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Weekly Forecast: Crypto Markets Search for Direction After Plunge; Monetary Policy Remains in Focus

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Cryptocurrencies stabilized over the weekend after a multi-day crash wiped more than $60 billion off market prices. Fallout from the latest bout of crypto carnage will be top of mind this week as investors look to the technical and fundamental indicators for an inflection point. However, finding it may prove difficult given the market’s general apathy as of late toward positive news.

In conventional markets, monetary policy will continue to drive the agenda as the Bank of England prepares to deliver its next interest-rate verdict. A bevy of central-bank speakers, including ECB President Mario Draghi and the Federal Reserve’s Jerome Powell, will be in the headlines throughout the week.

Cryptocurrencies: Bull Market in Jeopardy

As Hacked’s Mate Czer rightly identified Saturday in his long-term analysis, the cryptocurrency market’s upward trajectory is in jeopardy as bitcoin approaches a crucial breakdown and altoins trade below their large-scale consolidation.

Anchored by bitcoin’s price collapse, cryptocurrency prices have faced strong headwinds since the April run-up. Trading volumes during the weekend fell to their lowest levels in over two months. At the time of writing, 24-hour trade volumes had fallen below $10 billion.

Diminished trading activity makes large fluctuations in crypto prices more likely. It also points to subdued buying interest, which is keeping the supply of cryptocurrencies elevated. Without adequate turnover, a sustained rally in prices will prove exceedingly difficult. (As a comparison, the bullish reversal in April saw daily transaction volumes average between $20 billion and $30 billion).

At the time of writing, the cryptocurrency market was collectively valued at $279 billion, down from $320 billion this time last week.

Monetary Policy

The week of June 11-15 proved significant from the perspective of monetary policy as the Federal Reserve hiked interest rates and the European Central Bank (ECB) signaled for the gradual winding down of crisis-era stimulus.

The Bank of England (BOE) will deliver its next policy verdict on Thursday in a vote that is expected to go 7-2 in favor of keeping interest rates on hold. BOE policymakers are juggling a slowdown in economic growth and progress on the Brexit front, which has complicated the outlook on monetary policy.

The European Central Bank’s Mario Draghi is scheduled to deliver speeches throughout the week, where he will have the opportunity to expand on the Governing Council’s decision to end quantitative easing by year’s end.

Economic Calendar

Economic data and monetary policy are in focus over the next five days. Below are the most pressing events from around the world.

Monday

Monetary policy will headline the economic calendar at the start of the week. Federal Open Market Committee (FOMC) members Elizabeth Duke, Raphael Bostic and John Williams are all scheduled to deliver speeches.

Mario Draghi will also deliver opening remarks at the ECB’s Forum on Central Banking in Sintra, Portugal.

Tuesday

The U.S. Commerce Department will report on housing starts and building permits on Tuesday. Housing starts are forecast to climb 4.6% to a seasonally adjusted annual rate of 1.31 million units. Permits, meanwhile, are projected to fall 0.6% to a 1.355 million-unit pace.

Wednesday

Federal Reserve Chairman Jerome Powell is scheduled to deliver public remarks Wednesday just one week after the U.S. central bank hiked interest rates for the second time this year. FOMC members are eyeing two more upward adjustments this year.

Mario Draghi will be participating on an ECB Forum panel in Sintra on Wednesday. Colleague Benoit Coeure will also be participating in a panel on the microeconomics of price and wage-setting.

In terms of economic data, the National Association of Realtors (NAR) will report on U.S. existing home sales Wednesday morning.

Thursday

The Organization of the Petroleum Exporting Countries (OPEC) will coalesce in Vienna, Austria Thursday for its biannual meeting. The Saudi-led regime is widely expected to raise production caps in an effort to retain market share following the yearlong recovery in crude prices.

In monetary policy, the Swiss National Bank (SNB) is scheduled to deliver its interest-rate verdict at 07:30 GMT. No change in policy is expected.

The Bank of England’s rate verdict is due at 11:00 GMT.

U.S. economic data will also be in the spotlight as the Labor Department reports on weekly jobless claims and the Philadelphia Fed unveils its June manufacturing index.

Friday

IHS Markit on Friday will release a bevy of preliminary PMI data for Eurozone members states. The Eurozone Composite purchasing managers’ index, which tracks manufacturing and services activity, is forecast to hold steady at 54.1 for June.

Markit’s flash U.S. Composite PMI is projected to fall to 55.1 in June from 56.6 in May.

North of the border, the Canadian government will report on consumer inflation and retail sales, two high-profile reports that could impact the currency markets.

