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Pantera Capital with Perspective on Crypto Crash Despite ‘Further Support Testing’ Ahead

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Yesterday’s crash in the cryptocurrency market may have rocked short-term investors, but for Pantera Capital’s Dan Morehead, it was another opportunity for some perspective. The cryptocurrency markets have shaved $600 billion from their combined value this year, as Bloomberg pointed out, and where we go from here is unclear. The technical signals suggest that more selling could be ahead, while long-term investors like Morehead choose to focus on the positive developments.

Pantera Capital, which boasts more than $700 million in assets under management, dubs itself as the maiden U.S. investment firm to launch a bitcoin investment fund and has been investing in cryptocurrencies for half a decade. The crypto fund has exposure to many high-profile projects, including the likes of Augur, 0x, OmiseGO and more.

Morehead described yesterday’s selling action in response to the delayed decision by the SEC on a bitcoin ETF as an “overreaction” when actually nothing’s changed. “An SEC rejection is the same story we’ve had for five years,” Morehead told CNBC.

As for that perspective, the bitcoin price remains 82% higher than it was a year ago despite shedding more than two-thirds of its value since the December 2017 peak. Morehead previously tilted his hand to Pantera’s bitcoin trading strategy, advising investors to buy when the BTC price dips below the 230-day moving average, hold for one year and then liquidate, which he said historically generates a profit of more than 200%.

But if you ask Fundstrat market technician Robert Sluymer, the technical signals paint a persistently bearish picture. After yesterday’s sell-off, the bitcoin price was trading below its 50-day moving average and at $6,385 it’s not too far from its June low below $6,000.

 

Source: Bloomberg and Bitstamp

Sluymer said in a client letter cited by Bloomberg: “Expect further testing of next support level, starting at $6072 followed by 5775.”

Bitcoin ETF Remains Elusive

Meanwhile, the bitcoin price has refused to trade on the positive industry developments, most notably the Wall Street-backed cryptocurrency trading platform dubbed Bakkt that was announced several days ago. Instead, traders are focused on the likelihood of a U.S. bitcoin ETF, which appears to be shortsighted.

Morehead points out that the last ETF category to earn a certification in 2012 was copper, which has been around for thousands of years. Bitcoin, on the other hand, is “early-stage venture” with a “real-time price,” which Morehead points out makes it unique but not any more special to receive early ETF approval. But next year at this time, Morehead is betting that the bitcoin price “will be much, much higher than it is today.”

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 35 rated postsGerelyn has been covering ICOs and the cryptocurrency market since mid-2017. She's also reported on fintech more broadly in addition to asset management, having previously specialized in institutional investing. She owns some BTC and ETH.




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Altcoins

Waves Coin Spikes 21% Before Levelling Off; Gets Cold Storage Treatment

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Waves is one of the few coins to have marked up clear growth for the day, with a 21% spike coming in the early hours of Monday morning before the price eventually dropped and evened out.

Waves Price Peaks Overnight

Late on Sunday, August 12th, WAVES coins were priced at $1.89 after climbing from a fifteen month low of $1.64 on August 8th. Over the course of the early hours, the coin underwent a 21% surge which carried it to a valuation of $2.30 – a price not seen for almost two weeks.

Over the course of the day a rebound occurred and the price is back down to the $2.00 range. That’s a huge drop over the course of the day, but it still leaves Waves in the green over twenty-four hours, with net gains of around 6%.

Volumes peaked just as the sell off from the $2.30 level finished up, with $22 million WAVES trades passing through the exchanges today. That’s almost a monthly high for the coin, with $23 million only coming once in the last thirty days, on July 18th.

BTC Dominance

Given the relative strength of Bitcoin compared to most popular altcoins today, it’s unsurprising that the most abundant trading pair is WAVES/BTC, with traders taking advantage of the recent year long low that Waves hit on August 8th.

To be precise, the recent low of $1.64 hasn’t been touched since the middle of May, 2017. That’s a 15-month low for Waves, and given the actions of buyers in the last twenty-four hours, it seems to be a valuation deemed worthy of saving. In the short term at least, as evidenced by the 15% sell-off once Waves hit the $2.30 mark earlier this morning.

Cold Storage Treatment

The Waves platform seems to be growing its own fruit after the announced addition of Waves to Cold Storage Coins (CSC) today. CSC is a provider of cold storage ‘coins’ – essentially hardware wallets in the form of metal cryptocurrency coins.

CSC were recently launching their own token on the Waves platform – Organic Token ($ORGT) – when the team decided to give Waves the cold storage treatment. As said Rob Gray, CEO of CSC:

“So, we were working on Organic Token and we realized no one in the cold storage space had stepped up to support Waves.”

Waves marketing head, Phil Eryushev celebrated the development, stating:

“Besides scalability and speed, ease of use has always been among the top priorities for Waves. Solutions provided by Cold Storage Coins will make user experience at our platform even more fascinating.”

Waves recently revamped their DEX – decentralized exchange – and the platform saw an increase in the number of users shortly afterwards. Today the Waves Decentralized Exchange is only the tenth most popular source of WAVES trades, with $314,000 worth emanating from there – around 1.85% of the daily total.

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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4.4 stars on average, based on 36 rated postsGreg Thomson is a full-time crypto writer and digital nomad. He eats ICOs for breakfast and bleeds altcoins. Wherever he lays his public key is his home.




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Altcoins

Crypto Psycho: Fear Could Be Our BFF

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Crypto prices continue to confuse.  For all the logic related to supply and demand, the reality these days continues to be that prices are being determined by emotion.  

The fundamental news these days is mixed. For example, take todays mention of Bitmain, one of the most valuable cryptocurrency companies, is expecting a September filing of an IPO for as much as $18 billion. That would eclipse even Facebook back in 2012.  The buzz swirling around Bitmain is about more than just crypto. Even so, $18 billion makes a loud and positive statement about investor interest.

