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Uncomfortable Sustain in Markets and Bitcoin

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Hi Everybody,

After much uncertainty regarding the future of the bitcoin network, it seems we now have more clarity.

After years of debating about the right thing to do for bitcoin, the community has finally taken action and has implemented the SegWit solution. The move has been seen as incredibly positive and has propelled bitcion to new all time highs.

It has now been announced that the much in question SegWit2x “Hard Fork” is scheduled to happen within the next 90 days, or sometime in mid-November.

The August 1st deadline has passed us quite smoothly but still to come is the network split that will double the size of each block in the blockchain. We hope this goes smoothly as well.

However, some trouble is brewing under the surface. A recent update to the Bitcoin Core software will force any SegWit2X fork to be contentious and create a new blockchain. When Bitcoin Core 0.15.0 is released, it will begin disconnecting all nodes who are signaling for SegWit2x and essentially make them invalid.

At this moment, the mining pools are staying silent. No doubt cowering from this sudden blow to what seemed like a reasonable compromise. Going forward, they need to decide if they want to simply be happy with SegWit, without going for the Fork or create a new blockchain to support SegWit2x.

Of course, if you’re already creating a new blockchain, why not just use the one that was already created and turn to Bitcash. Though the price doesn’t seem to be affected much bitcoin is very likely for some more surprises in the near future.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

Volatility Sustained

Markets Taking a Dip

Inflation Data Tomorrow

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

Market Overview

The volatility that we saw in the stock markets yesterday has indeed continued. The VIX has sustained and closed out yesterday above 11 points.

Not exactly a high number but at least it’s away from the historic lows that it’s been setting these past few weeks. To put things into proportion, here’s a graph of the VIX over the last 2 years. In mid 2016 we can see the Brexit bump and at the start we have the sell-off of August 2015, the last major market correction.

For now, fear is still at a very low level. However, the flight to safety that we noted yesterday is still very much at play.

Gold has reached even further highs clocking in as high as $1280 this morning and the USDJPY is indeed looking weak, indicating Asian concerns have not abated.

The Swiss Franc rally however is retracing for the moment. It’s come a long way in a short time so some type of retracement is not at all surprising.

The U.S. Dollar, which has been dropping since January is indeed getting some support. Most likely her safe haven status is what’s holding her up at this point.

Bitcoin and Ethereum have seen minor resistances but by the chart the trends looks strong.

What’s Next?

We continue to monitor the news for any updates about North Korea. Many investors still put a nuclear war at a very low probability. Of course, even a low probability of something that terrible has a way of sparking fear. If there are no further updates in the near future, we can expect this to blow over… at least until the next time.

This is far from resolved and for now there doesn’t seem to be any clear path to a resolution.

On the data front, we have some PPI data that could be key later today but the big release that everyone is waiting for is the inflation data tomorrow, which we’ll of course cover tomorrow.

Very sorry for the delay in the updates yesterday and today. I’ve been travelling a lot lately. Tomorrow’s may be a bit late as well. We should be back on schedule by next week. It’s really nice to see all the Emails and messages coming in once we pass the 15 minute mark. Very glad to see that you guys are eager to read the updates.

Have 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.

Featured image from 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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4.6 stars on average, based on 152 rated postsSenior Market Analyst at Etoro.com.




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2 Comments

2 Comments

  1. P. H. Madore

    August 10, 2017 at 4:03 pm

    We might note that the recent spike in BTC may have a lot to do with the self-same Bitcoiners cashing out their Bcash and buying more BTC.

  2. Mati Greenspan

    August 11, 2017 at 3:31 pm

    Good Point. I believe we mentioned this in the previous day’s update. 🙂

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Altcoins

Why Investors Should Be Paying Attention to Aelf

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So far, each iteration in the evolution of cryptocurrencies and blockchain companies has come with its own issues and setbacks. This is because the scale of the companies is actually fairly limited, and not as comprehensive as the promises made by blockchain fanatics.

Part of this the lack of connectivity between blockchains, but there is also the issue of the blockchains not having the scalability necessary to accommodate huge companies. When you have a bunch of separate blockchains functioning out of sync, it is hard to build anything significant, as the “ecosystem” is coming to find.

