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Market Overview

The Future of Crypto

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Hi Everyone,

When the crypto bull market was still in session, the next big thing for Wall Street was set to be Ethereum futures. Now it seems they’re back on the menu.

Futures contracts were originally invented so that farmers and merchants could hedge costs before engaging in a specific venture.

For example, imagine you want to drill oil and you more or less know your production costs but don’t want to take the risk that the price will drop by the time you’ve got the barrels ready for selling. You simply buy a futures contract for oil before embarking on the venture in order to lock in your profits in advance.

As the world goes further towards the tokenization of financial assets, the service of locking in future prices for Bitcoin and Ethereum could become essential for entrepreneurs. So, the CFTC in the United States is now asking the community for help to understand the industry’s needs so that they may accommodate them.

For those of you reading who are familiar with the ins and outs, please feel free to submit your comments to them using this link: https://www.cftc.gov/PressRoom/PressReleases/7855-18

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Stock Rally in Suspect
  • Draghi Day
  • Have we finally found bottom?

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

Traditional Markets

Yesterday’s global stock rally seems to be stalling today. Indices are in the green today but the excitement may be fading. With all the recent comments from economists about how the cycle might soon come to an end or that we could be heading for another crisis, it’s difficult for traders to fully buy into any upward momentum at this time.

Crude oil is also testing the lows at the moment, and if does manage to break below $50 a barrel it could be potentially destabilizing.

European Central Bank Event

By the time you get this, the European Central Bank will probably have concluded their press conference already.

At the moment, expectations are that they will continue to wind down the quantitative easing program or possibly end it all together. Even though interest rates are not expected to rise for another year or more, it seems apparent that the ECB is following in the footsteps of the US Federal Reserve in tightening up monetary policy.

Money has been flowing freely into global markets over the last decade and it’s going to be very interesting to see what happens when that money begins to be tightened once more.

Crypto Floor Possible?

With all the progress in the crypto industry lately, it’s extremely difficult to understand why prices have fallen over the last month.

Here we can see the massive slide down in bitcoin that’s been happening since November 14th. From its all-time high to the new low from last Friday bitcoin has fallen a total of 84%, which is more or less in line with the level of retracements that the asset has seen in previous cycles.

As we have previously discussed when bitcoin broke below the psychological level of $5,000, the current area of support is between $3,000 and $3,500. So we are very much in this area right now.

A breach to the downside could certainly cause further selling and a lower low. However, a strong push upward from these levels could actually serve to shift sentiment and change the trend.

With the high number of short sellers across various exchanges right now, even a small push up could potentially affect a short squeeze in the market. Imagine such a squeeze on the level that would bring us firmly above $5,000. Such a move would very likely be interpreted in hindsight as the capitulation that everyone has been waiting for.

Guess we’ll need to wait and see how it plays out.

Have a lovely day!

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

eToro is a multi-asset platform which offers both investing in stocks and cryptocurrencies, as well as trading CFD assets.

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

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 LinkedInMatiGreenspan |Facebook:MatiGreenspa

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

U.S. Stocks Rise on Solid Bank Earnings; Cryptocurrencies Look for a Catalyst

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U.S. stocks continued higher on Wednesday, with the Dow rising triple digits after a blowout earnings report from Goldman Sachs. Cryptocurrencies were mostly directionless after Ethereum delayed its planned Constantinople upgrade due to security risks.

Stocks Rise

All of Wall Street’s major indexes finished in positive territory. The Dow Jones Industrial Average climbed 141.57 points, or 0.6%, to 24,207.16. The broad S&P 500 Index advanced 0.2% to 2,616.10, with financials leading the way higher. The Nasdaq Composite Index recorded a gain of 0.2% to finish at 7,043.70.

Goldman Sachs Group Inc. (GS) was the Dow’s best performer after reporting much better than expected earnings and revenue for the fourth quarter. The investment bank reported per-share earnings of $6.05 on revenue of $8.08 billion. Analysts had called for an EPS of $4.45 on $7.55 billion in sales.

Bank of America Corp (BAC) also rose after reporting a better than expected quarter. The bank beat expectations on the top and bottom lines and tripled its profit to $7.3 billion.

