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Bitcoin

She’s Gonna Blow!

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The meteoric rise of bitcoin has accelerated yet again as the world’s number one digital currency broke a new record raising $2299 a coin in a 24-hour window.

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Blogging about the price of bitcoin can be extremely frustrating at times with many articles becoming irrelevant even before they ever get to print. I’ve seen this before myself with several articles I was collaborating on but it seems to be an industry-wide thing.

Imagine, somebody from Reuters worked very hard on this article announcing bitcoin’s rise above $13,000 and within an hour of the time it was published the price had already breached $14,000.

For me, I’ll always do my best to give you the causes behind the moves and whenever I can inform my readers what could likely drive the prices going forward. For all we know, a major pullback or an additional surge may have already happened by the time you read this.

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@MatiGreenspan
eToro, Senior Market Analyst

 

Please note: All data, figures & graphs are valid as of December 7th. All trading carries risk. Only risk capital you’re prepared to lose.

Market Overview

Excitement is hardly the word to use but we’ll go with that for now. Nowhere is it more exciting than in South Korea. At the moment, a single bitcoin on the South korean exchange Bithumb is going for 19,391,000 KRW ($17,645 USD), which is 17% higher than the price listed on eToro at the time of this writing.

Recent estimates state that 21% of all global BTC volume are done in Korean Won. So what makes bitcoin so exciting for Korean traders?

I mean, aside from the same thing that makes it exciting for the rest of us. The idea of replacing our monetary system to be fairer and less reliant on inefficient and at times irresponsible government applies to South Korea even more than the rest of us for two reasons.

One, the obvious, they’re watching what’s happening in North Korea where the government has completely taken over the country. So they have a far fresher perception of what can happen when governments go bad.

Two, after recently going through a political meltdown and ousting the former President Park Geun-Hye, and after watching the CEO of the Samsung go to prison on corruption charges, their faith in the system is currently at a justifiable all time low.

Third, investing in bitcoin requires a certain appetite for risk that isn’t present everywhere but seems to be present just South of Kim Jong Un’s border.

Regulators in South Korea are doing their best to get a handle on the situation but are visibly struggling. They’ve already banned ICOs in September and in the last 24 hours have banned bitcoin futures trading.

Bitcoin futures may be more dangerous than we thought but we’ll explore that in tomorrow’s update before these potentially destructive futures markets hit Wall Street.

Network Status

This week we’ve been talking a lot about blockchain capacity both in Bitcoin and Ethereum. Both blockchains seem to be testing their limits at this moment in time.

The Ethereum network is still being plagued by cats. The overnight sensation of the new viral dApp Crypto-kitties currently accounts for about 20% of the transactions on the network.

Bitcoin on the other hand is becoming a victim of its own success. The number of transactions waiting for confirmation is now at a dangerous high of 136,000.

And the average transaction rate over the last 7 days is now at an all-time high of 4.6 per second.

It’s still possible to speed up transactions on both networks by paying a higher miner fee. However, those paying the regular amount will need to be patient and could experience severe delays.

The good news is, we don’t seem to be at the point where transactions are being rejected on a mass scale. So even though the capacity of the networks and the patience of alternative investors are being tested, we haven’t quite reached any hard limits just yet.

Ethereum founder Vitalik Buterin has been working on the Constantinople upgrade for some time and we hope that it comes through soon. For bitcoin, the problem is a bit messier. The lack of centralized leadership makes it a lot harder for any meaningful solutions. However, some analysts feel that as the SegWit solution is adopted by more miners it should increase the capacity somewhat.

Contrarian Thinking

Many traders like to try and take an opposite view on what’s happening and find the opportunities that may be hiding behind the FOMO.

For example, popular cryptotrader @Liamdavies, who’s made 170% for himself and his 1,437 copiers over the last year, has posted this trading thought on XRP.

For short term traders, finding this type of support line could present an excellent opportunity. To highlight Liam’s point, here’s a chart of XRP from the beginning of the recent boom.

The idea is that an order with a stop loss just under the support line has a lot more to gain if it goes in your favor than it does to lose if it doesn’t. Meaning, if it hits your stop loss, no big deal, it’s a small loss, but if it turns around now, in retrospect it will have been an excellent entry point.

In addition, over the last week the entire market has been dominated by Bitcoin, with BTC taking back a lot of the market share from the other currencies. So, if we do see a pullback in bitcoin for any reason, it may be a good idea to get in on some of the alts.

Let’s have a spectacular 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.

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

Long-Term Cryptocurrency Analysis: Correction Deepens but Leaders Remain Stable

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As the major cryptocurrencies got hit hard this week, losing around 20% on average, the long-term picture in the segment got close to an entry point for investors. The overbought readings that developed during the late-April rally are now cleared and although the short-term trends are still clearly negative, we still expect the coins to resume the recovery. With that in mind, long-term investors could start accumulating the relatively stronger coins.

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On a negative note, even the leaders violated key support levels during this week’s selloff, but the secular long-term trends are not yet in danger. The prior leaders Ethereum, EOS, and IOTA are still in the center of attention, as we expect them to form a bottom soon. Bitcoin and the other relatively weak coins, like Litecoin, Monero, Dash, and NEO are still lagging the form a technical perspective, but they are also well above the support levels that would indicate an end of the secular bull market.