A Natural Evolution

The evolution of the space started with Bitcoin – there were coins before, but nothing that caught on – which was the equivalent of a “simple app”. It could be traded and used the basic functionality of blockchain, but there was nothing complicated about its use case.

Then there was Ethereum, which allowed for smart contracts and other protocols to be built out upon it. This results in a lot of different apps functioning on the same platform, much like an app platform.

Finally, the hope is that Aelf will be able to create a blockchain operating system (much like Linux) that will add an infinite level of scalability to the platform. It would be developer and consumer friendly and function with high reliability.

Two Key Innovations

This blockchain operating system depends on two major innovations: side chains and a unique governance system. By using a multi-chain architecture rather than a “main” blockchain, they avoid many of the pitfalls of NEO or Ethereum. Ideally, this will allow Aelf to be highly available and have a high transaction-per-second capacity.

Additionally, companies will be able to rent out nodes (nodes as a service) to help process their side chains when they’re having scaling issues. This is one of the many benefits of operating on an operating system-esque model.

The governance system for Aelf must be unique, since regular consensus algorithms wouldn’t work when confirming information from side chains on tho the main chain. Therefore, a Delegated Proof-of-Stake algorithm is used, which helps you vote on which nodes will become mining nodes and have the ability to confirm transactions.

Current State of Aelf

Aelf is currently in a big growth period. The main net launch is scheduled for 2019, with the development team publishing consistent updates along the way.

The protocol uses their proprietary token, ELF, as a utility token that permits users to access, interact with, and directly participate in DAPPS and other services. No ICO occurred for ELF and it was instead financed using a private token sale.

Breakout Potential

Currently ranked 89th in terms of market capitalization and available on Binance, ELF had a rough December, with a recent recovery occurring during a consolidation period.

The current prices around 3,000 to 3,500 satoshis represent a good buying area while waiting for a breakout. ELF is a fairly volatile coin and with consolidation occurring rapidly, it isn’t unreasonable to think it could hit 4,500 satoshis.

Additionally, with the pending development and release of its mainnet, the fundamental could potentially change very quickly. This could assist the technicals and create a highly profitable breakout, which makes it a good short- or medium-term trade.

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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Analysis

Crypto Update: Litecoin Leads Pullback in Majors

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The major cryptocurrencies are all lower today following the test of the recent swing highs. Yesterday, the early leader of the current short-term uptrend, Litecoin hit the key $51 resistance, and today the coin pulled back sharply, triggering a broad correction in the segment. The leaders of the rally are all notably lower, but they are still holding on to the bulk of their recent gains, and the rising short-term trendlines are all intact.

From a short-term technical perspective, the current pullback is orderly, and as the coins clear the overbought momentum readings, traders could re-enter smaller, speculative positions with strict risk management rules. The long-term technical picture continues to warrant caution, and bear market rules still apply despite the consolidation of the recent months.

LTC/USD, 4-Hour Chart Analysis

Litecoin’s performance continues to be an important tell for the whole segment, and after yesterday’s downgrade in our trend model, the coin’s pullback is weighing on the whole market today. That said, volume patterns and price action in general, are still in line with a short-term uptrend, and traders could be looking for re-entry points and the overbought momentum readings get cleared.

The key $51 resistance level, which halted yesterday’s move, could be in focus again in the coming days, while a deeper correction could see the test of the $44 level. For now, our trend model remains on a neutral short-term signal, while the long-term signal is still clearly negative, with further support levels found near $44 and $38, and with strong resistance also ahead near the $56 level.

BTC/USD, 4-Hour Chart Analysis

Bitcoin remained within its short-term consolidation pattern, as the $3850 level provided support, so far, during the broad pullback in the segment. The MACD indicator is now pointing to an ongoing short-term correction, but the relatively weak short-term uptrend is still clearly intact.

Traders could hold on to their positions here despite the pullback, as the momentum indicators haven’t reached extreme overbought levels, leaving our trend model on a short-term buy signal, but we would with entering new positions until the pullback runs its course. While the long-term technical outlook is clearly negative for BTC here, a move above the key $4000-$4050 zone could lead to a test of the next major zone near $4450, while support below $3850 is still found near $3600 and just above $3450.