Brexit Uncertainty

Global financial markets were surprisingly calm in the wake of a devastating Brexit vote for British Prime Minister Theresa May, who failed to pass her proposed legislation on Tuesday. Lawmakers voted overwhelmingly against the proposed Brexit deal, setting the stage for a new round of negotiations with Brussels.

However, some members of British Parliament want Prime Minister May to step down or call a general election. The opposition Labour party pushed for a vote of no-confidence on Wednesday, which if passed, would have set the stage for a general election. The motion was rejected late Wednesday.

Under May’s proposed deal, the United Kingdom would embark on a soft Brexit in roughly two months’ time. It’s not entirely clear whether that timetable is still feasible given the latest setback in parliament.

Day 26 of the Government Shutdown

The longest government shutdown in U.S. history entered its 26th day on Wednesday, fueling uncertainty about the direction of the economy. With roughly 800,000 federal workers affected by the impasse, some analysts are beginning to worry about the potential impact on economic growth.

The latest Quinnipiac poll shows the majority of Republicans still support the shutdown because of its implications on border wall funding. President Donald Trump has been adamant that he will not cave unless Democrats make appropriations for a steel barrier on the U.S.-Mexico border. The president has warned that the shutdown could go on for “months or even years” if Democrats don’t agree to fund the wall.

With no solution in sight, attention has turned to Senate Republicans, some of which have grown frustrated with the shutdown. If enough of them defect, it could force a vote on a new measure to re-open the government.

Ethereum Hard Fork Postponed

The planned implementation of the Constantinople hard fork was delayed on Wednesday after developers identified a major vulnerability in one of the Ethereum Improvement Proposals (IEPs).

Smart contract auditor ChainSecurity on Tuesday uncovered a major issue with EIP 1283, which proposes net gas metering changes for the SSTORE opcode and new uses for contract storage. According to ChainSecurity, implementing the EIP 1283 would give attackers a loophole to steal funds.

The delayed launch of Constantinople was made official on Ethereum’s official Twitter: “Constantinople upgrade is temporarily postponed out of caution following a consensus decision by #Ethereum developers, security professionals and other community members. More information and instructions are below.”

At the time of writing, no alternative timetable has been provided. More on Constantinople: ETH/USD Price Analysis: Ethereum’s “Thirdening” Approaches.

Crypto Markets Gyrate

The cryptocurrency market saw little movement on Wednesday, as bitcoin held within a narrow range and most of the major altcoins exhibited lower volatility. The value of all coins in circulation dipped slightly to $121.6 billion despite the presence of stable volumes.

Bitcoin edged down 0.1% on the day, reaching $3,642.89. The largest cryptocurrency by market cap experienced a large bounce at the beginning of the week but has faced strong resistance near $3,700.

Learn why we believe 2019 could be the year of accumulation for bitcoin.

Ethereum had posted the biggest percentage drop in the top 20 before paring losses later in the session. EH was last down 0.6% at $122.86.

On the opposite side of the spectrum, Cardano gained 4.2% to $0.0445. Binance Coin rose 3% to $6.10. EOS added 1% to $2.43.

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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4.7 stars on average, based on 738 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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Market Overview

Bitcoin in Backwardation (this is fine)

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Bitcoin Options

Hi Everyone,

One of the joys of having a futures market is the ability to understand what investors are thinking about the future of the price. For bitcoin, it doesn’t seem so great at the moment.

As we can see, the contracts for the bitcoin futures on the CBOE are currently in backwardation, meaning that contracts with a later expiration are trading consecutively lower.

Of course, something like this might have made me nervous on a normal day, but then I remembered that oil futures were trading in contango (opposite of backwardation) before the prices collapsed back in October.

Also, the volumes here are kind of silly. I mean, 227 BTC (less than $1 million) trading on a contract that expires today. Sure, the title is catchy but what can we really learn from this?

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Shutdown: Day 26
  • Day’s to Brexit: 72
  • Constantinople Delayed

Please note: All data, figures & graphs are valid as of January 16th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

You may have noticed that we’re now including a countdown to Brexit in the highlights section, right next to the US government shutdown counter. I think they fit together neatly. Two governments descending into a state of turmoil over political wrangling.

Today, Theresa May’s government will see the ultimate test. If she loses the vote of no confidence, the UK heads to new elections… again.

Over in the East, China decided to inject the market with a record level of stimulus. Yesterday’s tax cuts may have been insufficient to maintain growth, so they’ve gone the route of free cash for the market.

