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Market Overview

Over-hyped and Underpriced

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The man known as Dr. Doom has once again ruffled some feathers within the crypto-community with some harsh words about bitcoin and blockchain.

Doctor Nouriel Roubini is largely credited with predicting the US Housing Bubble that kicked off the global financial crisis of 2008 and has also expressed very fond opinions of social trading. However, it has recently become clear he is not a fan of cryptocurrencies.

In a report titled The Blockchain Pipe Dream, he points out all of the inefficiencies of the current technology and calls it “the most over-hyped technology of all time.”

Of course, I find the explanation of cryptos provided by John Oliver in this hilarious video more helpful, which though extremely cautionary highlights the advantages as well as the risks.

Notably missing from both reports was details on some of the more exciting projects that are already using blockchain. For example, the Wal Mart blockchain that can track produce across a supply line, or shipping giants like Maersk using blockchain to track their containers. Or Sweden beginning to use a blockchain to manage land ownership. The list goes on things do take off investors still have the opportunity to get in early.

We do need to give the Doctor some credit though and tread cautiously. No matter how excited we get about a specific project investors should remember that in this early stage most of the projects are still experimental, with similar characteristics to start-ups in their early days.

Bitcoin and Ethereum and several other big cryptos have already proven themselves to be useful and present a case that potential investors can consider. However, investors should remember the disclaimers and look to diversify their portfolio across many different assets.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Pickey Pickers
  • Inflation Data
  • Cryptos face Regs

Please note: All data, figures & graphs are valid as of March 13th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Stock traders are becoming ever pickier lately as yesterday’s action clearly demonstrates. The Dow Jones is now suffering from Trump’s proposed metal tariffs, which could weigh down on industrial companies. However, tech stocks, which don’t rely on any sort of imports are flying.

Here we can see the Dow Jones Industrial Average (in white) against the tech-heavy Nasdaq Index (in green) over the last two weeks.

Yesterday ended with record highs for Apple, Microsoft, Square, and Nvidia, but unfortunately, none for Facebook.

Also on the minds of American investors, today will be the special elections in Pennsylvania’s 18th district. The race there is very close and it is seen as a bellwether that could end up having a heavy influence on the national stage come the mid-term elections in November.

However, whoever wins today will only serve until the end end of the year. As both sides have thrown millions of dollars of campaign money into this election, this may be the most over-hyped election the US has seen in a long while.

Inflation Data Today

No matter how big these small elections are, the main focus for traders today will be the CPI inflation data coming out at 12:30 GMT.

Please note: that the USA has shifted their clocks back an hour over the weekend. So for those of us trading from Europe remember that Wall Street’s opening and closing bells are one hour earlier than usual. Europe isn’t set to shift the clock until March 25th and Australia goes at the end of the month.

Last month’s inflation data came out way above analyst’s expectations at 0.5%. Today’s numbers are forecast for a more moderate 0.2% gain.

Any surprise to the upside has the potential to spark a panic in the stock markets because it would raise expectations of Fed tightening.

Crypto Regs in Focus

The prices of all the major coins seem to have stabilized after last week’s sell-off. On the charts, we can see the famous wedge pattern getting ever narrower on many different cryptos.

Here’s Ethereum for example, whose range is now as little as $100 (from $650 to $750).

For now, we watch for updates from the various regulatory bodies around the globe. Even though decentralization is one of the defining points of cryptocurrencies, updates from local regulators, especially in key areas, do have the potential to impact the prices quite significantly.

South Korea for example, seems to have done a complete flip from strongly considering to eliminate ICOs in the country just a few weeks ago, it now seems they are preparing to regulate the market.

Japan on the other hand is getting a bit harsher on cryptos. Even though Bitcoin has been legalized a year ago there, the hack on Coincheck has served as a wake-up call for the community and for regulators.

The Japanese FSA is now cracking down on money laundering and may even be preparing to lead the fight for crypto AML rules at the upcoming G-20 summit.

In the United States, on the other hand, things are still in the exploratory phase. Tomorrow, the House Financial Services Committee will host several insiders from the crypto community to hear their view on the ICO market and how it should be regulated.

What else?

There’s plenty more in the news that can impact the markets today. Specifically, watch out for the strained tensions between the UK and Russia. May dropped more than a few jaws yesterday by claiming that Russia was most likely behind the recent assassination of a former Russian Spy.

