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The Only Semblance of Sanity

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So far there’s been virtually no reaction from financial markets to the most recent provocations from North Korea.

On the other hand, the crypto markets are moving a mile a minute on news that is far less apocalyptic.

Looks like most of the volatility traders have already moved over.

@MatiGreenspan
eToro, Senior Market Analyst

Not as It Should

The Yanks have an excuse. Their markets were closed yesterday for a holiday but stocks from the rest of the world are only falling mildly and the China50 is inexplicably high.

This isn’t exactly what you’d expect after a 6.3 magnitude nuclear test by the world’s most unstable country followed by taunts from said country’s leader that he can pretty much blow up any city in the world.

The US Dollar traditionally acts as a safe haven in panicked markets. So watching the US Dollar fall over the past few months as all of this drama has been building up is quite puzzling.

The only semblance of sanity is coming from the world’s original form of money.

Gold has been rising steadily higher since the beginning of the year and over the last few days has been pushing new highs.

Of course, some are arguing that even this move is unconnected to Un and that Gold is simply following a bigger picture, long term cycle.

The following long term (close to 40 years back) analysis was recently posted by @Dawespoint on Twitter.

It seems that investors simply don’t believe Kim’s claims. Either that, or they are ready to act only if things escalate further. This, of course, begs the question, what would have to happen to illicit a reaction from the financial markets?

Well, let’s hope we never find out. But one thing that could be a good signal is the Korean markets. South Korea has been dealing with their northern neighbor for decades so they might be the first to react when and if anything really hits the fan.

For the time being the KRW is remarkably stable…

Thought KOSPI has shown some signs of weakness in the past few weeks, it’s far from any sort of panic reaction.

So what is moving?

The Crypto markets are!

Due to the nature of this new asset class volatility in this market has been steadily extreme since mid-December.

About 24 hours, the People’s Bank of China announced that they are putting a ban on all ICO activity effective immediately. Meaning, that Chinese citizens will no longer be able to take place in the multi-billion Dollar industry of creating new crypto currencies.

Our Market Analyst in China had this to say…

“This is a good thing, which means the development of Crypto has aroused great attention of the Chinese government.
At the same time, many ICO projects from China are filled with high risks such as Ponzi scheme. Ban ICO is the right decision for Chinese financial security.

I believe that soon the Chinese government will accelerate the regulation of ICO, and protect the real ICO.”

@Macygogogo
eToro, China Analyst

So let’s tally up the damage…

The world’s favorite cryptocurrency bitcoin has seen prices coming down from its all time high of $5000 on Friday almost touching $4000 this morning. A pullback of approximately 20%.

For Ethereum, which many of the ICOs are done on, the damage was more severe. On Friday (white circle), Ether prices were trying hard to break the $400 resistance point. The prices this morning are almost 30% lower.

To be completely fair, the cryptos were already in a pullback a good 24 hours before the China regulatory news even broke but there’s no doubt that this particular headline convinced some traders to sell.

Of course, there’s no indication that the pullback is completely over yet but some of our larger clients have already begun buying in lightly at the discounted prices, ready to go in more heavily should things come down further.

Let’s have an amazing day!!

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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4.7 stars on average, based on 138 rated postsSenior Market Analyst at Etoro.com.




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EOS Price Analysis: Cardano Founder Charles Hoskinson Warns of Regulatory Action Against EOS

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  • Charles Hoskinson projects some form of action from the SEC on EOS.
  • EOS/USD enjoys a relief rally on Wednesday, as price moves further north following recent bounce.

The EOS price hasn’t done much but decline of late. Back in August, EOS/USD entered into a very stubborn narrowing range. The price had been confined within this mode of trading right up until November. The range was seen from the $6 territory down $4 area. On the 19th November, EOS/USD bears had finally pushed for a breakout to the downside, from this mentioned range-block. Following this fall, the price plummeted over 60%, over the course of 3 weeks.

Cardano Founder Hoskinson Expresses EOS Regulatory Concerns

The Cardano (ADA) founder, Charles Hoskinson, has beliefs that EOS chief developer of the network is likely to face strong action from regulatory bodies. The SEC would be a potential regulator that investigates their $4bln ICO, as he has described as “egregious.”

Speaking at a press conference in Edinburgh, Charles Hoskinson has made a projection that the Securities and Exchange Commission will look at taking firm measures against Block.One. He believes that this would be done due to the way it had run and hosted the EOS ICO.  Hoskinson further detailed how the EOS token sale sits within the remit of the regulators for them to review the potential for harm of retail investors in the United States.

Charles Hoskinson Anticipating SEC Action on EOS

Hoskinson predicted that the SEC will likely bring punitive measures against Block.One for the way it ran the EOS Initial Coin Offering. The IOHK leader explained that EOS’ token sale falls well within the regulator’s remit to take action against any financial activity which harms US retail investors.

There were several fundamental issues with the EOS ICO, which clearly raise red flags, from Hoskinson’s view. He expressed for particular focus on the amount they had raised over the course of a year, in addition to their “utter lack of respect” for investors. Hoskinson said, the SEC “needed” to take action.

Technical Review – EOS/USD

EOS/USD daily chart

Most recently, the price has managed to stabilize, which could be due to sellers exhaustion. A bounce was seen on 7th December, after falling to a low of around $1.55. The bulls are attempting to make a convincing push back into the $2 territory. Demand in the near-term should now be observed from that recent low, $1.55 up to $1.80.

