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We Don’t Have a Clue

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By far the favorite social network for journalists and second favorite for financial buffs is Twitter. At least for now.

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The hallmark of this unique platform has been the amount of information that you can gather in the least amount of time and screen space. Each tweet is limited to 140 characters, so you can literally scan hundreds of headlines in the span of a few minutes.

Yesterday night, Twitter started a war with their own community by announcing that some users will now be allowed to create 280 character tweets. The backlash was instant with many calling out the CEO Jack Dorsey. One even decided to fix his tweet in a very appropriate way showing that if you’re creative enough, anything worth saying can be said in 140 letters or less.

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@MatiGreenspan
eToro, Senior Market Analyst

 

Please note: All data, figures & graphs are valid as of September 27th. All trading carries risk. Only risk capital you’re prepared to lose.

Market Overview

Janet Yellen’s speech last night was groundbreaking, to say the least. Not only did she elaborate on her previous statement that the Fed doesn’t understand inflation but she also explained how they plan to proceed despite this apparent lack of knowledge.

This is not Yellen’s first rodeo and she did handle the markets with extreme caution, like a five year old holding an egg on a spoon. She alternated between telling Wall Street what it wanted to hear and delivering hard truths in a very digestible way. This display proves that though they may not have a clue when it comes to the current factors driving the economy they certainly know how to manipulate the markets.

Rather than taking this as a big red warning sign, many traders remained hyperfocused on what this will mean in the short term. More specifically, will the Fed raise the US interest rate in December?

The answer that many analysts arrived at is yes. The odds of a rate hike by the end of the year moved from 63% yesterday to 70% this morning. The immediate impact on the markets was a much needed boost to the US Dollar.

With Donald Trump’s new weak USD policy the Dollar has been having an extremely bad year so far losing 12.5% of it’s value from the highs in January (green circle) to the lows at the beginning of September (purple circle).

Now, every technical analyst draws their lines slightly differently. So on this chart, I’ve drawn two paths of resistance. The yellow line is the most conservative possibility and the blue line is the most aggressive possible.

Thanks to Yellen’s clever manipulation the blue resistance is now broken and due to the quick nature of the Trump induced decline, there isn’t much in the way of technical levels to point to until the yellow line.

The strength of the Buck has large ramifications for other markets as well. The most noticeable in this case is Gold which is now struggling to maintain its gains. As of this writing, the shiny metal is below $1300 per ounce and fighting to hold what little support it has left.

Well Deserved

Big Kudos to our top cryptotrader @Jaynemesis who appeared in an extensive article on Bloomberg about cryptos, copytrading, and the recent market moves.

The full article can be found at: https://www.bloomberg.com/news/articles/2017-09-27/cryptocurrency-derivatives-you-bet-this-trader-has-295-return

As we showed yesterday, the cryptomarket has been able to break the downwards trend already. However, it has yet to decide on the next direction. To reiterate, here’s a chart of the breakout in Bitcoin. A strong tear through $4000 could be quite significant.

Also, though many on Wall Street are calling cryptocurrencies a bubble. One trader has stated that the bubble is just getting started and that he thinks this will turn out to be the biggest bubble we’ve ever seen. In true Wall Street fashion, Mike Novogratz wants to ride it all the way.

Here’s the link to that story: New $500 Million Crypto Hedge Fund

Let’s have an amazing 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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Analysis

Technical Analysis: Majors Stage Rally but Strong Levels Still Ahead

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The cryptocurrency segment has recovered from a broad correction today in early trading, with the most valuable coins all turning into green during the session, despite the bearish start to the overnight session. With bottom-to-top gains of up to 15%, the rally helped in easing the worries of bulls, especially in the case of the relatively weaker coins.

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Bitcoin and most of the largest altcoins remained stable during the selloff, and BTC recaptured the $10,000 level quickly after trading as low as $9600 overnight. The initial rally topped out near $10,400, and the coin is trading back near the $10,000 level, as the bullish momentum faded away somewhat.

