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Weekly Forecast: Cryptocurrencies Look for Direction After Turbulent Month

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A wave of selling pressure has swept the cryptocurrency markets this month, casting a shadow over April’s bullish reversal. Though cryptos have declined for three consecutive weeks, downside pressure appears to be slowly fading as investors await the latest developments on the regulatory and adoption fronts.

Among correlated assets such as stocks, bonds and commodities, attention will be paid to ongoing geopolitical developments, free trade negotiations and economic data.

Cryptocurrencies: The End of the Downtrend?

Proponents of the price manipulation theory believe we may be nearing the end of the crypto-market downtrend as large investors continue to dump their oversized holdings of bitcoin.

This view is corroborated by the fact that the last three downtrends – starting in December and continuing to this day – have been accompanied by higher lows and shallower recoveries. At the same time, trading volumes are thinning with each major correction. Case in point: cryptocurrency trade volumes fell on Sunday to their lowest in six weeks.

That said, bitcoin is currently eyeing support in the high $6,000 range after briefly falling below $7,300 on Sunday. Analysts such as Willy Woo believe that a further breakdown below $6,000 is possible before we see any major rebound. Much of that will depend on bitcoin’s ability to hold the critical $6,500 support level, which the market has failed to breach since early February.

The cryptocurrency market bottomed at $320 billion last Thursday. A stalled weekend recovery knocked prices back toward $326 billion from a high near $340 billion.

Usually, signs of institutional adoption – like the ones we’ve seen repeatedly over the past three weeks – are a boon to crypto assets. However, it appears as if wider institutional adoption has already been priced into the market (i.e., “buy the rumor, sell the fact”). This suggests traders are now looking for tangible evidence of a new product or service being launched before they rally behind bitcoin like they did in December.

In the author’s view, the actual launch of Goldman Sachs’ bitcoin operation could provide that spark.

Geopolitics in Focus

A meeting between U.S. President Donald Trump and North Korea’s Kim Jon-un is back on as talks resumed in the wake of last week’s diplomatic breakdown.

The planned summit, which is scheduled to take place in Singapore next month, was salvaged after South Korean leader Moon Jae-in held an unannounced meeting with his northern counterpart on Saturday. According to Moon, the North Korean leader has “again made clear his commitment to a complete denuclearization of the Korean peninsula.”

Stock markets are likely to respond favorably to the developments, as easing geopolitical tensions tend to boost risk-on assets. Investors should pay attention to futures trading in the coming hours for an indication of how the market will perform.

Economic Calendar

In terms of economic data and other key developments, below is a rundown of everything you need to know for the next five days.

Monday

U.S. stock markets are closed for Memorial Day.

No major data releases are expected.

Tuesday

The Dallas Federal Reserve Bank will release its monthly manufacturing business index, while S&P/Case-Shiller will report on U.S. house prices.

Meanwhile, New Zealand’s central bank will release its Financial Stability Report.

Wednesday

A deluge of economic data will make its way through the financial markets Wednesday, beginning in Europe with German retail sales, unemployment and consumer inflation. Europe’s largest economy likely saw a pickup in annual inflation for May, with analysts forecasting year-over-year growth of 1.9%.

Meanwhile, the European Commission’s statistical agency will report on a series of economic and business sentiment indicators.

Shifting gears to North America, the U.S. Commerce Department will release revised first-quarter GDP data. The ADP Research Institute will also release its monthly report on private-sector employment.

In terms of monetary policy, the Bank of Canada will deliver a verdict on interest rates early Wednesday. Canada’s benchmark interest rate is forecast to hold steady at 1.25%.

Thursday

Reports on Eurozone consumer prices and unemployment will headline European trading on Thursday. The consumer price index (CPI) for the 19-member euro area likely rose 1.6% annually in May compared with 1.2% the previous month.

In the U.S., the Department of Commerce will issue its monthly report on personal income and outlays. The data set also includes core personal consumption expenditures (PCE), the Federal Reserve’s preferred measure of inflation. The core PCE rate likely strengthened to an annual rate of 2% for April from 1.9%.

