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Weekly Forecast: The Search for Volume Continues as Bitcoin Eyes Breakout

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Dogged by weak trading volumes, regulatory constraints and a lack of direction, cryptocurrency prices have failed to make headway over the past two months. The search for volume continues over the next seven days as bitcoin’s bulls eye a potential breakout following the successful defense of $6,000 – a key technical and psychological threshold.

Economic data, corporate earnings and a high-profile meeting between two heads of state will influence traditional markets this week.

Cryptocurrency Market in Search of Direction

After posting their first weekly gain in a month, cryptocurrency prices were back on the defensive last week as tepid trading volumes and a lack of momentum drove investors to the sidelines.

The bulk of the declines last week occurred between Monday and Tuesday, with the total market capitalization falling more than $20 billion over that brief stretch. For the remainder of the week, bitcoin and its altcoin counterparts held within a relatively narrow range as trading volumes continued to drop. On Saturday, volumes reached their lowest levels of the year, according to CoinMarketCap.

The cryptocurrency market has been capped below $300 billion since June 10. However, the downturn appears to have reached its climax following bitcoin’s repeated defense of a key psychological marker.

Bitcoin’s price is making headway toward $6,400 as the market continues to place a floor at roughly $6,000. If bitcoin continues to defend this level in the coming days, investors should reasonably expect another bullish breakout attempt targeting the July 8 high near $6,900. The broader market will likely follow suit given bitcoin’s 43% dominance.

Earnings Spotlight

U.S. stocks ended the week in positive territory as earnings optimism and tech-driven gains propelled the major indexes higher. The Nasdaq Composite Index recorded back-to-back record closes Thursday and Friday.

A trio of bank earnings Friday marked the unofficial start to corporate reporting season. Three additional banks are scheduled to report between July 16-18: Bank of America (BAC), Goldman Sachs Group (GS) and Morgan Stanley (MS). Dow industrials Johnson & Johnson and UnitedHealth Group Inc. (UNH) are also due for Q2 results.

So far, 5% of S&P 500 companies have reported second-quarter results. Among them, 89% have posted better than expected earnings and 85% have reported a positive revenue surprise, according to FactSet.

Economic Calendar

From the perspective of stocks, commodities and currencies, the following events will influence investor sentiment this week.

Monday

U.S. President Donald Trump and Russian counterpart Vladimir Putin will meet Monday mere days after 12 Russian intelligence officials were charged by a federal grand jury for meddling in the 2016 presidential elections.

President Trump says he has “low expectations” for the summit but reassured that “nothing bad” will come out of the meeting with Putin.

In economic data, the Chinese government will release second-quarter GDP data on Monday, along with a batch of reports covering retail sales, industrial production and fixed-asset investment.

In the United States, the Commerce Department will release the latest retail sales figures for June.

Tuesday

The U.K. Office for National Statistics will release the latest employment and wage figures for the month of May. Meanwhile, the U.S. Federal Reserve will report on June industrial production.

Fed Chair Jerome Powell is scheduled to testify before Congress Tuesday with a follow-up panel scheduled for Wednesday.

Wednesday

Final Eurozone consumer inflation data for June will make the rounds Wednesday. In the U.S., housing starts and building permits will be in the headlines. The U.S. Energy Information Administration (EIA) will also release its weekly crude inventory report for the period ended July 13.

Thursday

Economic data is once again in the spotlight on Thursday, with Australian employment and U.K. retail sales being the main focus.

In the U.S., the Labor Department will report on weekly jobless claims and the Philadelphia Fed will unveil its July manufacturing survey.

Friday

In the final session of the week, the Canadian government will report on consumer inflation and retail sales – the first major reports since the Bank of Canada (BOC) voted to raise interest rates for the fourth time in 12 months.