It is interesting to note the area of which EOS/USD received some comfort on 7th December (this is a known acting support). Back in November 2017 during the big bull run, the price consolidated within the mentioned demand zone for a brief period. This came before continuing its strong move to the north.

Downside Observations

EOS/USD daily chart

Should the near-term area of support fail to hold, then there could be some devastating moves to the downside. A breach of the $1 mark could very well be seen. The next major demand area will be within the depths of $0.90 region. EOS/USD had last traded down here again within the early part of Nov 2017 bull run.

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 79 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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Cryptocurrencies

What Investors Should Know About Gulden

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Despite Bitcoin’s widespread reputation, it isn’t used by the common man. Many cryptocurrencies have popped up that aim to address this, but Gulden does this in a unique way. Rather than being purely “technological” in their innovations, they are target Holland and doing their best to remain Dutch-centric.

Introducing Gulden

Gulden (NLG) is the name of the now defunct Dutch currency, and bears a sense of pride and familiarity with natives of the Netherlands. Rijk Plasman is the founder of Gulden and the difference between Gulden and other cryptocurrencies is well-illustrated by the fact he is a UX designer first and foremost.

Gulden can be viewed as trying to answer the everyday payment problems we face, rather than just targeting the geeks who are looking for an elegant, but difficult to apply, solution.

There are several key technological differences between Gulden and Bitcoin (the coin it is meant to be an innovation on. On its most basic level, it has two main differences. First, the block reward never halves, which changes the incentives for miners considerably. Additionally, the supply isn’t as limited as Bitcoin’s, because the goal is to serve the Dutch people. Mr. Plasman hopes to have the Gulden and Euro reach parity in a few years, which is aided by these tokenomics.

One of the core problems Gulden solves that plays well to its goal of being more “for the people” is its vertical integration. Bitcoin is mostly a barebones program that required other companies to build wallet and trading solutions on top of the protocol, but Gulden has this all packaged into one solution. There is an iOs and Android application in circulation, and the creators proudly declare that “no manual is required” to use it.

Vertical integration could be considered a plus or a minus. Although it makes it easier for crypto-noobies to use, it also limits innovation and transparency. However, it could prove to be a very helpful aspect when marketing towards the Dutch people.

Thinking about cryptocurrency on a geographical level rather than trying to build a “new global payment system” is a perverse form of innovation in the blockchain space. Most companies are aiming for largest scale possible, whereas Gulden is very geographically focused.

Gulden’s Unique Existence

Up till now, we have seen some countries (such as Canada) propose the idea of an electronic currency, but those would be run by the government, which defeats the political and ideological reasons some people are for these cryptocurrencies. Gulden is the first mainstream cryptocurrency that is geographically targeted in this way, so it will be interesting to see what happens.

Currently ranked #215 in terms of market capitalization, NLG should be notable to traders right now because of how it is correlated to certain currencies. Over the last month, it has traded relatively even with USD, while appreciating against BTC. This is likely due to its use case being viewed as a replacement to Bitcoin rather than being purely dependent on it.

Gulden is tradeable on Bittrex and has been showing a clear uptrend against Bitcoin over the last month. Volume has remained relatively stable, but if it were to kick in, we could see Gulden take off. Even with a potential dip in the future, this could be a good buy as a hedge against 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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Stellar Price Analysis: XLM/USD on the Road to Losing the $0.10 Mark; Coinbase Can’t Save XLM for Now

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  • XLM bears are pressing hard for a drop below the big $0.10 mark, as markets remains down across the board.
  • There could be room for another 8% price drop if support is broken, looking via the XLM/BTC chart view.

Stellar’s XLM is subject to giving up the big $0.10 level. Across the board there have been a several key psychological price breaks. Cryptocurrencies are being forced to give way, due to strength of the current bear market. When prices drop below these closely looked at levels, it only seems to spark further worry and panic. A fresh wave of selling pressure is then invited. Over the past five weeks, XLM/USD has fallen a chunky 63%, from the $0.29 territory, down to a recent low of $0.1010.

Consolidation Mode – Bears Rubbing Paws Together

XLM/USD daily chart

Over the past four sessions, there has been some stabilization following the deep push on 6th December, where XLM/USD fell to $0.1010. The price is moving within consolidation mode, something that is seen across the market. Technically, this only spells more danger – a calm before the storm potentially for cryptocurrencies. This type of behavior has been seen over and over again during this aggressively stubborn downward trend.

What if $0.10 is Breached?

As noted on numerous occasions, this move is uncharted territory already, falling from the heights seen at the start of the year. Market participants are already fueled with a serious amount of FUD, so such technical breaks will only cause more damage. This isn’t due to anything fundamental relating to the Stellar foundation, as their developments continue to remain very much sound and strong. One must gauge how further this can fall, via XLM/BTC chart view.

Technical Review – XLM/BTC

XLM/BTC daily chart

XLM/BTC continues to flirt with a critical area of support, and a failure to hold will be catastrophic. This zone held in the most recent fall on 7th December; despite the long lower wick below, the price still managed to close above. XLM/BTC has not been and closed below 0.000035 territory since September 19th. Should a breach occur, which if the current pace of momentum maintains its course could very well happen, another 8% drop may follow.

Lastly, it is worth keeping an eye out of the potential formation of a head and shoulder pattern. The left shoulder and head have been crafted via XLM/BTC daily chart. There is certainly a possibility that the bulls come back to life, forcing a bounce at the above-mentioned support. A right shoulder could then move towards heights back within the $0.00004000-4500 range. This is where the next major of supply can be observed.

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 79 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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