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Ethereum

Time for an Upgrade

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This week we saw a massive surge in bitcoin that simply dominated the entire cryptocurrency market.

Today, it seems we’re experiencing a bit of a pullback. The is quite normal of course. Any asset that can surge 62% in a week and a half should also expect a sizeable retracement after such a run.

The odd thing is that while bitcoin was rising it seemed to be taking some of the value from elsewhere in the market and other cryptocurrencies fell. Now that we’re seeing bitcoin fall back it’s a bit strange that the other cryptos are falling with it.

The total market cap of all cryptos reached a new all time high yesterday of $140 Billion but has since lost $10 Billion of that back.

Something exciting could be right around the corner of this market but not for Bitcoin. As we’ll see below of of BTCs strongest peers may be about to get a huge boost.

@MatiGreenspan
eToro, Senior Market Analyst

 

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

Market Overview

Some up, some down, but nothing really moving far or fast in the stock market. Volatility is down from the highs we experienced at the beginning of the week but thankfully has not yet fallen to the record lows that we saw last month.

Moves in the currency markets have been a bit more telling with the US Dollar emerging as the underdog that has finally pulled off a sorely needed surprise victory.

The Dollar has been getting Bucked around since the beginning of the year but so far in August is managing some gains.

For now, support at 92 points on the US Dollar Index is holding well.

Oil also has found some temporary support. $47 has held nicely after Monday’s sell off. Today’s inventories announcement could play a key role in the next movement. We could be in for a bit of a battle at $48 though.

It seems that both bulls and bears could find this spot an attractive entry. As we can see in this chart, we’re very close to the top of the long term downward channel (yellow lines) but now sitting on the short term rising support line (blue). Let’s see how this plays out.

Ethereum About to Upgrade

With all the excitement around Bitcoin leading up to August 1st and since then Ethereum has kind of been kicked to the backburner of alternative investors minds.

The many proposed upgrades to the bitcoin network have certainly been controversial but Ethereum’s upgrades usually have a lot more consensus. Ethereum’s founder Vitalik Buterin holds a great influence over the ETH community and so it makes it easier for everyone to get on the same page once he’s given consent.

The new upgrade is called Metropolis and it will go into affect in the next few months.

Some of the features that we’re excited about are the ability to send transactions without revealing the senders address making for anonymous transactions. As well as allowing contracts to pay their own gas, a feature that will allow users to interact with an Ethereum based coin without actually having ETH in their wallet.

Metropolis will also reduce the reward for miners, which is a particularly potential price moving factor.

Ethereum has been rather stagnant lately so we’re very curious to see how the price will react as we near the implementation.

Wishing you an awesome 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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4 Comments

4 Comments

  1. FalconX

    August 16, 2017 at 10:15 am

    I am curious to know how will the lower miner rewards effect the overall price of ETH?

    • Mati Greenspan

      August 17, 2017 at 9:17 am

      It changes incentives for mining as well as influencing supply and demand. How it will affect is not so clear cut but I’m reasonably sure that it will have an affect, especially over time.

  2. tieuthanhliem

    August 16, 2017 at 10:46 am

    When the update happen? I found some information that it will happen in 2018

  3. Mati Greenspan

    August 17, 2017 at 9:18 am

    I saw a post on reddit that said 40 days but wasn’t able to confirm. If you can find out I would be very grateful.

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Analysis

Crypto Update: Technical Setup Unchanged Despite Encouraging Rally

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Cryptocurrency bulls could breathe a sigh of relief on Monday as the secular uptrend in the most valuable coin got saved yet again, as BTC rallied above $6500 for the first time in a week after a low-volume consolidation period just above the $6000 level. All of the majors joined the rally as correlations remain very high in the segment, and the market recovered 10% on average with the total market cap of the coins getting back to $275 billion.

Despite the rally, the top coins are still stuck under key resistance levels, as the recent swing highs are still above the current prices and from a short-term standpoint, the downtrend is still intact. Until a move above the crucial levels, traders should still stay away from opening new positions, as odds continue to favor another test of the June lows.

That said, given the still intact long-term bullish setups in the most important digital currencies and the very negative sentiment that developed thanks to the long declining trend, a short-term trend change could be ahead. A bullish leadership is still yet to form, although Bitcoin’s short-term relative strength is a positive sign.

BTC/USD, 4-Hour Chart Analysis

In BTC’s market, all eyes are once again on the $6750-$7000 zone that has capped the really attempts for a month now, and below that zone, the largest coin remains on a short-term sell signal. As the coin didn’t hit a lower low, a bullish pattern could form in the coming weeks, but until it remains in the current trading range, traders shouldn’t enter the market. Support above the long-term $5850 level is found at $6500, $6275, and $6000 while further resistance is ahead at $7350.

Altcoins Slightly Lagging Behind Amid Broad Rally

LTC/USD, 4-Hour Chart Analysis

The major altcoins are in very similar short-term technical setups, thanks to the strong correlation between the coins, and the most bearish coins, like Litecoin, NEO, Monero, and Dash are still below the key support levels that they violated in June. While the previous lows held up this weekend, investors should still remain defensive with regards to the relatively weak currencies.