BTC/USD, 4-Hour Chart Analysis

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That said, we expect the uptrend to continue even if the correction could still carry Bitcoin lower. Further strong support is found between $9000 and $9200, while targets are ahead at $11,300, $13,000, and $14,250.

ETH/USD, 4-Hour Chart Analysis

Ethereum showed strength during the bounce again after yesterday, together with the early leaders of the rally, and although the coin dipped below the $845 level in the second half of the session, the signs remain positive for bulls. Support levels are now found at $780, $740, $625 and $575, while resistance is ahead near $910 and $1000.

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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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4.7 stars on average, based on 113 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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Analysis

Crypto Update: Encouraging Bounce before the Weekend

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The correction that started out in the major lagging altcoins and spread to the leaders of the market yesterday is weakening, with a nice rally today in early trading in most of the majors.  Although the segment is not out of the woods just yet, the bullish signs which have been present ever since the lows three weeks ago still persist.

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Bitcoin stayed clear of the key $9000-$9200 support zone, for now at least, which would be an ideal bottom for the correction, but as we noted long-term investors should accumulate the coin during the correction, as the short-term momentum is already back to neutral. The $10,000 level is still in the focus, while the next major resistance is found at $11,300 and the prior rally high near $11,750 is also ahead as an obstacle.

BTC/USD, 4-Hour Chart Analysis

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The early leaders of the rally, Litecoin and Ethereum Classic are once again showing strength and that could signal that the next leg higher already started. That said, with several coins still stuck in broader downtrends, investors should still expect a bumpy road, with the occasional volatile sell-off.

Litecoin got very close to the $180 support that we have been monitoring throughout the correction, but it quickly bounced above the $200 level again, as the broad bounce started after testing the previously dominant declining trendline. So far, the price action in the coin is consistent with a new uptrend and we still expect LTC to lead the market higher.

LTC/USD, 4-Hour Chart Analysis

Ethereum Showing Positive Signs Again

ETH/USD, 4-Hour Chart Analysis

After yesterday’s early signs of relative strength, the second largest coin is now clearly showing evidence of accumulation, as it quickly recovered above the $845 level following the selloff after the US close. The coin established a new support near $780, and as the MACD is close to providing a bullish cross, it might signal the bottom of the correction.

Despite the bullish price action across the board, even in the recently lagging XRP and IOTA, the correction could still continue, but we still advise traders and investors to look for entry points as we expect the recovery to continue, although traders should still use smaller positions in the relatively weaker coins.

Stay tuned for our detailed technical analysis later on today.

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 113 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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Analysis

Technical Analysis: Correction Continues but Coins Remain Stable

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It’s been another mixed session for cryptocurrency investors as judging by only the price action, the segment suffered losses across the board, but comparing the current sell-off to the January plunge reveals that the majors are much more resilient this time around.

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The largest digital currencies are holding on to most of the gains of the recent weeks, and the price action near the crucial support zones is also encouraging. With all that said, the correction is not over yet, and further losses are still in the cards, but barring a substantial change in price action, the coins will likely continue the rally.

BTC/USD, 4-Hour Chart Analysis

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Bitcoin has been trading around the key $10,000 level all day long, and, so far, a clear break-down has been averted. The short-term momentum indicators are now in neutral territory regarding the most valuable coin, and that could mean that a bottom is close, and investors should already add to their holdings here. Further strong support is found between $9000 and $9200, while targets are ahead at $11,300, $13,000, and $14,250.

XMR/USDT, 4-Hour Chart Analysis

Correlation between the majors has increased during the sell-off, but there are still clear outperformers and laggards, adding to the bullish case. Monero remains among the strongest coins from a technical perspective, trading right at the lower boundary of the bullish consolidation pattern, with the $280 price level holding up for now. The coin faces strong resistance near $300 and $335, but we expect the uptrend to continue with the next target being ahead at $400, while further support is found at $240.

(more…)

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 113 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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