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Two Different Directions for the World

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As I start writing to you today, a multi-national conference is underway in Danang Vietnam. This conference had two keynote speakers, arguably the two most powerful men in the world at the moment, Donald Trump and Xi Jinping.

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The two men could hardly be more opposite when it comes to their views on international cooperation and globalization. Mr. Trump expressed the view that multi-national partnerships are harmful to individual states and that countries should seek direct bilateral partnerships.

Mr. Jinping, on the other hand, used the stage to promote his Belt and Roads initiative, which is a massive multi-national project that Xi has been pushing over the past few years.

The financial markets remained rather indifferent to all this as it seems to have bigger things on the agenda.

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@MatiGreenspan
eToro, Senior Market Analyst

Please note: All data, figures & graphs are valid as of November 10th. All trading carries risk. Only risk capital you can afford to lose.

Market Overview

Donald Trump has been on his best behavior during his Asian tour so far. Though he has more or less stuck to his guns about the main issues, he has been a bit more defensive than usual in the last few days.

So far, the strategy seems to be working for him. Just this morning, China announced that they would be opening their financial markets to more foreign investments. This is part of their long term strategy to make China the global center for business.

Despite Trump’s seemingly successful new strategy, stocks in the United States saw some notable declines yesterday. As we’ve been discussing, the main driver at the moment is tax reforms, and a report came out yesterday that it might not happen until 2019.

The Dow Jones fell about 320 points from its all time high (blue) to the lows of yesterday’s session (yellow) before seeing a miraculous recovery.

The USDollar remains very much in focus. Here’s the chart we posted the other day, as you can see we’re now near the bottom of the channel. This is where the Dollar recovery will be at its greatest test.

Also, take a look at oil. Flying high above its 200 day average price (blue).

Go Digital or Go Home

Of course, the biggest question on many eToro minds is Bitcoin. After the announcement that the chain split has been called off there was a brief surge in the price above $7800 but that didn’t last very long.

The price has moved from $2963 on September 15th to the all time high of $7872 on Wednesday. That represents a total gain of 165% in less than two months.

If we do get a retracement now, the Fibonacci lines indicate that the most likely first level of support would be at $6000.

Now, let’s zoom out and take a look at the “long term” trend…

Here we can see that we’ve veered off the major trend line (yellow). Of course, with all the excitement we’ve been seeing in bitcoin lately and the massive rate of adoption it’s certainly possible that we shoot straight to $10,000 from here.

However, we can see very defined levels of support on bitcoin. In the past year, every time it broke an all time high, it eventually came back down to build support. We can see the two most recent such levels on the chart above in blue and green.

What else?

Two holidays. Today is Veterans Day in the USA. So even though most markets will be open we could see a lot of traders heading out for the weekend a few hours early and liquidity is likely to get quite thin.

Tomorrow is Single’s Day in China. By far the biggest retail holiday in Asia, if not the world. A strong showing of purchases could give some much needed support for global markets.

Wishing you and your family a pleasant weekend.

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

Crypto Update: Post-Crash Oversold Bounce Ensues in Crypto-Land

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As Bitcoin plunged below $10,000 yesterday, nearing the crucial $9000 level, all of the majors followed the most valuable coin in the panic sell-off. Our trend model turned short-term neutral in most of the cases, while the long-term prospects also improved thanks to the deep and violent correction.

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Bitcoin itself already traded at slightly attractive levels, as it breached our first possible target for the correction, but we expect a lengthy bottoming process with a possible dip to the $8200 or $7650 supports.

As for the short-term, the oversold rally initiated from the lower boundary of the declining trend channel, and a choppy, hard-to-trade consolidation period is likely ahead that could last throughout the weekend. Strong overhead resistance is found at $13,000, likely capping the advance for now, while the $11,300 support/resistance level could also be in the focus in the coming sessions.

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BTC/USD, 4-Hour Chart Analysis

Altcoins

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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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Analysis

Technical Analysis: Bitcoin Hits First Correction Target as Volatility Reigns Supreme

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The violent correction that created a full-on panic in the cryptocurrency segment continues to unfold in a rather orderly way from a technical standpoint, reflecting the extreme nature of the preceding rally. That said, the percentage losses in some of the coins are huge, and the collapse of Bitconnect accelerated the process, spreading uncertainty among investors, and sentiment quickly got bleak.

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Bitcoin remains in the center of attention, and the most valuable coin finally breached the $10,000 level today, causing another strong wave of liquidation in the majors, that could be the base of a more durable bottom, and a consolidation in the coming days after the crazy last couple of days.

The coin is now oversold from a short-term perspective, and although further losses are likely before the end of the cycle, given the still only neutral long-term momentum readings, a counter-trend move is possible in the coming days. Below, $9000, strong support levels are still found at $8200 and near $7650.

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BTC/USD, 4-Hour Chart Analysis

Altcoins got slaughtered in the two-day crash with Ripple leading the way lower, while Ethereum also lost its relative strength amid the broad sell-off and its recent trendline break. ETH got close to the next major support level at $740 during today’s move, and as the short-term momentum is now oversold, a bounce to the zone around $1000 could be ahead. We still expect the correction to continue in the token, as the long-term momentum remains overbought, with key support at $625 and near $575.

ETH/USD, 4-Hour Chart Analysis

Ripple fell as low as the $0.85 support level during the crash, and although the coin rebounded above $1 afterward, it remains 70% off its recent all-time highs. Long-term investors could already accumulate small positions on the short-term sell-offs, although the correction will likely continue, and a prolonged consolidation phase might also be ahead. Key support levels are now found at $0.85 and $0.68, while resistance is ahead at $1.25.

XRP/USDT, 4-Hour Chart Analysis

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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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Analysis

Market Update: Bitcoin at $10,000, Ripple at $1, Ethereum below $1000 as Carnage Continues

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Yesterday’s China induced technical breakdown led to an unmitigated disaster in the crypto segment, as all of the majors crashed, erasing hundreds of billions of market cap in the process. The collapse of the alleged Ponzi scheme of Bitconnect added insult to injury and caused another wave of selling in late trading, driving the price of Bitcoin to $10,000, a bit earlier than expected.

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BTC/USD, 4-Hour Chart Analysis

The most valuable digital currency rebounded as much as 15% after the late-session crash, but the selling pressure remained strong and today BTC briefly traded below yesterday’s low, with most of the majors holding up above the crash low.

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That said, the sell-off is unlikely to be over and volatility is probably here to stay for the week, with violent swings in both directions. The coin is still likely to push lower, with a possibly lengthy bottoming phase, so a quick recovery to the record highs is unlikely, but strong support is found below $10,000 at $9200, $8200, and $7650.

Traders should be aware of the elevated risk in short-term positions here, while long-term investors could slowly accumulate positions on the sell-offs, as the coins are headed to oversold territory.

A Little Perspective

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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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10 votes, average: 4.90 out of 510 votes, average: 4.90 out of 510 votes, average: 4.90 out of 510 votes, average: 4.90 out of 510 votes, average: 4.90 out of 5 (10 votes, average: 4.90 out of 5)
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