LTC/USD, 4-Hour Chart Analysis

That still points to a dangerous long-term setup in the segment, and further technical progress is needed to switch the segment-wide trend. Ethereum remains below the key $500 level, although the coin managed to rally above the $475 level yet again, despite being relatively weak from a short-term perspective compared to BTC.

A rally above $500 would be a very positive short-term sign for ETH, and it could trigger a move to the $555-$575 zone. Primary support is at $450, with further levels at $420, $400, $380, and $360, and below $500 the short-term sell signal is 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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Altcoins

Ethereum Price Returns to Weekly High; EOS Behind ‘Fish’ Attack?

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Ethereum has regained lost ground over the week, returning to the seven day high of $475, even breaking the $476 mark just under an hour ago. For the last few days pundits and analysts marked the $450 barrier as the breakout point, but the growth really accelerated after breaching the $455 level.

In the last twelve hours or so Ethereum went from a price of $446.86 up to $476.13 – a 6.5% growth. If we look at the the strongest surge, which occurred six hours ago at 10am (UTC), we see that ETH prices experienced a 5% spike within just a few hours.

Looking at the weekly trend we see that ETH was falling in value against the dollar for six out of the seven days. Yesterday the coin tried to push upwards, but flattened out in the middle of the day. Last night into today marks Ethereum’s (and most of the market’s) first extended growth pattern for the week.

On June 16th Ethereum’s price was around $489 – not all that far off today’s level. Yet by June 21st the price had hit $543.72, meaning ETH’s value still stands at 12.5% less than during the monthly peak.

Exchange Activity

Bitcoin started the day with faster growth than Ethereum, but eventually fell away to 3.88% growth, compared to Ethereum’s 6.5%. The vast majority of Ethereum’s trades are coming against BTC right now, with ETH/BTC making up around 27.5% of the daily total.

The next most popular trade is against USDT, making up nearly 20% of the 24 hour volume.

The busiest exchange for Ethereum today has been CoinEx – the China-based exchange where the biggest trade volumes come in the form of BTC/USDT trades.

Interesting to note is Ethereum’s second most concentrated source of activity today, namely on Bitfinex where 5% of ETH’s daily total has been directly against U.S Dollars. That amounts to $80 million of the daily volume of $1.7 billion, and marks a sharp influx of new money into the markets.

iFishYunYu Attack

Spam attacks are nothing new to the Ethereum network, and are ultimately helpful in the long run due to their tendencies to highlight potential weaknesses in the platform.

The spam attacks commenced again this week as a smart contract began to overload the Ethereum network with pointless, meaningless transactions. At one point the flurry of activity raised gas prices to over 200 gwei, while some users have reported fees of several ETH at the absolute peak of the spam.

The attack was configured using Ethereum’s own token launching features. Around 5 billion ‘Fish’ tokens were created and distributed to multiple wallets, which then distributed them around to more. What followed was a senseless series of transactions between the wallets which eventually succeeded in congesting the network.

The issue has since been resolved, but already some Ethereum developers are pointing the finger at representatives, either official or unofficial, of EOS. Let the crypto wars commence…?

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 23 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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Analysis

Crypto Update: Bulls Hold Their Ground as Coins Settle Down

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Trading volumes and volatility declined substantially in the cryptocurrency segment this weekend, as the major coins are trying to hold the key support levels that are just below the current prices. For now, Bitcoin, Ethereum, and Ripple all managed to avoid a break below the June lows and the technical damage is limited among the smaller coins as well, despite the still dangerous setups on the long-term charts.

That said, the general character of the market is still bearish, with high correlations between the majors, and robust resistance levels capping the rally attempts in most cases. With all of those in mind, and given the still active short-term sell signals in our trend model, traders should still not enter new positions here, as a test of the lows is likely in the coming week.

The market is still missing a leadership that could turn the short-term trend around, and the relatively weak coins that have been leading the way lower in the recent period are still not showing signs of strength, despite the occasional short squeeze rallies.

BTC/USD, 4-Hour Chart Analysis

BTC tried to get back above the $6275 support/resistance level several times since falling below it on Thursday but the attempts all failed so far. The coin is still in a clear downtrend, although the previous lows haven’t been tested yet.

From a long-term perspective, a durable break below $5850 would signal a structural bear market, so the coming period will be crucial for the whole segment. Primary support is at $6000, while resistance is ahead at $6500, $6750, $7000, and $7350.

Still No Real Momentum Among Altcoins

ETH/USD, 4-Hour Chart Analysis

The basic setup among the largest altcoins is unchanged similarly to BTC, with Ethereum trading between the $400-$420 support zone and the $450 resistance level since the Monday plunge. The coin is holding up above the June low, and it’s still relatively strong from a longer-term standpoint compared to Bitcoin.

On the contrary, ETH is looking weak short-term, and that also points to the continuation of the declining segment-wide trend. ETH is facing further resistance near $500, while support below $400 is found at $380 and $360.

XRP/USDT, 4-Hour Chart Analysis

Ripple barely managed to avoid a break below the June lows, and the third largest coin remains very weak from a technical standpoint, and strong selling pressure is apparent in its market. The coin should stay above the $0.42 level to avoid major technical damage, and he coming days could be crucial for bulls, with strong resistance ahead around $0.45 and $0.51.

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 293 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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