In addition, it seems the Institue of International Finance has made a rather shocking estimation. It seems our entire economic system, from our homes to places of work and our governments are increasingly reliant on debt.

Given all the above, it’s no wonder that the European Central Bank is now sounding a new alarm.

Don’t worry about any of this though. The stock markets are up today. Hope the earnings reports from the financial sector go well.

Ethereum Upgrade Delayed

After all the excitement, the crypto community was disappointed to hear last night that the long-awaited Constantinople upgrade has been delayed once again.

It seems a critical bug was found at the last minute and the lead developers pulled the plug. Here we can see the crypto market, led by Ethereum, dropping moments after the announcement was made

We’re seeing a bit of a recovery this morning but that was really scary. I mean, it’s good that they caught the bug before going live but the fact that it came within 30 hours of the upgrade is a bit nervewracking.

These things do happen, virtually all major platforms including Windows, Android, and Apple Operating systems, have seen critical bugs before. Though it would be possible to release a patch, fork the network again, and return to normal, that kind of process could in itself have done irreparable damage.

We hope that Constantinople whenever it is ready, goes through without any additional hitches.

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

eToro is a multi-asset platform which offers both investing in stocks and cryptocurrencies, as well as trading CFD assets.

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

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 LinkedInMatiGreenspan |Facebook:MatiGreen

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

U.S. Stocks Rise on News of China Stimulus; Theresa May’s Brexit Deal Falters in British Parliament

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Wall Street and global stocks bounced back on Tuesday, as investors rallied behind a renewed stimulus push from the Chinese government in the wake of dismal trade figures earlier in the week. Meanwhile, U.K. Prime Minister Theresa May’s proposed Brexit deal was swiftly rejected by British parliament, setting the stage for a tumultuous two months.

Stocks Rally

All of Wall Street’s major indexes bounced back on Tuesday from a slow start to the week. The S&P 500 Index gained 1.1% to 2,610.30, with nine of 11 primary sectors reporting gains. Technology, health care and communication services were the best performers. Surging tech shares lifted the Nasdaq Composite Index to a gain of 1.7%, where it closed at 7,023.84. The Dow Jones Industrial Average advanced 155.75 points or 0.7%, to close at 24,065.59.

European and Asian markets also reported firm gains. The U.K.’s FTSE 100 Index rose 0.6% to 6,895.02. The pan-European Stoxx 600 finished 0.4% higher at 348.71.

Japan’s Nikkei 225 index rose 1% to 20,555.29. Mainland China markets surged 2%, with the CSI 300 Index closing at 3,127.99.

China Pledges More Stimulus

The rally in global stocks on Tuesday was partly owed to a renewed pledge by the Chinese government to stimulate a moribund economy. China’s finance ministry has announced a new plan to cut taxes and increase federal expenditures this year in an attempt to combat weaker growth. Meanwhile, the People’s Bank of China (PBOC) said it will make monetary policy more forward-looking and ensure that markets don’t face a liquidity crunch in the future.

In reality, China’s economic slowdown appears to be inevitable as Beijing shifts from exports and manufacturing toward consumption and services. This generational transition will likely see GDP growth decline further in the coming yeas as China’s middle class continues to grow. However, the presence of asset bubbles and a worsening trade outlook could hasten the decline.

May’s Brexit Deal a No-Go

British lawmakers overwhelmingly rejected Prime Minister Theresa May’s Brexit deal on Tuesday, setting the stage for a political fallout that could threaten the U.K.’s planned exit from the European Union in March.

The Brexit deal was soundly rejected in British parliament by a vote of 432 to 202. The scale of the defeat highlighted the extreme opposition facing the prime minister from both sides of the political divide. By failing to agree on the terms of Brexit, the U.K. faces an uncertain future with respect to the EU.

May still has three options for salvaging an exit agreement: (1) negotiate new terms with the EU and table a slightly different proposal; (2) hold a second referendum; and (3) call a general election.

Since taking over from David Cameron in 2016, May has faced an uphill battle satisfying living up to the hard Brexit mandate while also satisfying the pro-EU opposition. A botched early election in 2017 relegated her party to minority status in Parliament, which further complicated matters.

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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4.7 stars on average, based on 738 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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