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 666 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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Weekly Forecast: Crypto Markets Show Poise as Bitcoin Dominance Rate Falls Below 51%

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Low volumes and tight trading ranges characterized the cryptocurrency market this weekend, as major assets consolidated after last week’s sharp recovery. XRP was the notable exception, as prices returned above $0.60 on positive news concerning commercialization and political advocacy.

Traditional markets fared better than expected in September – a historically volatile month for stocks – and appear poised to continue their winning streak as Q4 gets underway. Economic data and high-stakes trade negotiations between Canada and the United States could set the tone over the next five days.

Bitcoin’s Return to Stability

Bitcoin was unable to set new highs over the weekend but maintained its bullish bias after a strong breakout on Friday. As Hacked previously reported, bitcoin’s RIG trend lines show strong upside potential in the near term. Although this doesn’t negate the long-term bear market, it suggests that a re-test of $7,000 is possible in the not-too-distant future.

Despite returning to stability in recent days, bitcoin’s dominance rate has fallen to the lowest level in over six weeks. Bitcoin’s dominance, or the coin’s share of the total market cap, currently sits at 51.1% after previously falling below 51%.

The planned launch of Bakkt in November is expected to generate a greater sense of urgency to enter the market on the part of institutional investors. Bakkt, with full support from Intercontinental Exchange, is also raising the bar on regulated crypto exchange services, which is expected to encourage stronger infrastructure development in the space. These are just some of the talking points investors can expect to come across over the next week.

Altcoins Aim Higher

Bitcoin’s declining market share comes on the heels of major breakouts for leading altcoins such as XRP, XLM and BCH. While these assets continue to trade at a fraction of their record highs, they have generated notable gains in recent weeks. In all these cases, high-profile business developments were the main catalysts for growth.

XRP continues to show the biggest potential for upside as prices crossed $0.61 over the weekend. In doing so, XRP once again briefly overtook Ethereum as the second-largest cryptocurrency by market cap.

Among the three altcoins under consideration, bitcoin cash is the most likely to lose its fizzle. The BCH price spiked suddenly last week after Bitmain revealed the details of its forthcoming initial public offering (IPO).

The altcoin rally has helped cryptoassetd recover nearly $40 billion from the most recent bear market around $186 billion. However, at this stage, a durable rally does not appear to be in the cards. For short term traders, this means extra caution should be observed when entering new positions. For long-term holders, the time is still optimal to add to existing positions.

The Week Ahead

Below is a summary of the major market-moving headlines over the next five days.

Monday

The economic calendar features several reports on Monday, including the final batches of Eurozone September manufacturing PMI. The European Commission’s statistical agency will also report on the latest unemployment numbers for August.

In the United States, the Institute for Supply Management (ISM) will report on manufacturing PMI for September. Separately, the Commerce Department will report on August construction spending.

In the world of crypto, Ripple’s Swell conference in San Francisco will begin on Monday and run through Tuesday. According to the official website, Swell “connects the world’s leading experts on policy, payments and technology for the most provocative dialogue in global payments today.”

Tuesday

Stellar, the world’s sixth largest blockchain, is planning to implement a beta version of its new Lightning Network on Tuesday. Stellar’s developers are planning to take the Lightning Network live Dec. 1.

The Reserve Bank of Australia (RBA) will deliver its next policy verdict on Tuesday. The RBA’s trend-setting interest rate is forecast to remain steady at 1.5%.

Wednesday

Global data flows will headline traditional markets on Thursday. IHS Markit will release the final batch of September PMI figures for key European markets.

In North America, payrolls processor ADP will release an advance estimate of private-sector job creation for the month of September. Separately, ISM will report on U.S. non-manufacturing PMI.

Thursday

Data watchers will be keeping close tabs on the U.S. Labor Department’s weekly jobless claims report. The Department of Commerce will also release the latest report on factory orders.

In crypto news, Cardano is planning to update its closely watched roadmap on Thursday. The Global Blockchain Forum in San Francisco is also scheduled to begin on Thursday.

Friday

U.S. nonfarm payrolls will dominate the headlines on Friday. The economy is forecast to have added 188,000 workers to payrolls in September following a gain of 201,000 the month before. Average hourly earnings, a proxy for wage inflation, is projected to rise 3% year-over-year.

