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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 606 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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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-day 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 606 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Weekly Forecast: Crypto Rally Has Legs as Bitcoin Enters Bullish Territory

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Could this be the week that cryptocurrencies shake off the bearish headwinds? A look at bitcoin’s price action suggests that a more sustained recovery may be afoot. The leading digital currency by market capitalization led a convincing breakout on Saturday and has now recovered 22% from last month’s swing low.

The debate over bitcoin exchange-traded funds (ETFs) is also expected to heat up after Labor Day, as the U.S. Securities and Exchange Commission (SEC) prepares to deliver a verdict on a promising proposal by VanEck and SolidX. Although a verdict isn’t expected until Sept. 30, speculation will continue to divide investors in the coming weeks. Markets largely shrugged off the SEC’s wholesale rejection of nine bitcoin ETFs nearly two weeks ago.

Bitcoin’s Next Move

Bitcoin rose to fresh one-month highs on Saturday as price action confirmed a bullish crossover for the digital asset. The crossover between the 50-day moving average and 200-day MA suggests that the bulls are in control of the market, at least in the short term. The gains were not only technically significant, they defied expectations of a bigger reversal following last Thursday’s sudden breakdown (BTC briefly entered into overbought territory after initially crossing $7,000).

On Sunday, the bitcoin price clocked new monthly high of $7,429.20 on Bitfinex. Trading volumes on the exchange surged to 40,743 BTC, which was more than double the levels observed just 24 hours earlier. Bitcoin’s total market turnover on Sunday was 614,828, which was equivalent to $4.4 billion, according to CoinMarketCap.

Bitcoin is clearly charting a higher path, but could run into resistance as overbought conditions materialize. BTC’s relative strength index peaked at 70 on Saturday and has since fallen back to the mid-60s. Bitcoin’s recent performance suggests that future gains will likely be a slow grind rather than the double-digit growth that accompanied previous bull markets.

The contrarian view, which was recently expressed by Michael Moro of Genesis Trading, suggests that bitcoin was still vulnerable to a bearish reversal, possibly down to the $6,000 range. In Moro’s view, the key to bitcoin’s continued growth is how well price can hold $7,100.

“What you need to see is the less violent moves of 5% up, 10% up, and a slow and steady growth across the exchanges,” he said, according to CCN.“What I also think is important is I think the market now understands that the SEC’s ETF approval isn’t any time soon.”

Where Bitcoin Goes, Other Cryptos Follow

Cryptocurrencies have more or less moved in lockstep with bitcoin in recent months, a trend that is expected to continue so long as BTC controls more than half the market cap. It therefore comes as no surprise that altcoins and tokens are testing monthly highs following bitcoin’s bullish reversal.

The combined value of digital currencies peaked near $240 billion on Saturday, the highest in a month. At the time of writing, the market was valued at $236 billion, which is $47 billion higher than last month’s low.

EOS, IOTA and Monero – coins that were extremely oversold amid the latest downturn – have been among the biggest gainers of the past week. Bitcoin cash has also exploded higher amid uncertainty over a potential hard fork. As Hacked reported on Saturday, there are many moving parts to the controversy, “including BitcoinABC, which is a “full node implementation of the Bitcoin Cash protocol,” Craig Wright (who once claimed to be Satoshi Nakamoto) and his company nChain, which is behind Bitcoin SV (Satoshi’s Vision), which is designed for “miners who support Bitcoin’s original vision.”

The Week Ahead

The following is a high-level overview of the major market-moving events this week.

Monday

The World Blockchain Forum will commence on Monday in London for a three-day summit focused on crypto investments and initial coin offerings. In South Korea, Mass Vehicle Ledger (MVL) will release the details of its participation in a government project focused on smart mobility.

Tuesday

The Reserve Bank of Australia (RBA) will deliver its latest policy decision on Tuesday. The central bank is widely expected to keep interest rates on hold at 1.5%.

In North America, the Institute for Supply Management (ISM) will release a closely-watched report on U.S. manufacturing PMI.

Wednesday

Wednesday will be an active day in the world of crypto. Dogecoin developers are scheduled to livestream of a demonstration of their Dogethereum demo Wednesday. Separately, VeChain is scheduled to announce a new partnership with a major automaker.

Digital currency exchange Bittrex is also expected to roll out Cardano-to-fiat listing. Beginning Wednesday, investors will be able to trade ADA/USD.

Finally, the Crypto Finance Conference in Half Moon Bay, California will begin on Wednesday.

In traditional markets, the Bank of Canada will deliver a policy verdict on Wednesday.