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 538 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

Weekly Forecast: False Hope and Misinformation – How a Non-Issue Triggered a $50 Billion Selloff of Cryptocurrencies

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The crypto-market selloff intensified over the weekend, as the search for an elusive bottom continued following an SEC decision to postpone a highly touted bitcoin exchange-traded fund. But let’s not mince words: the cryptocurrency market tanked on a non-issue that was fully expected by those of us in the know. With rationality out the window, the next seven days will provide a critical test for a market struggling with liquidity shortfalls, false hope and misinformation.

Why Is the Market Tanking?

As Hacked previously reported, cryptocurrencies have been in a state of disarray ever since the U.S. Securities and Exchange Commission decided to postpone their ruling on the VanEck SolidX Bitcoin ETF. Over a stretch of five days, the cryptocurrency market capitalization fell by roughly $50 billion to $207 billion, the lowest in a year.

But the SEC’s announcement was hardly a surprise to anyone who’s been following the regulatory debate in Washington. In fact, a cursory glance at news headlines would have clearly revealed that a delay was not only possible, but likely. What’s more, postponement is hardly unique for the SEC. Just two weeks earlier, the agency announced it would delay its ruling on five proposed bitcoin ETFs submitted by Direxion Investments.

Postponement of the VanEck/SolidX proposal clearly wasn’t priced into the market, which partly explains the massive reversal we’ve witnessed over the past six days. This type of herd mentality is especially dangerous for cryptocurrency traders given the market’s liquidity challenges.

Astonishingly, all these developments conceal what’s really important from the perspective of mass adoption – namely, the world’s largest stock exchange operator is partnering with Corporate America’s biggest companies to bring cryptocurrencies to mainstream investors and consumers. The launch of Bakkt, a startup company created by Intercontinental Exchange (ICE) to spearhead crypto adoption, has flown under the radar amid the ETF debate.

Bitcoin Dominance

Bitcoin’s status as crypto-market bellwether has strengthened over the past three months as investors exited more speculative altcoin bets. This came to a head over the weekend as bitcoin’s dominance rate crossed 50% for the first time since the height of its bull market in December.

As bitcoin’s market share grows, investors can expect it to exert a stronger pull on the broader cryptocurrency market. Although bitcoin has been the center of the latest market collapse, it has triggered even bigger percentage losses for altcoins and tokens.

Case in point: bitcoin is down 10% over the past seven days. Ethereum has declined more than 20% over the same period, XRP by 30% and IOTA by a staggering 40%.

At the time of writing, the bitcoin price had gained 2.2% to trade at $6,340, which is well above the two major inflection points Hacked identified on Friday. Bitcoin’s defense of the psychologically and materially significant $6,000 level could dictate whether the broader market plumbs new yearly lows or generates a rally in the opposite direction.

The Week Ahead

In terms of closely watched calendar events, the following headlines could influence both crypto and conventional markets this week.

Monday

There are no significant events scheduled on Monday.

Tuesday

Investors keeping tabs on global data flows can expect the following releases on Tuesday: China retail sales, industrial production and fixed asset investment; Germany Q2 GDP; Eurozone Q2 GDP.

Wednesday

The Blockchain Futurist Conference in Toronto will begin on Wednesday and run until Thursday. Headline speakers include Ethereum co-founder Charles Hoskinson and Dash Core CEO Ryan Taylor.

Cardano is also expected to deliver a special announcement on Wednesday, though details are still pending.

Meanwhile, the expiration of the CBOE XBT bitcoin futures contract will occur on Wednesday.

In conventional markets, U.S. data flows will make in the form of July retail sales and industrial production. The August edition of the New York Empire State Manufacturing Index is also expected.

Thursday

Tron and Cardano are scheduled to hold community/developer meetups on Thursday. The Cardano event will take place in Krakow, Poland. Tron’s developer group will meet in San Francisco.

In economic data, reports on Eurozone trade, U.K. retail sales and U.S. housing starts will make their way through conventional markets on Thursday.

Friday

The European Commission will release final July Eurozone consumer inflation data on Friday. The Canadian government will issue a similar release.

In crypto news, Bytecoin (BCN) will release its public testnet on Friday.