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 666 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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Weekly Forecast: Bitcoin’s Dominance Falls to Six-Week Low as Altcoins Lead Retracement

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After a series of false rallies, technical selloffs and downright manipulation, the cryptocurrency market appears to have made a convincing breakthrough. Over the past five days, cryptoassets have added more than $25 billion in value with coins other than bitcoin doing the heavy lifting. For the first time in months, bitcoin’s dominance rate is declining rather than increasing.

XRP has been the market’s biggest x-factor over the past week as investors rallied behind three major developments: the anticipated launch of the Ripple-backed MoneyTap, forthcoming commercialization of xRapid and a newly announced partnership with PNC. Positive sentiment is now spreading throughout the market, with altcoins like Stellar XLM and Cardano ADA emerging as the weekend’s biggest winners.

While the bulls clearly aren’t out of the woods yet, cryptoassets have recovered more than $40 billion in lost market cap since the most recent trough. Time will tell whether crypto psycho is taking up fundamentals again. If the answer is yes, the tide may be slowly turning.

Altcoins Leading the Way

XRP has gained a staggering 104% over the last seven days, offering convincing evidence that the worst of the downtrend is over. While a similar rally this week appears almost inconceivable, altcoins like XLM and ADA are picking up the slack.

Stellar’s native XLM gained 36% last week and on Sunday briefly overtook EOS as the world’s fifth-largest blockchain. Stellar’s recovery began after the company announced it had acquired Chain, a highly-touted blockchain firm that is championing enterprise adoption of distributed ledger technology. A few days later, UNICEF announced it is accepting XLM for donations and Circle, a Goldman Sachs-funded venture, said XLM will be added to its class of investable assets.

Continued growth in the altcoin and token classes is indicative of a turning tide in the cryptocurrency market. As investors recall, the height of the bull market in January was accompanied by a large-scale decoupling of bitcoin and the rest of the market. .

Bitcoin Regains Poise

Despite being outshone by its altcoin peers, bitcoin has also made tangible progress over the past three days. The leading digital currency crossed the 50-day moving average on Friday en route to multi-week highs. A bullish crossover of the 200-day MA is still a ways off, though the momentum charts indicate that a sustained rally is likely.

Bitcoin shot up on Friday after the U.S. Securities and Exchange Commission (SEC) announced it would seek further comment on the closely watched VanEck SolidX Bitcoin Trust. This essentially means that a decision on the ETF could drag on for several months.

The SEC so far has reviewed more than 1,400 comments related to the application but has raised 18 key issues that must be addressed before a decision is reached. Many leading analysts, including Hacked’s own James Waggoner, believe that a decision is unlikely before February.

The Week Ahead

Below is a rundown of this week’s major events from the worlds of crypto and traditional markets.

Monday

The economic calendar features a few potentially market moving events on Monday. The CESifo Group will release its monthly report on German business expectations. In the United States, the Chicago Federal Reserve will release the National Activity Index for August and the Dallas Fed will report on regional manufacturing conditions for the month of September.

In crypto news, High Performance Blockchain (HPB) – the “EOS of China” – will launch its mainnet on Monday.

Tuesday

The Connected World Summit in London will kick off on Tuesday with 2,500 attendees, 200 speakers and 60 exhibitions. The event, which is sponsored by Microsoft, Bosch, Huawei and others, explores themes related to the “smart economy,” of which blockchain technology plays an important role.

In traditional markets, the Bank of Japan (BOJ) will release the minutes of its most recent policy meeting on Tuesday. From a data perspective, reports on U.S. housing costs will make headlines in North American trading.

Wednesday

The Federal Reserve will deliver a policy verdict on Wednesday following its two-day meeting in Washington. Fed officials are widely expected to raise interest rates for the third time this year and could possibly signal for an additional hike in December. The official rate statement will be released at 2:00 p.m. ET. It will be accompanied by a quarterly summary of economic projections covering GDP, unemployment and inflation.

Thursday

The Fed isn’t the only central bank scheduled to deliver a rate verdict this week. The Reserve Bank of New Zealand (RBNZ) is also expected to deliver a monetary policy decision on Thursday.

In economic data, the European Commission’s statistical agency will release a bevy of sentiment indicators on Thursday, including: services, consumer confidence, industrial confidence and economic sentiment. Germany will also release final inflation numbers for the month of September.

The U.S. government is scheduled to deliver final GDP figures for the second quarter. Reports on durable goods orders and the goods trade balance are also on deck.

Friday

The economic calendar features several market-moving events on Friday. Action begins in Asia with the Caixin China manufacturing PMI. From there, investors will react to final Eurozone CPI data as well as revised second-quarter GDP estimates from the United Kingdom.

