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Tesla in Space, The Global Market Bounce in Stocks and Cryptos

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Looks like we’re one step closer to life on Mars.

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For those who haven’t seen, Elon Musk’s Space exploration company has just successfully completed the monumental task of launching the most powerful rocket of our generation, the Falcon Heavy.

The first payload of the groundbreaking rocket was one of Musk’s own Tesla Roadsters. Here we can see a dummy driving the hip car as he prepares to leave the vicinity of our planet.

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You can’t buy publicity like this. Or, maybe you can…

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Is the Worst Behind Us?
  • XIV the Anti Volatility
  • Cryptodads are Hodling

Please note: All data, figures & graphs are valid as of February 7th. All trading carries risk. Only risk capital you can afford to lose.

The Global Bounce

After the Dow Jones saw its worst single-day sell-off in history on Monday, it had its best single-day performance in 15 months.

Traders on Wall Street were only too excited to BTFD that they didn’t even wait to see if the drop is over. This is extreme volatility and for short-term traders, it doesn’t get any better than this.

The bond market made a sharp recovery as well but failed to hold on to most of her gains by the end of the day.

We also have a bounce in cryptocurrencies, which syncs almost exactly to a tee with the bounce in the other markets. Here we can see the bottoms of both Bitcoin and the Dow almost at the exact same time.

We probably won’t know if the sell off is over at least until the end of the week. Most likely we can see some consolidation and heavy volatility as the market processes what just happened.

Of course, if things do start to look one-sided during the US session today, feel free to jump right in.

What I would like to see from both crypto and traditional markets is a bit of divergence. I mean, there’s no real reason Ethereum should be hugging Bitcoin like this…

Or that Oil and the USDJPY are swinging together…

Later today we’ll also get the crude oil inventories numbers from the USA, which should shake things up a bit.

Unfortunate Side Effect

One ETF had a particularly bad time over the course of this sell-off.

The XIV was designed to be a way for investors to bet that volatility will remain low. So when it spiked through the roof, the price got hammered…

Trading on this asset has been halted for now and Jim Cramer has a good rant on how this should never have happened.

Very glad that eTorian exposure was particularly low on this asset. Kudos to whoever went short.


Crypto News

There has been a flood of news in the cryptocurrency space over the last few weeks. Sometimes it’s difficult just to keep up. Many thanks to those of you who continue to send me articles and ask my opinion.

The thing is, it’s not always clear from a headline if a bit of news is going to have a positive, negative, or no effect on the price.

Take this headline for example….

It’s full of FUD and light on facts.

The story is that the Indian Finance Minister said that the “government does not consider cryptocurrencies as legal tender.”

Well, that’s true everywhere in the world except Japan. So this isn’t really news. If we dig deeper to get the full picture we should find that India is working hard to set up a real regulatory framework to deal with these assets, which ultimately is a good thing for everyone.

Flipping over to the United States, many were expecting the SEC to bring down the ban hammer on ICOs and cryptos in general but in fact they went the opposite way.

I could not possibly explain it better than this two minute video from the chairman of the CFTC Christopher Giancarlo, my new favorite cryptodad.

Watch the video here: https://www.reddit.com/r/Bitcoin/comments/7vq66y/cryptodads_are_here_to_save_bitcoin/

Wishing you 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. Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.

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

Technical Analysis: Majors Stage Rally but Strong Levels Still Ahead

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The cryptocurrency segment has recovered from a broad correction today in early trading, with the most valuable coins all turning into green during the session, despite the bearish start to the overnight session. With bottom-to-top gains of up to 15%, the rally helped in easing the worries of bulls, especially in the case of the relatively weaker coins.

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Bitcoin and most of the largest altcoins remained stable during the selloff, and BTC recaptured the $10,000 level quickly after trading as low as $9600 overnight. The initial rally topped out near $10,400, and the coin is trading back near the $10,000 level, as the bullish momentum faded away somewhat.