North of the border, the Canadian government will release first-quarter GDP figures.

Friday

U.S. nonfarm payrolls will headline Friday’s session, with the May report expected to show the creation of 185,000 jobs. Unemployment is projected to hold steady at 3.9% and average hourly earnings likely picked up to 2.7% annually from 2.6%.

Separately, the Institute for Supply Management (ISM) will report on U.S. manufacturing PMI. The May reading is expected to print 57.7 on the PMI scale. Anything above 50 signifies expansion.

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 555 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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Market Overview

Market Update: U.S. Stocks on Verge of Longest-Ever Bull Market

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U.S. stocks notched their fourth consecutive advance Tuesday, as the S&P  500 Index approached its longest-ever bull market.

S&P 500 Approaches Record

All of Wall Street’s major indexes booked solid gains, with the S&P 500 Index touching a new intraday high. The large-cap average reached a high of 2,873.23, which would have marked the best close on record. It would later settle at 2,862.96 for a gain of 0.2%.

Seven of 11 primary sectors tracked by the index finished in positive territory, with indystrials and consumer discretionary shares leading the market higher.

The Dow Jones Industrial Average rose 63.60 points, or 0.3%, to 25,822.29, its highest since January.

A strong performance in technology pushed the Nasdaq Composite Index higher by 0.5% to 7,859.18.

A measure of implied volatility known as the CBOE VIX traded near two-week lows, signaling renewed calm on Wall Street. The so-called “fear index” touched a low of 12.09 on a scale of 1-100 where 20 represents the historic average. It would eventually settle at 12.86.

The Bull Market Endures

According to The Wall Street Journal, Wednesday will mark 3,453 days since the S&P 500 Index reached a low of 666. In doing so, it will surpass the 1990-2000 bull market as the longest in history.

While stocks have more or less broken even over the past seven months, they have shown remarkable growth since Donald Trump won the presidency in November 2016. The latest leg of the bull market was spurred on by corporate tax cuts, strong quarterly earnings and optimism that Trump’s economic policies will invigorate long-term investment and growth. This comes despite growing concerns tied to free trade, geopolitics and rising inflation.

Although stocks aren’t cheap, some analysts believe the bull market will continue on for several years into the future. Chief among them is Tom Lee of Fundstrat Global Advisors, who told CNBC back in January that the bulls have another decade to control the market.

Bitcoin Shows Poise

Bitcoin continued to trade in a narrow range on Tuesday, as the leading digital currency came away with an even larger share of the overall market. The bitcoin price touched a high of $6,526.20 on Bitfinex. It would later consolidate at $6,429 for a gain of 2.5%. At current prices, BTC accounts for 53% of the entire cryptocurrency market capitalization.

The leading cryptocurrency has held above $6,000 throughout much of the recent downturn, a strong sign that a new price bottom has formed.

Overall trading volumes for BTC averaged $3.8 billion on Tuesday, down sharply from last week’s levels. As Hacked previously reported, bitcoin’s daily volume needs to exceed $4 billion for a sustained rally to materialize.

The broader cryptocurrency market edged slightly lower on Tuesday, with Ethereum, EOS and bitcoin cash all posting declines. The poor performance was associated with a marked drop in trading volume, as total market turnover fell below $11 billion for the first time in two weeks.

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 555 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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Market Overview

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Hi Everyone,

Here’s a graph for you. It certainly impressed me when I saw it yesterday.

It shows how even though the price has declined since the beginning of the year, eToro clients have not only maintained their positions, but are actually increasing their bitcoin holdings.

The graph was inspired by a recent article in which our CEO and founder Yoni Assia stated that…

After I posted the graph on Twitter, one user was quick to point out that there are many more buyers now and so the increased amount of holdings actually shows that each individual investor is holding less.

While that may be true, it actually serves to strengthen the case that demand is holding strong. If more people want to hold bitcoin, that grows the network, even if they’re holding it with less allocation in their portfolio.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Market Manipulation
  • Dollar Pullback Relief

Please note: All data, figures & graphs are valid as of August 21st. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Whatever you feel about him, President Donald Trump’s garish rhetoric has been great for traders who like volatility. This latest headline is particularly punchy…

Just as China and the United States have started preparing for some fresh rounds of trade talks, President Trump, true to his style, has spiced things up by placing things off kilter in a way that now seems quite normal.