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 538 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: Bitcoin Bulls Left Empty Handed After ICE’s Foray Into Cryptocurrency

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A foray into cryptocurrency by Intercontinental Exchange (ICE), Starbucks and the Boston Consulting Group has failed to translate into gains for the bitcoin price. In fact, the complete opposite has occurred, with BTC now threatening a bearish reversal from last month’s high.

The cryptocurrency market’s performance over the past five days reflects volatility in over-the-counter (OTC) markets, which continues to discount overwhelmingly positive developments in the blockchain arena. (At the time of writing, Hacked published Coinbase Explores Adding Dozens of Altcoins for Custody, XRP Included.)

After putting up a strong battle in the latter half of July, the bulls appear to be once again relinquishing control of the market. This tug-of-war will continue over the next seven days as the major coins struggle to maintain levels of key support.

Bitcoin Market Is Too Volatile

The cryptocurrency market’s sudden reversal last week wasn’t as surprising as it appeared, based on the technical charts. As Hacked reported last week, bitcoin entered overbought territory on July 24 after prices rocketed above $8,500 for the first time in two months. It took the bears multiple attempts to drive the bitcoin price below $8,000 but they eventually succeeded, paving the way for the latest slide into correction territory.

Bitcoin is now approaching bear-market territory, which is defined as a reversal of 20% or more from the most recent high.

Analysts at UBS have weighed in on the bitcoin price and have concluded that the market is simply too volatile to drive mainstream adoption. As per CCN, the Swiss bank said: “Our findings suggest that bitcoin, in its current form, is too unstable and limited to become a viable means of payment for global transactions or a mainstream asset class.”

Negative capital flow has underpinned crypto’s volatility since January, when the market began its historic descent. Market-wide trade volumes were down again on Sunday, with 24-hour turnover amounting to just $11.3 billion. Trade volumes spiked above $20 billion during last month’s rally.

Bearish Breakdown or Bakkt Driven Reversal?

UBS’ analysis hit the airwaves 24 hours before ICE made arguably the biggest splash in crypto this year. Bakkt, the NYSE parent’s new startup that will hold and manage investors’ cryptocurrency, is not only planning to revolutionize bitcoin investments but streamline mainstream adoption of crypto payments.

As the author speculated on Saturday, bitcoin and the broader cryptocurrency market is discounting the Bakkt revelation. As it turns out, this could be a symptom of unusual trading behavior in the OTC market. According to Tabb Group, a U.S.-based research firm, OTC trades account for 70% of the total cryptocurrency market. By comparison, digital currency exchanges process less than 30% of total market transactions.

If Tabb’s research is correct, fundamental news like the Bakkt announcement is more likely to have a short-term impact on exchange trading but play a lesser role in OTC markets.

Bitcoin’s next inflection point is $6,800; a break below this level would put the leading cryptocurrency in bear-market territory.

The Week Ahead

In terms of major market-moving events, the following headlines are expected over the next five days.

Monday

A pair of Eurozone data releases headline a relatively uneventful day for traders. Germany will release its latest report on factory orders for July, while Sentix will unveil the August edition of the Eurozone investor confidence index.

Tuesday

On the policy front, the Reserve Bank of Australia (RBA) will vote on interest rates Tuesday. The benchmark lending rate is forecast to hold steady.

For crypto traders, Coinbase is conducting final testing for Ethereum Classic support on Tuesday.

Wednesday

The Chinese government will release its latest trade figures on Wednesday. According to analysts, Beijing’s dollar-denominated trade surplus likely fell sharply in July.

Thursday

The Chinese government will release its latest batch of inflation figures on Thursday, including consumer and factory-gate prices.

In terms of monetary policy, the Reserve Bank of New Zealand will deliver its latest interest-rate verdict. No change to the bank rate is expected.

Friday

The BlockConscious Summit in Brisbane, Australia will begin on Friday and run through Saturday.  The event, which is sponsored by CoinSpot, Binance and others, will feature over 45 speakers.