She’s given Putin until midnight to comment on the accusation. Something he may or may not do, given that he has his own elections coming up this Sunday.

Also in England, Phillip Hammond will be delivering the Spring Budget at 11:30 in London.

And in the US, it looks like Russia is off the hook for allegedly meddling in the US elections. Special Agent Robert Muller has decided that there’s insufficient evidence that Trump has colluded with Putin to swing the 2016 results. Muller will now focus on other areas of his investigation.

Let’s have an awesome 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. 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

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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Analysis

Pre-Market: Stocks Rebound as Turkish Tensions Ease

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While nothing has been fixed in Turkey overnight with the vague plans announced to fight inflation by the finance minister, global markets rebounded after yesterday’s panicky conditions.US stocks undoubtedly led the way higher yet again, as the Lira, which made it to the mainstream media in the last few days, is up by more than 7%, with the USDT/TRY pair pulling back to 6.50 from a high above 7, and risk-on assets are higher globally, with especially equities staging a rally.

USD/TRY, Daily Chart Analysis

The other emerging market currencies that sold off are also correcting, with the Argentinean Peso, Brazilian Real, and the Russian Ruble all being off their lows. Despite the positive signs today, the underlying trend is still bearish in the FX segment, and the Dollar’s strength doesn’t seem to abate, with short-term Treasury yields also looking stable.

DAX Index, Daily Chart Analysis

While the major European indices are slightly in the green, headed to the closing bell, European banks that are exposed to Turkey are not showing much enthusiasm, and we expect risk-off sentiment to return in the coming days, until meaningful action is taken by the Turkish authorities.

Emerging market currencies are definitely feeling the contagion effects, with the Argentinean Peso, the Brazilian Real, and the Russian Ruble all being down big time in the last few days. So far, the Turkish leadership failed to calm the market, rather they fueled the fire with the aggressive rhetoric, and the seeming ignorance of the basic macro-economic rules.

In economic news, China was all the rage today, and the country that has been targeted by Trump’s tariffs is feeling the pain. It would be foolish to think that the trade war alone is to be blamed for the weaker than expected indicators across the board, but the skirmish between the two mega-powers definitely triggered a slowdown in the credit fueled economy.

Shanghai Composite, Daily Chart Analysis

Industrial production, retail sales, and investments all came in well below the consensus estimates, and with the Shanghai Composite already being in a bear market, and the Chinese Yuan hovering near its 13-month low against the Greenback, all looks set for a harsh awakening in China.

US Still the Island of Caolm

In the US all eyes are on tomorrow’s retail sales report, while today only two less important economic releases came out. The NFIB small business indicator was higher than expected and import prices were unchanged as the Dollar’s rise likely evened out the first effects of the new tariffs.

Nasdaq, 4-Hour Chart Analysis

The Nasdaq rebounded strongly overnight, leading the major indices higher again, and with that it got very close to its all-time high, outperforming the rest of the world by a mile. With powerhouses Apple and Amazon still pushing to new highs, even as more balanced portfolios are left behind, the tech index could set a new record as soon as today, should the otherwise shaky risk-on shift hold.

Copper Futures, 4-Hour Chart Analysis

Commodities are mixed so far today, as copper fell below $2.70 again, as it got hit hard after the Chinese data dump, while oil continued to rally, climbing back above $68 per barrel, with regards to the WTI contract.

Gold also bounced back above $1200, despite the Dollar’s rally against its major peers, and we have to wait and see if the spike below $1200 finally marked the lengthy downtrend in the precious metal.

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 317 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

Reacting to the Buck

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Hi Everyone,

Extreme market action continues. What began earlier this week as a rout in the Turkish Lira has quickly spread throughout all markets and now it seems to be affecting the cryptos as well.

All the major cryptos fell over the last 24 hours. Bitcoin managed to hold the most steady and Ethereum bore the brunt of the selling.

This article on Bloomberg indicates that the reason for this could be that some ICO’s are cashing out.

However, there is a need for further analysis backed up by more in-depth intel before a final conclusion can be drawn.

The reality is that more money is flowing into ICOs than out of them. According to data collected from CoinDesk, $14.3 Billion has been raised so far in 2018. Nearly triple the $5.7 billion raised in 2016 and 2017.

On the ground, we continue to see positive headlines that show a clearly developing crypto industry. So the fact that token prices are falling could very well be a reaction to external factors like the rapidly rising US Dollar, as we’ll explore below.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Volatility is Back
  • Gold < $1200
  • Crypto Reaction

Please note: All data, figures & graphs are valid as of August 14th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Looks like we’re getting a bit of a rebound in the markets today as the markets are mostly reversing many of yesterday’s moves.