BTC/USD, Daily Chart Analysis

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Bitcoin is below the key $7650-$7800 support level and it remains the biggest drag on the market, despite a brief period of relative strength this week. The upper boundary of the base pattern that we identified in April is found near $6150, with a weaker zone around $6500, and with the short-term trend clearly being negative, the latter might be tested before a bottom forms. Further resistance is ahead at $8400, $8700, and between $9000 and $9200, and traders and investors still shouldn’t enter positions here.

ETH/USD, Daily Chart Analysis

Ethereum is testing the $555-$575 support zone after violating the $625-$645 range, with the declining short-term pattern being intact. A bottom near the $500 would still keep the recovery intact, but the correction low might already be in, and investors could already add to their holdings here. Further resistance zones are ahead between $735 and $780 and near $845, while support is found near $450.

(more…)

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 256 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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Bitcoin

John McAfee Just Made Some Bold Predictions for Bitcoin, Bitcoin Private

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Technologist and crypto bull John McAfee has made a series of eyebrow-raising predictions concerning bitcoin and bitcoin private. While McAfee is no stranger to gutsy calls, his new forecast sees bitcoin prices doubling in a matter of weeks. And yes, the forecast came after the Wednesday price collapse.

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McAfee Raises the Stakes on Bullish Bets

In a Thursday tweet, McAfee predicted the market will “turn” before June 12, which was the original date of the planned summit between U.S. President Donald Trump and Kim Jong-un of North Korea. McAfee’s algorithm expects a Korea deal to get signed on that day even as Trump signaled on Thursday for the cancellation of the meeting.

According to the post, McAfee expects bitcoin to surpass $15,000 in June before dipping again in July. Bitcoin bottomed below $7,300 on Thursday. It was last seen trading at $7,563.

Bitcoin private, the so-called meta currency that ‘merge-forked’ from bitcoin and Zclassic, is expected to hit $200  by the end of July. At the time of writing, BTCP was trading at $25.61, having gained more than 33% over the past 24 hours.

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BTCP entered circulation in early March as a fork from Zclassic, which itself forked from bitcoin. Bitcoin private is therefore seen as a ‘fork of a fork of a fork.’

McAfee also expects EOS to jump to $32 by the end of July from its current level of $12.48. EOS has skyrocketed to the No. 5 spot on the market cap rankings with a total value of $11 billion.

Institutional Demand

Earlier this week, McAfee heralded the arrival of institutional money to the cryptocurrency market, arguing that it will spark the next leg of the rally.

“Institutional investors are preparing to enter the cryptocurrency market with a vengeance” he tweeted Monday. “They are generally long term investors and will be pumping billions into the market. Expect the top ten coins to go through the roof fairly quickly. The bulk of alt coins will soon follow.”

Digital currency exchange Coinbase has expressed the same opinion and has launched a suite of products to ease institutional money’s transition to crypto.

Crypto analyst Tom Lee has also appealed to institutional demand to justify his bullish outlook on bitcoin in the face of multiple declines. In a recent interview with CNBC, Lee said institutional interest in crypto has only just begun and that demand will continue to grow once regulatory uncertainties are ironed out.

Lee maintains a price target of $25,000 for bitcoin.

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 414 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 Plunge Has Not Shaken Tom Lee

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Bitcoin’s latest technical breakdown hasn’t affected Tom Lee’s bullish outlook on the digital currency. The head of research at Fundstrat Global Advisors is standing by his target of $25,000 by year’s end.

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Typical Volatility

In an email conversation with CNBC, Lee said the latest drop in market prices can be attributed to “typical market volatility” rather than any new underlying risks facing digital assets. He also identified three factors that will lead bitcoin to $25,000.

The first factor is cost of production, which Lee identified as anywhere between $6,000 and $8,000 during the most recent slide. This means bitcoin is still worth more than its cost of production.

Growing interest from institutional traders will also keep the market rallying for the foreseeable future. Banks and other financial institutions are still feeling their way into the crypto market and are looking for regulatory guidance on how to move forward.

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In a Tuesday interview with CNBC’s “Futures Now,” Lee issued the following statement:

“I think institutional investors have gained a lot of interest, and they haven’t really come into crypto yet because there is still some regulatory uncertainty. But that sort of ultimate allocation into crypto as an asset class is going to be a powerful reason why bitcoin rallies.”

Lee also reminded investors just how quickly the crypto market can change. A historical analysis reveals that the entirety of bitcoin’s gains in any given year can be attributed to ten days. Without those days, bitcoin values are down 25% annually.

“So as miserable as it feels holding bitcoin at $8,000, the move from $8,000 to $25,000 will happen in a handful of days,” he said.

BTC/USD Price Levels

Bitcoin prices bottomed at $7,289.35 on Thursday, their lowest in about six weeks. The cryptocurrency has declined nearly 10% over the past week.

At last check, BTC/USD had recovered around $7,508 for a total market cap of $128.3 billion. Selling pressure brought more volume to the market, with total turnover in bitcoin approaching $7 billion.

With the latest skid, bitcoin is down more than 40% this year.

The market cap for all cryptocurrencies bottomed at $318.8 billion on Thursday but has since recovered to around $333 billion. The market is down nearly $60 billion from its Sunday high.

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 414 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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