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Week in Review

Week in Review: South Korea Triggers Crypto Meltdown; Stock Rally Reaches Epic Proportions

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It was a roller coaster week for cryptocurrencies, as investors misread South Korea’s aim to regulate the market as an all-out ban on crypto exchanges. Meanwhile, U.S. stocks put up huge gains as earnings season kicked off.

Commodities rallied on a weak U.S. dollar, with crude futures climbing above $70 a barrel for the first time in three years.

Cryptocurrencies Plunge as South Korea Mulls New Regulations

Cryptocurrencies suffered a brisk selloff on Thursday on reports that South Korea was considering new reforms to stamp out speculation from the market. Investors had initially believed that regulators were looking to ban crypto exchanges all together. It would later surface that the government was actually looking to ban anonymous trading and ensure banks do not settle unverified cryptocurrency transactions.

Local media group Yonhap News agency provided more clarity on the proposed legislation:

“Under the new measure, only real-name bank accounts and matching accounts at cryptocurrency exchanges can be used for deposits and withdrawals, while the issuance of new virtual accounts to cryptocurrency exchanges will be banned.”

The cryptocurrency market briefly fell more than $100 billion on Thursday, as investors exited their bitcoin and altcoin positions. At one point, all but five of the top 100 cryptocurrencies were trading in the red, based on data provided by CoinMarketCap. (It’s important to note that CoinMarketCap now excludes South Korean exchanges from its daily volume and pricing data.)

Markets were in recovery mode on Friday, with the total coin value climbing back above $711 billion.

Stocks are Sizzling as Earnings Season Begins

Wall Street put up huge gains this week, as the major indexes closed at new records in four of five sessions. This culminated in back-to-back 200-point gains for the Dow Jones Industrial Average.

On Friday, the blue-chip index closed at 25,803.19, with all but six of its 30 components registering gains.

The broader S&P 500 Index rose 0.6% to 2,786.24. Meanwhile, the Nasdaq Composite Index added 0.7% to close at 7,261.06.

With the most recent gain, the major indexes have added between 4.2% and 5.2% since the new year.

Interestingly, the CBOE VIX Volatility Index has increased in six of the last seven weeks. The so-called “fear index” closed at 10.16. Despite the recent string of gains, it’s still too early to conclude whether volatility is making a comeback.

Fourth-quarter earnings season is also off to a good start, with more than two-thirds of S&P 500 companies reporting better than expected profit results, according to FactSet. While only 5% of S&P 500 companies have reported so far, their blended earnings growth rate is 10.2%.

Oil Hits $70

Oil prices extended their recovery over the past five days, as prices rose to their highest levels in three years.

Brent crude for February settlement briefly traded above $70 a barrel in the latter half of the week before settling at $69.88 a barrel on London’s ICE Futures exchange. The West Texas Intermediate (WTI) benchmark for U.S. crude also put up strong gains, eventually settling at $64.48 a barrel on the New York Mercantile Exchange.

Crude markets on Friday were unfazed by U.S President Donald Trump extending sanctions relief to Iran. One of the primary catalysts for oil prices had been the threat of new sanctions on Tehran, which would have likely affected its crude exports.

NAFTA on the Rocks

One of the world’s largest free trade agreements appears to be in limbo after two Canadian government officials said they were increasingly convinced President Trump will exit NAFTA. The North American Free Trade Agreement (NAFTA) has guided continental commerce for more than two decades.

President Trump has called NAFTA a horrible treaty for the United States given the country’s ongoing trade deficits with both Canada and Mexico. It is unclear whether Trump intends to pull the plug on the deal or use it as a bargaining chip.

The sixth and penultimate round of negotiations between Canada, the U.S. and Mexico will take place in Montreal later this month.

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 662 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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Week in Review

Week in Review: Crypto Rally Runs into Resistance as Bitcoin Cash Hard Fork Nears

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Bitcoin fork

Cryptocurrency markets engineered an impressive rally through the midweek, with bitcoin cash and XRP posting massive gains on positive speculation concerning hard forks and business adoption, respectively. Over the past 48 hours, markets have lost a combined $8 billion in value, as profit-taking and overbought resistance tempered growth.

In traditional markets, Wall Street’s bulls re-emerged after a disastrous October selloff, with the S&P 500 gaining 3.5% so far this month. A divided Congress has fueled speculation that the Republicans won’t be able to implement sweeping reforms that could impact big business.

Crypto Rally Softens

The crypto markets were a sea of red Friday, extending a 48-hour retreat that knocked the majors from overbought territory. After gaining as much as 53% week-on-week, bitcoin cash had pared its seven-day advance to 27%, according to CoinMarketCap. BCH was last seen trading at $566, down sharply from a peak near $640 earlier in the week.

XRP also witnessed broad declines in the latter half of the week, paring its seven-day gain all the way down to 9%. The so-called banker’s cryptocurrency is back below $0.5000 at the time of writing.

Bitcoin was late to the BCH-inspired rally but still managed 18-day highs on Wednesday. The largest cryptocurrency by market cap has given back most of those gains and currently resides below $6,400.