On the other side of the digital coin, we have declarations from guys like Ken Bianco, who happens to be part of the US Treasury Office of Terrorism and Financial Intelligence.  Last week he spoke in threatening terms of how the US intends to enforce its AML/KYC regulations virtually everywhere in the world. If this sounds a little bit like an infamous German gentleman with an odd looking mustache, you have your history right.

In between these two extremes, of course, there has been lots of information each day that correlates closely with theoretical supply and demand for crypto, none of which has made a bit of difference as crypto prices continue to tumble.

Nevertheless, an objective point of view holds that there is a disconnect between what is happening in reality and crypto prices.

So unlike last year when prices were rising for no other reason than the fear of missing out (FOMO), today they are falling in the face of the fear of losing all (FOLA).  Maybe it’s fear that is the key to the future.

FOLA Could Be Our Friend

On many occasions we have mentioned how important traditional investors have used relative value.  We continue to believe that global stock and bond markets are overvalued using metrics like price earnings ratios and other financial measures.  While quantitatively speaking, this point is absolutely right, it hasn’t resonated. Since the beginning of the year, for example, investors in the Nasdaq Composite has enjoyed a 13% gain.

This gain comes even though Facebook, the fourth biggest stock in the cap-weighted Nasdaq Composite, has been a dud.  By comparison, over the exact time last year investors in the Nasdaq Composite experienced a 12% gain on the way to a bountiful 25% full year return. Overall, these folks have had very little reason to be unhappy, or fearful.

Tipping Point Could Come From Trump

Credit Datatrek for keeping a thumb on the pulse of the outside world.  Here are some insights from a recent poll on the fears of institutional money managers.  The two most important issues in late March were: unpredictable political events in Washington DC and Trade/tariff disagreements between the US and China.  Some 70% of respondents were very concerned or somewhat concerned about these issues.

Since then, things have only become more critical.  Washington’s confrontational foreign relations strategy is shaking global currency exchange markets.  In the last two weeks the Russian Ruble has lost 12% against the US Dollar. At the same time the US Dollar has increased over 40% against the Turkish Lira.  

While it can be argued that Turkey is of little importance to the global monetary system, Russia is not. Turkey plays a key role in the Middle East and any instability in that area is enough to strike investor fear that is reflected in energy, inflation and currency markets.

In earlier times, this scenario pointed investors in the direction of gold.  This is not happening. At the time of this writing, gold had just broken through $1,200 having fallen 8% this year.  In the face of the Turkish situation, this signals a loss in confidence for gold in a region of the world with a historic close connection to the metal.

Only Theory So Far  

Now if a strong correction were to take place in stock prices or an equally strong rally in crypto, there would be evidence of investors taking advantage of the relative value here. Unfortunately, at this moment that is not taking place. Bitcoin prices are down marginally but sellers continue to pound most altcoins. Until this changes, crypto prices are being driven down by FOLA.

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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4.4 stars on average, based on 95 rated postsJames Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.




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Analysis

Crypto Update: Ethereum Plunges Below $300 as Bitcoin Fails at $6500

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Despite a weak bounce during the weekend, the cryptocurrency segment continues to trade under heavy selling pressure, with the top altcoins till underperforming Bitcoin. Ethereum is the most obvious laggard, and it fell below the $300 level today, hitting yet another 9-month low and extending the structural bear market with another swing low.

Almost all of the majors are below or near their recent lows, but Bitcoin continues to show relative strength, and a few of the recently weak coins, notably Monero and Litecoin, are trading slightly above their swing lows. The other most important bearish currency, Ripple is also trading at new lows, and with that in mind, we remain defensive on the coins, as despite the deeply oversold momentum readings, there is still no sign of a developing leadership in the segment.

ETH/USD, 4-Hour Chart Analysis

All eyes are still on Ethereum, as the second largest coin is pushed lower relentlessly ever since its break-down below the $400 level last week. The coin continued to lead the way lower so far today, and with the break below the $300 level, the market cap of Ethereum is now just $30 billion, while the total value of the market is close to $200 billion again. The coin is now just above the $275-$280 support zone and it remains on sell signals on both time-frames, with resistance ahead at $335 and $360.

BTC/USD, 4-Hour Chart Analysis

With still no signs of even a short-term bottom in altcoins, Bitcoin is still the only hope for crypto bulls, as the coin continues to clearly hold above the crucial $5850 level. BTC is also trading above the weekend lows, even though it failed at the $6500 level during the bounce and it is now back below the $6275 support.

While the short-term downtrend is still intact and the sell signal is in place, today’s strength could be a start of a trend change, should the coin maintain its resilience. Further resistance is still ahead at $6750 and $7000, while initial support is at $6000, with the next major support zone below $5850 found between $5000 and $5100.

Sellers Still in Control but First Signs of Exhaustion Appear

LTC/USD, 4-Hour Chart Analysis

Although the bearish trend in altcoins is still very strong, and most of the relatively weak majors are also confirming today’s break-down, Litecoin is slightly outperforming the likes of Dash, NEO, and IOTA. While the current relative stability is still no reason to buy the coin, and the short-term sell signal remains intact, further signs of strength would be positive for the whole segment.

XRP/USDT, 4-Hour Chart Analysis

Ripple’s technical situation is still dire, as the coin failed to hold up above $0.30, with no signs of a bottom despite the strong support in the $0.30-$0.32 zone, and the deeply oversold momentum readings. Also today, XRP plunged below its previous low, and it’s now trading just above $0.28. The next major support zone is found near $0.26, and for the sell signals on both time-frames are intact.

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 316 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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