well as Ether deposits and withdrawals may be one of the leading causes for this move.

The price per coin is now back at all time highs and the sky is again blue.

In the meantime, Bitcoin seems to be stabilizing around $2,300 a coin. Mass adoption in Japan seems to be on-track. However, in India, there’s been a political push against it. Let’s hope that the Prime Minister listens to the people rather than the politicians in this case.

Please note: Due to a local holiday, there will be no daily market update tomorrow. We will be back on Thursday.

Wishing you an amazing day ahead!

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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4.7 stars on average, based on 129 rated postsSenior Market Analyst at Etoro.com.




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  1. alecuk

    May 30, 2017 at 6:15 pm

    Ethereum……to the moon! 😉

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Analysis

Crypto Update: Ripple Leads Selloff After Weekend Consolidation

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Sellers are back in full force in the cryptocurrency segment as Ripple retraced a large chunk of last week’s surge Monday in late trading. The coin dragged the whole market lower, with Bitcoin, Ethereum, and all of the major altcoins registering significant losses. The 5-10% decline and the almost 20% plunge of XRP hurt the total market cap of the coins badly, which fell by more than $15 billion off the weekend levels to around $210 billion.

The fact that most of the coins failed to extend the gains from last week, leaving the bearish long-term technical setups intact, is a negative for the coming weeks, with especially Bitcoin’s relative weakness being worrying for bulls. While there is still hope that a leadership might develop, with the likes of Monero Dash, Stellar, and Ripple being in short-term uptrends, given the long-term segment-wide downtrend, traders should still be cautious with new positions even in the technically stronger coins.

XRP/USDT, 4-Hour Chart Analysis

Ripple has already been testing the $0.42-$0.46 zone as we expected following the quiet weekend period, and volatility is expected to remain elevated, with the steep short-term uptrend line also being found near the current price level. The coin has to hold up above the key zone to confirm a longer-term trend change, but for now, the weakness in the rest of the market makes the move suspicious.

With that in mind, traders should still not enter full positions in the coin, even as the short-term overbought momentum readings are almost cleared. Further support below $0.42 is found near $0.3750 and $0.35, while resistance is ahead near $0.51, $0.54, and $0.57.

BTC/USD, 4-Hour Chart Analysis

Bitcoin fell back below $6500 amid the broad selloff, and the most valuable coin is close to the weak rising short-term trendline yet again. While a short-term sell signal hasn’t been triggered, a sustained move below $6275 would be a bearish sign and would make another test of the key long-term zone near $5850 likely again. Further resistance zones are now ahead near $6750 and $7000 while weaker support is also found near the $6000 price level.

Altcoins Still Mixed but Bulls Need to Show Strength Soon

ETH/USD, 4-Hour Chart Analysis

Ethereum failed to hold above the key $235 support/resistance level after reaching up to the zone near $260 during last week’s rally and the coin is close to triggering another short-term sell signal in our trend model. ETH is trading right at the short-term uptrend line, and with all the major declining trendlines being left intact by the rally, a move towards $200 is likely with a possible test of the bear market low near $170 as well.

LTC/USD, 4-Hour Chart Analysis

Litecoin remained relative weak during the rally, never triggering a buy signal, and the coin is now testing the $0.56 level and the weak short-term uptrend line as well. A clear move below those would mean a sell signal for LTC and with the long-term trend clearly being bearish, a dip below $50 would be likely afterwards. Further support is found near $51, while resistance is ahead near $59 and $64.

While some of the stronger coins are still showing stability as we mentioned above, the relatively weaker currencies haven’t been able to gather strength, and IOTA, NEO, Ethereum Classic, and EOS are still looking negative from a technical perspective.

IOT/USD, 4-Hour Chart Analysis

Although IOTA managed to avoid a test of the August lows, last week’s failed move makes a break below $0.50 likely in the coming weeks, as the steep long-term downtrend remains intact. A quick move above last week’s highs would be a bullish sign, but for now, sellers are still clearly in control of the market.

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 353 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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Analysis

Stocks Pull Back as China Exits Trade Talks

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Global stock markets have spent the better part of the day in the red, although the losses are muted, and markets are slightly choppy before Wednesday’s Fed meeting. China pulled out of the scheduled trade talks with the US following last week’s tariff-escalation and that put pressure on risk assets globally. Chinese and Japanese markets were closed today, and that also attributed to the lower than usual liquidity and trading activity.

Dow 30 Index Futures, 4-Hour Chart Analysis

European Central bank President Mario Draghi warned of a “vigorous” pick-up in inflation, which triggered a selloff in the dollar and bonds across the globe, while putting more pressure on risk assets too. The dollar almost regained all of its losses since Draghi’s speech and with the looming fed decision in mind, further choppy and nervous trading is expected in the Greenback, especially following the recent surge in Treasury yields.