The cryptocurrency market cap is currently valued at $212.2 billion, down from highs near $221 billion on Wednesday but well above week-ago levels. Daily trade volumes are back below $14 billion after hitting highs of $17 billion on Wednesday.

Stock-Market Bulls Make Their Return

U.S. stocks made big gains this week, adding to an already impressive November start that has contrasted sharply with the previous month. As of Friday, the large-cap S&P 500 Index was on track for a weekly gain of 3%.

Most of the gains occurred on Wednesday following the U.S. midterm elections, which saw the Republicans widen their majority in the Senate but give up control of the House. A divided Congress, it is believed, could force the Trump administration to compromise on a number of issues ranging from trade to immigration.

Stocks are coming off their worst month in at least seven years as mixed corporate earnings, elevated trade risks and slowing global growth undermined the bull market. The dramatic selloff pushed the major indexes to the brink of overt correction, with the CBOE VIX Volatility Index reaching its highest level in eight months.

Oil Enters Bear Market

Crude prices hastened their decline this week, with the U.S. futures benchmark Friday tracking its tenth consecutive down session on fears that global supplies will offset demand even with Iran sanctions in place.

U.S. West Texas Intermediate (WTI) broke below $60 a barrel Friday for the first time since February and is down 22% from last month’s multi-year high. With the loss, WTI has officially entered bear-market territory, which is defined as a loss of 20% or more from the most recent high.

Members of the Organization of the Petroleum Exporting Countries (OPEC) are meeting in Abu Dhabi this weekend to review current production strategies and decide whether a shift in output levels is warranted. Saudi Arabia and Russia, which is not part of the cartel, have already expressed plans to raise output to account for the loss of Iranian barrels.

The Week Ahead

The hard fork of bitcoin cash is scheduled to take place Nov. 15, with several exchanges already announcing support for the split. BCH holders on Coinbase, Binance and others can expect a one-for-one distribution of the new BCH token relative to their holdings 1-2 hours before the hard fork takes place.

Economic data are also in the spotlight next week, with the U.S. Department of Labor scheduled to report on the latest inflation numbers. The annual consumer price index (CPI) is forecast to reach 2.4% in October, up from 2.3% the month before. Higher inflation all but guarantees that the Federal Reserve will continue raising interest rates in December. The Fed implied as much Thursday when it voted to keep interest rates on hold but acknowledged broad improvements in the labor market.

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 662 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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Week in Review

Week in Review: Institutions Pivot to Crypto and Tron Outshines Its Peers

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After a noticeable setback on Monday, cryptocurrency markets stabilized later in the week as bitcoin returned to its predictable trading range and major altcoins pared losses. The institutional pivot toward crypto was perhaps the biggest newsmaker of the week. Not only are there signs that Goldman Sachs may finally launch a bitcoin trading operation, fellow Wall Street bank Morgan Stanley heralded cryptocurrency as a “new institutional asset class.”

Institutions Flocking to Crypto?

As Hacked reported this week, Goldman Sachs could be nearing the launch of a new bitcoin trading product, with early reports indicating a limited rollout of the new offering. According to The Block, Goldman has already signed up new customers for a non-deliverable forward product that will provide cash-settled exposure to bitcoin.

While Goldman appears to still be on the fence about bitcoin, Morgan Stanley issued a bold statement earlier this week declaring crypto to be the new asset class for institutional investors. In a report titled, “Bitcoin Decrypted: A Brief Tech-In and Implications,” the bank says blockchain technology has made surprise developments in recent years, paving the way for new crypto funds that are making it even easier for investors to enter the market.

Although the bear market is showing little signs of letting up, institutions are beginning to recognize the utility of digital assets and are likely to broaden their involvement in the sector moving forward.

Tron: The Standout Performer

Tron’s TRX token managed to break even during the month of October, defying a broad market downtrend that saw the likes of Ethereum, XRP and bitcoin cash post double-digit percentage losses. As it turns out, Tron’s hype machine is turning out favorable results following several key partnerships and acquisitions being announced.

That being said, Justin Sun was recently the center of controversy yet again after the Tron founder teased another high-stakes partner. That “partner” turned out to be Baidu, one of China’s largest cloud computing companies. However, as CCN reported, Tron is just a client of Baidu and not a partner in the conventional sense of the term.

While truth twisting appears to be the norm for Sun, his project is gaining steam. One of Tron’s largest decentralized applications, TRONbet, announced first-week payouts in excess of 300 million TRX. According to Tron’s official website, the platform has onboarded dozens of decentralized applications since launching the Tron Virtual Machine.

TRX recently secured a listing on CoinSuper, a Hong Kong-based digital currency exchange, a move that induced heavier than usual volatility for the token. As Hacked reported on Thursday, TRX’s sudden and sharp rally followed by an equally large drop has all the characteristics of a pump-and-dump.

Relief Rally on Wall Street

After their worst month in seven years, U.S. stocks are rising again thanks to a series of positive earnings calls and signs of a potential breakthrough on the U.S.-China trade rift. Bargain hunters have also rushed in to snatch up tech stocks pummeled by the month-long correction.