Thursday

Cardano is expected to update its closely-watched development roadmap on Thursday. No further information has been provided at this time. The IOTA Foundation will also host a meetup in New York.

In economic data, U.S. factory orders, manufacturing/services PMI and weekly jobless claims will make headlines.

Friday

Traders may want to keep a close eye on the ETHGlobal Hackathon in Berlin on Friday. The Hackathon will feature workshops and public forum discussions on the state of Ethereum and blockchain.

In traditional markets, all eyes will be on the monthly U.S. nonfarm payrolls numbers, which will be released at 8:30 a.m. ET.

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 606 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Weekly Forecast: End of the Selloff? Bitcoin Leads Crypto Market Upswing

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The bitcoin market has exhibited unusual calm in recent days, with the technical charts confirming a strong pick-up in momentum and price action that could pave the way for a short-term breakout. As we’ve seen before, where bitcoin goes, the broader market will soon follow.

At the time of writing, bitcoin owns 53.7% of the overall cryptocurrency market capitalization, according to CoinMarketCap. Bitcoin’s dominance rate peaked around 54.5% earlier this month.

Bitcoin’s Next Move?

The bitcoin price made a convincing break higher on Saturday, offering further evidence that bear market pressures were eroding. The leading digital currency traded as high as $6,799.70 on Bitfinex, which is roughly $100 shy of last Tuesday’s peak. (As Hacked reported, BTC received artificial stimulus on Tuesday after Bitmex, a popular trading platform for derivatives, experienced a temporary shutdown.)

At the time of writing, bitcoin is holding steady just below $6,690, according to Bitfinex. The bulls are eyeing the 200-day moving average as the next major resistance. That level is currently situated just above $7,000.

Bitcoin’s slow grind higher has been accompanied by unusually low volatility, with market prices fluctuating within a narrow $200-$300 range. At one point Friday, BTC volatility was on track for its lowest level of the year.

SEC to Review Recently Rejected Bitcoin ETFs

The U.S. Securities and Exchange Commission (SEC) has announced it will review the wholesale rejection of nine bitcoin exchange-traded funds (ETFs) submitted by Direxion, ProShares and GraniteShares. The agency on Aug. 22 declared that none of the proposed funds addressed its concerns over manipulation and liquidity in the bitcoin futures market.

According to several analysts, including CNBC’s Brian Kelly, the SEC is moving closer to approving its first bitcoin ETF.  So far, the fund that is most likely to be approved is the VanEck SolidX Bitcoin Trust. Unlike its predecessors, the VanEck fund will be backed by physical bitcoin and insured against theft.

Earlier this month, the SEC delayed its ruling on the VanEck SolidX Bitcoin Trust until Sept. 30. In the meantime, investors can expect the debate over bitcoin ETFs to remain front and center.

The Week Ahead

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

Monday

The week begins with a report on German business confidence courtesy of the IFO Institute. In the United States, the Chicago Federal Reserve Bank will release the National Activity Index for July. Later in the session, the Federal Reserve Bank of Dallas will report on regional manufacturing conditions.

Tuesday

U.S. economic data will dominate the headlines on Tuesday, beginning with the monthly goods trade balance. Washington’s deficit with the rest of the world is forecast to widen for the month of July.

S&P/Case-Shiller will release the latest indicators on domestic home prices. Separately, the Federal Reserve Bank of Richmond will unveil the August version of its closely-watched manufacturing index.

Wednesday

On the data front, the U.S. government will release the revised estimate of second-quarter gross domestic product (GDP). The preliminary estimate showed annual growth of 4% in the second quarter.

Thursday

In cryptocurrencies, Tron will complete its scheduled upgrade of the Tron Virtual Machine mainnet on Thursday.

In traditional markets, a slew of Eurozone sentiment indicators are on tap for Thursday, including consumer confidence, industrial confidence, economic sentiment and business climate.

The U.S. government will also release the monthly personal income and outlays report, which includes the latest reading on core personal consumption expenditures (PCE), the Federal Reserve’s preferred measure of inflation.

Friday

Bytecoin’s “consensus update” hard fork is expected to occur on Friday. The upgrade will enable users to set dynamic transaction fees, something the Bytecoin team says required “considerable investment in time and energy.”

Separately, Cardano will release version 1.3 of the protocol, which includes network enhancements, code refactoring and upgrades to the Daedalus wallet.

In economic data, China will release a pair of PMI reports covering manufacturing and services industries. Meanwhile, the European Commission’s statistical agency will release preliminary inflation data for the Eurozone 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 606 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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