Russell 2000, 4-Hour Chart Analysis

The Dow and the S&P 500 both continued to retreat off last week’s record highs, as Friday’s trend resumed, and despite the bounce in the market leading tech giants, the Nasdaq is also lower. On a negative note, small-caps are trading at a 1-month low, as measured by the Russell 2000, which could mean that the US market might be ready to roll over into a correction.

The main European indices are holding on to most of last week’s gains in the meantime, but only the energy segment is clearly positive today, with the help of the strong rally in the price of crude oil.

Dollar and Euro in Focus Before the FED

EUR/USD, 4-Hour Chart Analysis

The EUR/USD pair will see fireworks for sure this week, and although the pair reached the 1.18 level today, it’s still in a zone with strong resistance and bulls still can’t conclude a successful breakout, with the 1.1675 level still being close form a technical perspective. For now, the short-term uptrend is intact, but a quick move below 1.1750 could mark a reversal.

Emerging market currencies are mixed, with the Turkish Lira trading notably higher thanks to the possible release of Pastor Brunson, who has been a major catalyst for the diplomatic troubles between the US and Turkey. The release of the Pastor could stabilize the currency, but another major global risk-off shift could hurt the vulnerable country again, as yields continue to rise globally.

WTI Crude Oil Futures, 4-Hour Chart Analysis

As Saudi Arabia basically ignored Trump’s call for lower oil prices, the recent strength in the commodity culminated in a break-out to new 10 week highs in the WTI contract, which topped the $72 per barrel level for the first time since early July. Natural gas hit $3, and it is on the verge of breaking out to a new 7-month high too, as the whole energy segment is rallying.

Elsewhere in the commodity segment, the Dollar’s choppy price action led to a mixed picture, with copper pulling back slightly from last week’s highs, while gold is still fighting to stay above the $1200 per ounce level as it has been the case for several weeks now.

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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4.6 stars on average, based on 353 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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Analysis

Crypto Update: Bullish Continuation Patterns for Lisk and Waves

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Last month, we ran a series of articles about altcoins that broke out from patterns that have kept them bearish for most of the year. A few days after the breakouts, rallies faded. It caused many to feel that the breakouts were bull traps. Many of the altcoins we covered showed signs of weakness. Some even went below the price level.

In technical analysis, breakout rallies always fade. Many assets tend to revisit the breakout price level or even breach it. What you need to look for to remain confident in your investments are continuation patterns. These structures would tell you that the pullback is temporary and the uptrend is still intact.

In this article, we look at continuation patterns for Lisk and Waves.

Lisk/Bitcoin Analysis  

The Lisk/Bitcoin pair (LSK/BTC) broke out of a large falling wedge on the daily chart on August 15, 2018. This happened after bulls breached resistance of 0.00046. Because of the breakout, the pair managed to rally to as high as 0.00088636 on August 29. At that level, bottom pickers and breakout traders started to take profits. Consequently, the market pulled back.

Daily chart of LSK/BTC

Now, LSK/BTC dropped to as low as 0.000422 on September 20. As a result, many stop losses were triggered. You can infer this because of the significant rise in volume. However, those who cut their losses were badly whipsawed. The pair closed the day at 0.00051683, which is still a level above the breakout.

Seasoned traders would have instead bought the dip instead of cutting losses. That’s because LSK/BTC is forming a bullish flag on the daily chart. This is a pattern that conveys consolidation in preparation for the next move up. In other words, the market remains bullish. It just needs to establish a new base to keep its ascent sustainable.

Waves/Bitcoin Analysis

The Waves/Bitcoin pair (WAVES/BTC) took out resistance of 0.000286 on August 12, 2018. The price action triggered the breakout from the large falling wedge on the daily and weekly charts. The breakout inspired a rally to 0.000367 on August 13. At this price, the breakout rally faded as many took profits.

As heavy selling commenced, Waves/Bitcoin slid to as low as 0.00029 on September 7. This drop would have made many investors nervous. Fortunately, bulls held their ground. That’s because the market was creating a bullish pennant on the four-hour chart.

WAVES/BTC four-hour chart

After the breakout rally faded, Waves/Bitcoin range traded between 0.000367 and 0.00029. As you can see on the chart, bulls defended 0.00029 multiple times. This was a very encouraging signal. It tells us that participants are buying as close to the breakout as possible. Once the market finally realized this, WAVES/BTC exploded.

Now, WAVES/BTC appears to be in the midst of creating another bullish continuation pattern. It is very likely to explode again soon.

Bottom Line

In technical analysis, breakouts rallies fade more often than not. Many assets tend to revisit the breakout while others go below it. If you want to remain confident in your investments, look for continuation patterns. These structures tell us that the altcoin is consolidating in preparation for the next move up.

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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3.6 stars on average, based on 239 rated postsKiril is a financial professional with 4+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and ETFs, as he does his own crypto research and is the subject matter expert at ETFdb.com. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.




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