Investor sentiment was lifted on Thursday by a tweet from U.S. President Donald Trump, who said he had a long, productive dialogue with Chinese counterpart Xi Jinping. Both sides are attempting to bridge the gap on trade ahead of a face-to-face meeting in Buenos Aires, Argentina later this month. The Trump administration is pushing to get a new trade deal done by early December and a failure to do so would lead to new tariffs being issued.

Q3 is shaping up to be another positive quarter for U.S. earnings despite several disappointing results. As of last Friday, more than three-quarters of S&P 500 companies had reported better than expected profit results. More than half said third-quarter sales were better than expected.

The Week Ahead

From the perspective of trade volume and volatility, crypto markets remain on ice. Investors’ collective lethargy is unlikely to let up any time soon as debates over securitization and regulation continue to swirl. A lack of new buyers in the market will keep prices subdued until new fundamental developments inspire capital flows back into the crypto space. At present, there’s no sign of that emerging.

That being said, long-term holders of bitcoin have grown accustomed to longer market cycles. After all, the last bear market lasted several years. The difference this time is there are more people watching and more users invested.

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 662 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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Week in Review

Week in Review: Volatility Shifts from Cryptocurrencies to Stocks as Selloff Deepens

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Cryptocurrencies have weathered yet another turbulent week in global finance, as stocks, bonds and currencies resumed their volatile trading patterns. The digital asset class led by bitcoin has proven immune to the cocktail of forces dragging down global equity prices. It remains to be seen whether this unique price independence will make digital assets a more trusted safe haven in the future.

In the meantime, U.S. stocks have entered correction territory, Chinese stocks are in a bear market and rising bond yields are making it more difficult to justify risk-on behavior.

Bakkt: Circle Your Calendars

After much anticipation, the Intercontinental Exchange (ICE) has finally announced a date for its forthcoming cryptocurrency trading platform. Bakkt will launch on Dec. 12, giving traders access to physical bitcoin futures contracts. The new product is called the Bitcoin (USD) Daily Futures Contract, and will quote prices to two decimal places.

Crypto markets were largely unaffected by the news, just as they shrugged off the initial Bakkt announcement during the summer. The crypto market capitalization this week fluctuated between $207 billion and $212 billion, with trade volumes falling 15% over that stretch. Bitcoin’s daily trade volumes haven fallen to the lowest level of the year, with a closely-watched volatility tracker approaching fresh 18-month lows.

XRP was in the news this week after the New York Financial Services Department granted Coinbase the right to custody the digital asset. Nexo, a crypto lending platform, also announced it will start accepting XRP as collateral on all loans. The XRP price peaked at two-week highs Tuesday before backtracking in later sessions.

Stocks Extend Selloff

Global equity markets experienced another massive selloff this week, as concerns over economic growth and corporate earnings pushed investors into risk-off mode. Wall Street was at the center of the storm, with the S&P 500 and Dow Jones erasing gains for the year. The technology-driven Nasdaq Composite Index plunged 4.4% on Wednesday, its biggest single-day drop since 2011.

Although markets recovered on Thursday, the gains weren’t enough to offset the midweek slump. Markets were on track for another huge loss on Friday as volatility approached new eight-month highs.

Chinese stocks extended their slide at the end of the week, with the Shanghai Composite Index and Hang Seng Index finishing lower. The Shanghai benchmark is down nearly 22% this year.

China-U.S. Stalemate

As the International Monetary Fund (IMF) recently warned, the global economy is bracing for a broad pullback as China and the United States engage in a bitter trade dispute. The tariff war will reduce global growth by at least 0.2 percentage point in the next two years, with much of the impact concentrated in the two largest economies. However, China’s economic cooldown is occurring even faster than expected, as demonstrated by the latest GDP reading. Last week, Beijing reported an annualized growth rate of 6.5% in the third quarter, the slowest since the financial crisis.

Despite the gloomy forecast, the U.S. economy appears to be growing above-trend under President Trump. On Friday, the Commerce Department reported that consumer spending powered the U.S. economy to an annual growth rate of 3.5% last quarter. Analysts surveyed by The Wall Street Journal projected annual growth of 3.4%.

President Trump and Chinese counterpart Xi Jinping are expected to meet in November at the Group of 20 Summit in Buenos Aires, Argentina. The South China Morning Post reports that both sides have resumed working dialogue after months of silence, a sign that negotiations have resumed.

The Week Ahead

Cryptocurrencies continue searching for their next major trading catalyst. As we’ve seen before, a prolonged period of lateral moves is usually accompanied by a sharp dip in prices. Speculators should therefore brace for a sudden downshift if trade volumes remain low and upside remains capped.

Corporate earnings, monetary policy and U.S. nonfarm payrolls will all be in the headlines next week. The start of November is usually associated with the best six-month stretch for U.S. equities. The so-called “Halloween Indicator” tells traders to buy equities after Oct. 31 and hold them until May for maximum returns. It remains to be seen whether this historical bellwether applies to the current climate.

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 662 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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