Ethereum and EOS Remain Stable as Ripple Fails to Show Strength

ETH/USD, 4-Hour Chart Analysis

Ethereum continues to trade in a bullish short-term correction pattern near the $145 resistance level. The uptrend is clearly intact in the coin, and although the short-term momentum indicators continue to show overbought readings the rally could soon continue, with the $160 price level still being in sight. Support levels are still found near $130 and $112, while the next major resistance zone is found near $180, and the long-term downtrend is still in no danger here.

EOS/USD, 4-Hour Chart Analysis

EOS, which has also been among the leaders of the rally, continue to show stability amid today’s pullback, but as it got severely overbought during the recent upswing, our tend model is on a neutral signal. Traders should wait for the correction to run its course before re-entering their positions, since the long-term setup in EOS still warrants caution. Support is found near the current price level at $3.80, at $350 and near $3, while resistance is now ahead near $4 and $4.50.

XRP/USDT, 4-Hour Chart Analysis

Ripple remains the primary concern for bulls here, as the relatively weak coin failed to show signs of stability falling back to the vicinity of the $0.32 level. The coin got stuck below the dominant bearish short-term trendline, and our trend model is now on a short-term sell signal, despite the broad rally in the segment.

With the long-term technicals still being hostile even in the case of a new swing low in the coming week, traders should remain cautious with XRP and focus on the stronger currencies with regards to trading positions. Below $0.32, further support zones are found near $0.30, $0.28, and $0.26, while short-term targets are still ahead near $0.3550, and $$0.3750.

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 468 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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Altcoins

Stellar Price Analysis: XLM/USD Bulls Run into Resistance and Profit Taking Following IBM Boost

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  • Stellar’s XLM price was seen cooling in the session on Thursday, as the bulls ran into a barrier of resistance.
  • IBM detailed it has several letters of intent from banks to leverage IBM-Stellar technology.

Stellar’s XLM price has managed to pick itself up from the recent low area, where it was moving within the total abyss. The decent falling for XLM/USD was pushing it into totally unknown territory, where the price has not traded before. A low was produced down at $0.07330000 before the bulls kick-started the recovery. It has now gained a chunky 30% over the last two weeks, with upside momentum particularly gathering decent pace in the past four sessions.

The most recent jump north came following the price escaping a nine-session range-block formation. The low of the mentioned range was observed down at $0.07590000, with the high up at $0.08330000; the bulls forced a breach of this level on 18th February. Upon the move above, a fresh wave of buying pressure came into play, with XLM/USD moving to its highest level in almost four weeks. At the time of writing a pullback can be observed, which could be potential profit-taking after the decent run.

Several Banks to Join IBM’s Stellar-based Service

According to a representative from IBM, several confirmations have been received from banks on their intent to incorporate digital assets, including their own stablecoins via IBM World Wire and Stellar. The head of Blockchain at IBM Jesse Lund said:

“We’ve got a launch announcement coming out soon. We’re going to be supporting more than 50 countries out of the gate, 30-40 currencies, and enough market makers to drag along 30 or 40 banks. So we’ll have a significant portion of the world covered. Our goal is to continue to expand that network and to provide global coverage within 3-5 years where you can actually send remittances in a consistent way, immediately, at a very low cost, from anywhere in the world to anywhere in the world.”

Several banks have confirmed their plans to release digital assets, including their own stablecoins, based on IBM World Wire and Stellar. According to the IBM representative, the company has already received several letters of intent from a number of banks around the world.

Technical Review – XLM/USD

XLM/USD daily chart.

Given the recent price cooling, eyes will be on a possible return down to the breached range-block area. A move as described would complete the technical breakout and retest of the mentioned zone. Should this fail to provide necessary comfort to the falling price, then eyes will be on another test of the low, $0.07330000. If a further breach is observed here, then this opens the door once again to a move within an unknown territory, moving within the abyss.

Looking to the upside, if XLM/USD completes the break retest scenario and the bulls capitalize on this, then a decent push back north may be seen. A near-term supply area tracks above from around $0.09350000 up to $0.0980000. Should the bulls force a break above the mentioned supply, then a retest of the 2019 high area would be eyed. In other words, a move back within the range of $0.13-0.1400000.

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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4.6 stars on average, based on 125 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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