Looking at the Lira, it seems we’ve backed slowly away from resistance at 7 Lira to the Dollar (USDTRY). We should be hearing from Turkish officials including Erdogan later today.

Stocks are up across Asia and Europe. All except China who is processing some sour economic data.

No Safety

Perhaps the strangest thing about the current market action is the lack of safe haven sentiment.

We can see clearly that volatility is rising…

Yet, gold and other precious metals continue to fall. Yesterday, Gold dropped below the important level of $1,200 for the first time since January 2017.

This is a rather clear indication that whatever volatility is happening it’s not freaking anybody out.

Crypto Reaction

Though I couldn’t say with absolute certainty that the meltdown in emerging market currencies is what’s getting the crypto market down lately, it is the most likely explanation given the current market conditions

As the United States moves to tighten its economy and avoid strong inflation, they’re taking action that is strengthening the Dollar. Because the US Dollar is the global reserve currency, many smaller economies rely heavily on a stable exchange rate with the greenback.

So too, as the Dollar is being seen as a stable store of value at the moment, there really isn’t much incentive for people to store their money in digital assets.

Still, it does seem that we’re seeing some of the excitement spilling over onto the blockchain. In this chart, we can see the TPS (transactions per second) is rising rapidly over the last few days.

As well, we can see a noticeable spike in exchange volumes during the entire market action yesterday.

Many thanks to you for reading and to everyone sending me your questions, thoughts, feedback, and insight. It’s extremely valuable.

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.

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

Market Update: Stock Volatility Lingers; Ethereum Hits 14-Month Lows

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U.S. stocks declined Monday, as volatility surged to six-week highs in the wake of a diplomatic row between Washington and Turkey that sparked a new all-time low for the lira. Meanwhile, Ethereum saw its price sink to 14-month lows as a battered crypto market struggled to see the light.

Stocks Fall

The S&P 500 Index declined 0.4% to close at 2,821.95, with losses mainly concentrated in energy, materials and financials stocks. The Dow Jones Industrial Average closed down 125,58 points, or 0.5%, at 25,187.56. Dow industrials were down by as much as 150 points earlier. Meanwhile, the technology-driven Nasdaq Composite Index slipped 0.3% to 7,819.71.

A measure of implied volatility known as the CBOE VIX surged to six-week highs Monday, a sign that the equities rally was losing steam. The so-called “fear index” peaked at 15.02 on a scale of 1-100 where 20 represents the historic mean. It would later settle at 14.76 for a gain of 12.2%

Wall Street is coming off a highly volatile Friday session that saw the Turkish lira plunge by as much as 20%. The dollar rose another 9% against the lira on Monday, trading as high s 7.21.

Oil Prices Rocked by Saudi Arabia

U.S. oil prices approached two-month lows on Monday following news that Saudi Arabia has scaled back its crude production in a coordinated effort to boost demand.

The OPEC kingpin reported it had cut its output by an average of 200,000 barrels per day last month. In June, the OPEC cartel agreed to scale back output caps following a year-long recovery in oil prices.

U.S. West Texas Intermediate (WTI) futures traded as low as $65.71 a barrel in New York, which would have marked the lowest settlement since June 21. Prices would later recover at $67.33 a barrel, down 30 cents, or 0.4%.

ICE Brent futures, the international futures benchmark, bottomed at $71.04 a barrel before recovering at $72.74.

Crypto’s New Low

The search for an elusive bottom in crypto prices continued Monday, as Ethereum plunged to its lowest level in over a year.

The ether price bottomed at $284.25, its lowest since June 2017. EOS, XRP and bitcoin cash also declined sharply.

Bitcoin also traded lower on Monday but losses were contained to 1-2%. The leading digital currency consolidated at $6,257, bringing its total market share to 52.3%.

At the time of writing, the combined market value of all cryptocurrencies was $205.3 billion, according to CoinMarketCap. Earlier in the day, coin values fell below $205 billion for the first time in a year.

Investor psychology has been damaged by news that the U.S. Securities and Exchange Commission (SEC) will postpone its ruling on a keenly-awaited bitcoin exchange-traded fund (ETF). The announcement, which was made last Tuesday, has triggered a $50 billion reversal in prices.

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 544 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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