This comes after a report from Trump’s own administration published in April stopped short of making any such labels. In fact, the USA hasn’t officially labelled any country as a currency manipulator since 1994.

Looking back since the start of 2017, if either China or the EU have been trying to deliberately weaken their respective currencies, they haven’t been doing a very good job of it.

Dollar Pullback

Zooming in a bit to the movements of the day…

The US Dollar is finally showing some signs of weakness, which is providing some much-needed relief for the rest of the markets. In fact, it seems like investors are even ready to take on a bit more risk today as the stocks climb and the precious metals have bounced off the lows.

On the left, we can see the US Dollar Index, which seems to have peaked last Wednesday. On the top right is the NASDAQ, which is toying with it’s all-time high and on the bottom right is gold’s retracement off the long-term lows.

Crypto Section

Let’s leave this section deliberately blank for today. We’ve shown the chart about Bitcoin’s stable range too many times to count.

As mentioned, a steady price range is healthy for Bitcoin as it increases it’s use as a stable store of value and gives developers of the network more time to build the infrastructure that will be needed going forward.

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.

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.

Best regards,
Mati Greenspan
Senior Market Analyst

Connect with me on….

eToro: @MatiGreenspan | Twitter: @MatiGreenspan | LinkedIn: MatiGreenspan | Facebook:MatiGreenspan

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 122 rated postsSenior Market Analyst at Etoro.com.




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Market Overview

Market Update: U.S. Stocks Rise on China Trade Optimism; Bitcoin Holds Firm as Volatility Plummets

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U.S. stocks advanced Monday, with the S&P 500 inching closer to record highs as investors held onto hopes for an easing of the trade war with China.

Stocks Rise

All of Wall Street’s major indexes recorded gains in early-week trading, with the S&P 500 Index coming within half a percentage point of record highs. The large-cap average eventually settled at 2,857.05, having gained 0.2% from the previous close.

The Dow Jones Industrial Average rose 869.37 points, or 0.3%, to close at 25,758.69, its highest since January.

The technology-focused Nasdaq Composite Index advanced 0.1% to 7,821.01.

Shares tied to primary industries were among the best performers Monday. The S&P 500’s energy index rose 0.6%, while industrials and materials rose at least 0.7%.

A measure of implied volatility known as the CBOE VIX edged slightly lower on Monday to reach its lowest level in ten days. The so-called “fear index” fell 1.4% to 12.46 on a scale of 1-100 where 20 represents the historic average.

Path of Least Resistance

Wall Street’s path of least resistance is higher following news that the U.S. and China are looking to rekindle trade negotiations later this month. As Hacked reported Friday, Washington and Beijing are plotting a road map for resolving their lingering trade dispute.

Markets are striking a more optimistic tone in the wake of yet another solid earnings quarter. Low trade volumes are also expected to keep the upward momentum on track heading into next month’s Labor Day weekend.

In terms of upcoming events, the Federal Reserve on Tuesday will publish the transcript of its most recent policy meeting, where officials voted to keep interest rates on hold. Later this week, global finance leaders will arrive in Wyoming for the annual Jackson Hole Symposium.

Bitcoin Holds Firm

The bitcoin price continued to trade in a narrow range on Monday, though the technical charts showed greater potential for upside. The leading digital currency traded at $6,452 on Bitfinex after hitting a high of $6,524. At current values, bitcoin owns 52.2% of the total cryptocurrency market cap.

In other news, USDT has moved into eighth spot on the market cap rankings after Tether, its issuing company, printed $415 million worth of the stablecoin this month. USDT now has a market capitalization of $2.7 billion, leapfrogging Cardano’s ADA coin.

The cryptocurrency market’s combined value on Monday was $214.2 billion, little changed compared with 24 hours ago. Trade volumes hovered above $11.2 billion, which was consistent with Sunday levels.

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 555 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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