Meanwhile, the U.S. government will release the closely watched personal incomes and outlays report, which contains the most up-to-date reading of core personal consumption expenditures (PCE). The core PCE index is the Fed’s preferred measure of inflation.

Friday is also the final trading day of the month, which means expiration of CME’s bitcoin futures contract. Trading of the September contract terminates at 4:00 p.m. GMT.

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 666 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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Weekly Forecast: Cryptocurrencies – Stable Recovery or Dead Cat Bounce?

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After a volatile couple of weeks, the cryptocurrency market is showing signs of revival. Bitcoin and Ethereum have been the main catalysts for the recovery, though for entirely different reasons. Bitcoin is regaining its stability – a recently acquired status – while Ethereum appears to have stemmed a massive decline that was driven almost entirely by sentiment. Ethereum’s return from the abyss has been especially noteworthy, with the second-largest coin by market cap pushing toward a key resistance barrier.

That said, the recent recovery only qualifies as a minor counter-trend to the bearishness that has gripped the market since early August. In terms of market capitalization, cryptocurrencies are down a third from the peak of late July. The market is also 16% lower than it was at the beginning of September.

Bitcoin Stabilizes

Bitcoin has returned to a stable trading range over the past week, a sign that the worst of the downtrend had passed. As Hacked reported Saturday, bitcoin’s sharp and sudden reversal earlier this month was likely initiated by a prominent whale liquidating a portion of his holdings. A prominent bitcoin holder had moved 110,000 units of BTC and BCH from multiple wallets prior to the price collapse. It is believed that 14% of that fortune was transferred to Bitfinex and Binance.

Absent any new whale spottings, bitcoin is likely to continue higher this week. BTC has crossed the 50-period moving average, according to the 4-hour chart, and is now testing the $6,600 resistance. Bitcoin must overcome this level to avoid a double-top formation, which is normally viewed as a bearish indicator.

Ethereum Rebounds

The rollercoaster that is Ethereum shifted into higher gear last week, with prices surging 30% from their bear market lows. The developer’s cryptocurrency not only returned above $200, it set its sights on a key technical resistance that could pave the way for bigger short-term rallies.

Since peaking around $227, ether’s price has returned to the $220 region. The first major resistance test is located at $235, followed by a stronger barrier near $260.

Concern over scalability, economic abstraction and the long-awaited ICO extinction event have all curbed appetite for ether in recent weeks. Vitalik Buterin, Ethereum’s co-founder, has also indicated that cryptos have likely neared their ‘ceiling‘ in terms of growth. Ether co-founder Joseph Lubin recently countered Buterin’s assertion by claiming that we are only at the start of an exponential growth curve.

The Week Ahead

The following is a high-level review of this week’s major major market-moving events.

Monday

The Block Seoul Global Crypto Investor Summit formally begins on Monday, attracting 1,500 people and 500 media outlets from around the world. Wikipedia founder Jimmy Wales and former CIA director Michael Hayden are scheduled to speak.

Digital currency Tezos will launch its long-awaited mainnet on Monday. The $1 billion blockchain has catapulted into the top-30 cryptocurrencies by market cap, partly in anticipation of the mainnet launch.

BitRewards, the first blockchain-based loyalty platform, will roll out support for Amazon on Monday.

Tuesday

The people behind Lisk will hold a live “Ask Me Anything” session on Reddit between 4-6 p.m. CEST. Meanwhile, the University Congress Center in Istanbul, Turkey will host a blockchain competition involving Binance Coin, Stellar and five others.

Wednesday

In cryptocurrencies, the expiration of the CBOE XBT bitcoin futures contract will occur on Wednesday. Waves’ CEO Sasha Ivanov will also hold a Q&A session on smart contracts, which could get picked up by crypto media sources.

In traditional markets, European Central Bank (ECB) President Mario Draghi will hold a speech at 13:00 GMT. Central-bank speakers are closely watched by investors for clues about future monetary policy.

Thursday

In the blockchain world, BitRewards will suport BIT token payments Shopify and WordPress beginning on Thursday.

On the policy front, the Swiss National Bank is expected to deliver an interest rate verdict. No change in monetary policy is expected at this time.

Data watchers will be keeping close tabs on U.K. retail sales and U.S. existing home sales.

Friday

The BitShares Blockchain Foundation will host BitFest Amsterdam on Friday, a three-day event that brings community members together.

On the data front, IHS Markit will release a pair of PMI reports covering U.S. service and manufacturing industries. The Composite purchasing managers’ index will give a holistic account of the broader economy.

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 666 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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