BTC/USD, 4-Hour Chart Analysis

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That said, we expect the uptrend to continue even if the correction could still carry Bitcoin lower. Further strong support is found between $9000 and $9200, while targets are ahead at $11,300, $13,000, and $14,250.

ETH/USD, 4-Hour Chart Analysis

Ethereum showed strength during the bounce again after yesterday, together with the early leaders of the rally, and although the coin dipped below the $845 level in the second half of the session, the signs remain positive for bulls. Support levels are now found at $780, $740, $625 and $575, while resistance is ahead near $910 and $1000.

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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 115 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: Encouraging Bounce before the Weekend

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The correction that started out in the major lagging altcoins and spread to the leaders of the market yesterday is weakening, with a nice rally today in early trading in most of the majors.  Although the segment is not out of the woods just yet, the bullish signs which have been present ever since the lows three weeks ago still persist.

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Bitcoin stayed clear of the key $9000-$9200 support zone, for now at least, which would be an ideal bottom for the correction, but as we noted long-term investors should accumulate the coin during the correction, as the short-term momentum is already back to neutral. The $10,000 level is still in the focus, while the next major resistance is found at $11,300 and the prior rally high near $11,750 is also ahead as an obstacle.

BTC/USD, 4-Hour Chart Analysis

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The early leaders of the rally, Litecoin and Ethereum Classic are once again showing strength and that could signal that the next leg higher already started. That said, with several coins still stuck in broader downtrends, investors should still expect a bumpy road, with the occasional volatile sell-off.

Litecoin got very close to the $180 support that we have been monitoring throughout the correction, but it quickly bounced above the $200 level again, as the broad bounce started after testing the previously dominant declining trendline. So far, the price action in the coin is consistent with a new uptrend and we still expect LTC to lead the market higher.

LTC/USD, 4-Hour Chart Analysis

Ethereum Showing Positive Signs Again

ETH/USD, 4-Hour Chart Analysis

After yesterday’s early signs of relative strength, the second largest coin is now clearly showing evidence of accumulation, as it quickly recovered above the $845 level following the selloff after the US close. The coin established a new support near $780, and as the MACD is close to providing a bullish cross, it might signal the bottom of the correction.

Despite the bullish price action across the board, even in the recently lagging XRP and IOTA, the correction could still continue, but we still advise traders and investors to look for entry points as we expect the recovery to continue, although traders should still use smaller positions in the relatively weaker coins.

Stay tuned for our detailed technical analysis later on today.

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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4.7 stars on average, based on 115 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

Technical Analysis: Correction Continues but Coins Remain Stable

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It’s been another mixed session for cryptocurrency investors as judging by only the price action, the segment suffered losses across the board, but comparing the current sell-off to the January plunge reveals that the majors are much more resilient this time around.

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The largest digital currencies are holding on to most of the gains of the recent weeks, and the price action near the crucial support zones is also encouraging. With all that said, the correction is not over yet, and further losses are still in the cards, but barring a substantial change in price action, the coins will likely continue the rally.

BTC/USD, 4-Hour Chart Analysis

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Bitcoin has been trading around the key $10,000 level all day long, and, so far, a clear break-down has been averted. The short-term momentum indicators are now in neutral territory regarding the most valuable coin, and that could mean that a bottom is close, and investors should already add to their holdings here. Further strong support is found between $9000 and $9200, while targets are ahead at $11,300, $13,000, and $14,250.

XMR/USDT, 4-Hour Chart Analysis

Correlation between the majors has increased during the sell-off, but there are still clear outperformers and laggards, adding to the bullish case. Monero remains among the strongest coins from a technical perspective, trading right at the lower boundary of the bullish consolidation pattern, with the $280 price level holding up for now. The coin faces strong resistance near $300 and $335, but we expect the uptrend to continue with the next target being ahead at $400, while further support is found at $240.

(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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4.7 stars on average, based on 115 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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