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Analysis

USD Has Found Itself Among Outsiders

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By Dmitriy Gurkovskiy, Chief Analyst at RoboMarkets

There are a lot of factors weighing on the US dollar as of late. EURUSD skyrocketed towards the highs it reached on November 20th, as the currency market was overwhelmed by another wave of “escaping-from-the American-currency” investors.

It wouldn’t be right to say that there was one particular factor that made USD fall. The major dollar-based currency pairs is being currently driven by several catalysts, which are forcing it to move towards local highs. Apart from other things, we’re talking about the numbers on the US Labor market published last Friday. As usual, investors were focused on some of them, for example, the Non-Farm Employment Change, which was 155K in November. However, in the previous month, the indicator was 237K, while market expectations for this one were 198K.

Still, the Unemployment Rate in the US remained unchanged at 3.7%. The Average Hourly Earnings added just 0.2% m/m, which is less than expected. However, on YoY, the indicator expanded by 3.1% and that’s a pretty solid number.

The truce in the American-Chinese “trade war”, even considering the arrest of Huawei Technologies’ top manager, makes investors’ demand for USD as a “safe haven” decrease.

There won’t be a lot of numbers from the US this week. The ones worth paying attention to are the Consumer Price Index and Retail Sales to be published on Wednesday and Friday, respectively. On Thursday, December 13th, the European Central Bank is scheduled to have another meeting, the last one in 2018, where the regulator will decide on its interest rate and further monetary policy.

In case of EURUSD, the uptrend is still dominating; this ascending movement may be considered as a correction of the previous long-term downtrend. As we can see in the H1 chart, the pair is getting closer to the upside border of the internal mid-term rising channel, which is the resistance level at 1.1455. If the price breaks it, the instrument may continue growing to reach the key mid-term correctional target at 1.1545. However, one shouldn’t disregard another scenario implying a new decline, which may start if the pair rebounds from the above-mentioned resistance level. To confirm this decline, the price has to break the local support at 1.1405. In this case, the downside target will be close to the support line at 1.1340.

Disclaimer

Any predictions contained herein are based on the authors’ particular opinion. This analysis shall not be treated as trading advice. RoboForex shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.

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 23 rated postsHaving majored in both Social Psychology and Economics, I went on to continue my education in post graduate. Later I worked as a team lead of a tech and fundamental analysis lab in the Applied System Analysis Research Institute. This helped me to acquire all necessary skills and experience to become a successful trader and analyst, as well as a portfolio manager in an investment company. I'm a pro in the financial field and the author of articles for various international media. I also hold the position of Chief Analyst at RoboMarkets.




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Analysis

Longest Bear Market in Crypto History?

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In just 30 days, cryptocurrencies will have entered their longest bear market in history, according to Ran NeuNer, host of CNBC’s Cryptotrader show. The frenzied selloff since early 2018 has delivered a beat down to retail traders, hedge funds and long-term crypto holders. However, for one small corner of the market, business is thriving.

Bear Market Drags On

As of Thursday, the cryptocurrency bear market of 2018-19 has reached 391 days. By this time next month, the bear market would have stretched beyond the 420 days seen in 2014-15. Officially, it will be the longest bear market in crypto’s short history. (To refresh your memory, a bear market is defined as a drop of 20% or more from a recent high).

Of course, frantic selloffs are nothing new for cryptocurrencies. Since 2011, bitcoin has experienced at least five epic meltdowns, with losses ranging from 37% to 84%. Each time, the market has come back stronger than ever, culminating in the 2017 bull run that drove bitcoin toward $20,000.

At the height of the bull market in early 2018, cryptocurrencies were valued at a whopping $840 billion. Less than 12 months later, the market bottomed at just over $100 billion. The bearish trend is expected to resume until at least mid-2019, according to a combination of technical analysis, market sentiment and history of monthly momentum. There are, of course, other reasons to expect the bears to maintain control. These include regulatory uncertainty, hesitation on the part of institutional investors to participate and the fallout from the long-winded ICO boom.

Read why 2019 is bitcoin’s year of accumulation.

Interestingly enough, bitcoin has managed to set higher lows in six of the last seven years. In other words, bitcoin’s price bottom is incrementally higher almost every year stretching back to 2012.

Creditors Capitalize

As the bear market stretches on, crypto traders and startups are turning to creditors to fund their shortfall. As Bloomberg recently reported, crypto creditors are finding strong demand from traders who don’t want to sell their coins at depressed prices as well as from big investors looking to short virtual currencies.

Much like hedge funds, most crypto lenders began their operations in 2017 during the market boom. Hedge funds have struggled since the market downturn took effect while lenders have seen their business thrive.

As Olga Kharif notes, the crypto bust is putting lenders on both sides of the equation: “Helping believers pay their bills while awaiting a rebound, and also enabling bets by people who think the drop has further to go.”

As crypto ventures continue cutting staff, companies like BlockFi have grown their revenues and customers tenfold in just six months. Aave, which owns ETHLend, recently opened an office in London and will soon expand in the United States. A company by the name of Salt Lending already employs 80 people. (Keep your eye on Salt, as the U.S. Securities and Exchange Commission (SEC) is probing the company’s initial coin offering.)

The Future

Predicting crypto bottom is notoriously difficult, and many analysts have been burned trying to come up with logical answers to a market that is still in its infancy. In the next 12 months, the evolution of the crypto industry will be dictated by several factors, including the SEC’s regulatory oversight of the market, its ruling on a hotly debated bitcoin ETF and appetite for physical bitcoin futures among institutional investors.

