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Uncomfortable Sustain in Markets and Bitcoin

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Hi Everybody,

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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.

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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.

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Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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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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Cryptocurrencies

Trade Recommendation: Monero

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The market moves in a horizontal channel between 85.00 and 100.00 levels. Now the price is at the bottom and we have a buy opportunity. RSI confirms price reversal and MACD histogram supports upward movement. DMI allows opening long trades. Pending orders for buy should be placed above the local high at 89.50 level. Stop orders must be placed at 84.30 level. The main profit target is 100.00 level. The part of trade volume can be left for long run. If you don’t use leverage, recommended trading volume for this trade is up to 5% from your deposit.

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Market: XMRUSD
Buy: 89.50
Stop: 84.30
Profit Targets: 100.00

The trading signal is based on Poloniex chart.

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Cryptocurrencies

Trade Recommendation: DigiByte

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This is a new attempt to catch a trend reversal and open long trades on good levels. We have double bullish divergence which confirms price reversal with further upward movement. RSI confirms price reversal in the oversold zone. MACD supports upward movement and DMI allows opening long trades. It’s a buy opportunity based on the confirmed trend reversal signal. Entry level is 0.00000170 with stop orders at 0.00000125 level. Profit targets are 0.00000300 and 0.00000450 levels. If you don’t use leverage, recommended trading volume for this trade is up to 5% from your deposit.

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Market: DGBBTC
Buy: 0.00000170
Stop: 0.00000125
Profit Targets: 0.00000300 and 0.00000450

The trading signal is based on Poloniex chart.

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Bitcoin

We Have to Talk About Bitcoin Again

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It hasn’t been a day since our last bitcoin article, but the world’s leading cryptocurrency has soared to fresh all-time highs yet again. This time, prices approached $6,200 for the first time ever.

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Bitcoin’s Bull Market

BTC/USD touched a session high of $6,180.00, bringing its total market cap to $103 billion. Prices were last seen hovering around $6,100, according to Bitstamp.

The rally on Saturday came less than 24 hours after the bulls tested the waters near $6,000. Analysts are almost certain that prices can still go higher, making a compelling case for investors who are still on the sidelines of the crypto rally. FundStrat Global Advisor’s Tom Lee believes prices could top $25,000 over the next five years. In fact, he says this is a conservative estimate.

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Bitcoin’s epic run has dwarfed Wall Street’s post-election rally, and has defied repeated warnings from big banks and policymakers.

Bitcoin Gold’s Private Fork

Coinbase made a startling revelation Friday in its FAQ section, where it claimed that Bitcoin Gold (BTG) has already privately forked. The private fork occurred “at a point known only to the Bitcoin Gold development team.” The newly minted digital currency will be made publicly available when the Bitcoin blockchain reaches block no. 491,407. That’s estimated to occur Wednesday.

Bitcoin Gold isn’t your typical fork in the traditional sense of the term. The Wednesday fork date is when the first Genesis block will be mined. The Bitcoin network will have no part in this process whatsoever.

Market participants are still skeptical whether BTG is legitimate. The code has not been made available, and its developers have already mined tens of thousands of blocks.

BTG’s reluctance to release its code publicly is a “major security risk,” according to Coinbase. As such, the U.S.-based exchange will not support the new coin. The broker remains committed to adding support for the Segwit2x hard fork in November.

“After the fork, we will enable access when we have determined each blockchain is secure and stable,” Coinbase Dan Romero said in a blog post earlier this month. “We expect this to happen within a few days after the fork, but it may take longer if additional risks emerge.”

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