Related: As Race for Bitcoin ETF Heats Up, SEC Identifies Cryptocurrency as a Top Priority in 2019

The ICO model that dominated 2017-18 is also undergoing a massive shift toward security tokenization and even initial exchange offerings. While it’s still too early to gauge the impact of these new funding models, it’s clear that the ICO market is on its last leg. Case in point: token projects raised $1.5 billion in January 2018. By December, that figure had fallen to just $59 million.

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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4.7 stars on average, based on 738 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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Ethereum Price Analysis: ETH/USD Bearish Flag Structure Eyed

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  • Ethereum price has stabilized but is moving within a dangerous range-block formation.
  • ETH/USD via the daily chart view is forming a bearish flag pattern.

ETH/USD price action has stabilized over the past five days, and is moving within a narrowing range. This movement appears to be somewhat expressing potential downside risks after the selling pressure seen in the second week of January. As a recap, the price was supported in its move north from mid-December 2018 up to 7th January. An ascending trend line was proving necessary comfort in this trend higher, however markets bears managed to force a breach. The support gave way, opening the door to a fresh wave of selling from 8th January.

ETH/USD daily chart.

Around 30% of the bull run that was seen in the above-mentioned period has been reversed. Vulnerabilities continue to linger, as ETH/USD trades around key daily support. The level to be aware of is $116.70, which is vital ahead of the big psychological $100 mark. A breach could see a test of daily support at $102, with the price likely to consolidate between here and $116. Given prior behavior around these areas, ETH/USD may be forced to retest the December 2018 low, $83.10. This would likely be the case, should a return of bullish momentum not see a pickup in pace soon.

Constantinople Hard Fork Delay

The stability in price is surprising given the let down for the community with regards to the heavily anticipated Constantinople hard fork. As reported by the CCN team, Ethereum’s core developers called for the Constantinople upgrade to be delayed. This was just some hours before the hard fork was scheduled to go live on the network. ETH/USD fell double-digits on the back of this being postponed. A drop of 10% was observed.

Technical Review – ETH/USD

Looking via the daily chart view, price action is forming a bearish flag pattern structure – the pole which is seen with the fall from 7-10th January. In terms of the actual flag, this is the current range-block viewed. Upside resistance can be seen just ahead at $135, and lower support noted the mentioned $116.70 area. The next major areas of support are the $102 daily pivot point, the December 2018 low of $83.10, and then lastly, the May 2017 low of $65.85.

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 107 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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Analysis

Crypto Update: Sideways Drift Continues but Sellers Still in Control

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While the bounce on Monday gave some hope to crypto bulls that last week’s plunge was just a correction in an ongoing broader counter-trend move, so far, we haven’t seen meaningful follow-through. That means that the bearish short- and long-term trends are still dominant in the segment and sellers are clearly in control of every major top coin.

Also, while volatility is relatively low, correlations are still elevated, and volume patterns are bearish as well, so our trend model remains on sell signals with regards to the overwhelming majority of coin on all time-frames. Traders and investors are still advised to stay away from entering new positions, as we have no evidence the bear market is over, and at least the test of the lows is likely in the coming months.

That said, a quick recovery above the primary resistance levels would be a positive sign here, but until we see signs of technical strength, the defensive approach is warranted as bearish risks remain very high here.

BTC/USD, 4-Hour Chart Analysis

Bitcoin’s relative stability is still the only positive sign among the top coins, but BTC also lacks bullish momentum and it failed to leave the close vicinity of the key $3600 support level. The $3850 resistance is out of reach, for now, and given the clearly bearish long-term setup, traders and investors shouldn’t enter positions here.

A move above that level would be a positive sign for bulls, with further zones between $4000 and $4050, and near $4450, but we still expect a move towards the support levels near $3250 and $3000 in the coming weeks, even if a broader bottoming process might already be underway.

ETH/USD, 4-Hour Chart Analysis

While Ethereum spiked higher again towards the $130 resistance level today, the move failed again and bulls failed to make technical progress, with the recent low still being in danger. A sustained push above $130 could still signal a failed break-down pattern, but the lack of bullish momentum points to a continuation of the decline.  Key support is found near $120 and between $95 and $100, while further resistance is ahead at $145, $160, and near $180.

Altcoins Unchanged and Bearish After Choppy Day

LTC/USD, 4-Hour Chart Analysis

The volatility compression continued in all of the major altcoins as well, but the broad selling pressure is still apparent in the segment. Litecoin failed to get close to the primary resistance zone near $34.50 despite the early-week rally attempt, and it continues to threaten with a move below the key $30-$30.50 support zone.

A breach of support would likely trigger a move towards the $26 level, with the oversold short-term momentum readings now being cleared in the market of LTC. Further strong resistance is ahead near $38 and $44 and with support found near $23, and traders and investors still shouldn’t enter positions here.

XRP/USDT, 4-Hour Chart Analysis

Ripple has been showing signs of relative weakness again today, after the brief period of stability and the technical picture continues to be negative on all time-frames, and our trend model is also on short- and long-term sell signals. The $0.32 price level is still in focus, and we still expect a move below $0.30, with strong support found near the $0.26 level, with resistance ahead near $0.3550 and $0.3750.

DASH/USD, 4-Hour Chart Analysis

Dash remained among the relatively weaker majors as well, and it still hovering around the $70 price level after bottoming out close to $67.50. A test of the bear market low near $56 seems very likely in the coming weeks, and only a move above the strong resistance zone between $76.50 and $80 would change the short-term outlook for the coin.

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 443 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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