In economic data, the U.S. Labor Department will release the consumer price index (CPI) on Friday. The U.K.’s Office for National Statistics will release a batch of economic data, including second-quarter GDP, trade balance and industrial production.

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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5 votes, average: 5.00 out of 55 votes, average: 5.00 out of 55 votes, average: 5.00 out of 55 votes, average: 5.00 out of 55 votes, average: 5.00 out of 5 (5 votes, average: 5.00 out of 5)
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4.6 stars on average, based on 538 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: Bitcoin’s Bullish Outlook Intact Following SEC Decision

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Bitcoin’s bullish breakout extended to two-month highs last week, as prices crossed $8,500 for the first time since May. However, the bulls were tested on Thursday after the U.S. Securities and Exchange Commission (SEC) denied a second application by Cameron and Tyler Winklevoss to list a bitcoin ETF.

Despite the SEC’s rejection, the cryptocurrency market remains in a firm uptrend. Over the next seven days, the key test is whether bitcoin can defend its current level and extend the breakout beyond the 200-day moving average, currently at $8,494.

Cryptocurrency Market Aims Higher

Bitcoin’s bullish outlook remains intact following the successful defense of $8,000. A combination of technical support and bullish bias suggest that further upside is likely in the near term.

The broader cryptocurrency market has more or less followed in bitcoin’s lead over the past four weeks. Since bottoming near $234 billion one month ago, the total market has recovered $63 billion. Unlike previous rallies, the market share of altcoins and tokens relative to bitcoin has declined. At the time of writing, altcoins represents 52.6% of the total market, according to CoinMarketCap.

Trade volumes will be key in sustaining the next leg of the rally. As Hacked recently reported, turnover more than doubled on Saturday following a sudden spike in ether trade volumes. Over the span of just 13 hours, Ethereum’s trade volumes surged from around $1.7 billion to nearly $12 billion, a level not seen this year.

Bitcoin ETF?

Despite the SEC’s decision to block the Winklevoss ETF, investors are hopeful that a forthcoming decision on a joint proposal submitted by VanEck and SolidX will yield better results. An SEC ruling on the matter could come as early as Aug. 16.

On July 20, VanEck issued a letter to the SEC reiterating industry-wide support for the proposed ETF. According to VanEck, bitcoin has sufficient liquidity through the futures market, with derivatives contracts issued by CBOE and CME trading closely to the bitcoin spot price. In VanEck’s view, this should alleviate concerns over price manipulation.

The SEC’s position on bitcoin has softened in recent months after the agency recognized that the asset is “sufficiently decentralized.” However, it remains to be seen whether this will translate into green lighting the first bitcoin exchange-traded fund.

Monetary Policy in Focus

Investors with exposure to stocks, bonds or the currency market will be keeping close tabs on monetary policy this week.

On Tuesday, the Bank of Japan (BOJ) will deliver a policy verdict alongside its quarterly outlook report. Although the BOJ is not expected to raise interest rates, policymakers may consider tweaking the central bank’s massive stimulus program.

The U.S. Federal Reserve will coalesce in Washington on Tuesday for a two-day policy meeting. The official interest rate decision is scheduled the following afternoon. Policymakers are widely expected to stand pat this week but are likely to speak favorably about the economy following last week’s Q2 GDP figures.

Meanwhile, the Bank of England (BOE) is expected to raise interest rates at the conclusion of its policy meeting on Thursday. An expected quarter-point hike would bring the Bank rate to 0.75% – the highest since March 2009.

The Week Ahead

For traditional markets, the following events will be in the headlines over the next five days.

Monday

The week begins with a deluge of Eurozone sentiment indicators covering services, business, industrial confidence, consumer confidence and economic sentiment. Separately, Germany will unveil the latest consumer inflation report for July.

Tuesday

A pair of Chinese PMI reports covering manufacturing and services activity kick off an active Tuesday session on the economic calendar. In terms of monetary policy, the BOJ will deliver its high-profile interest-rate decision at the start of Asian trading.

In Europe, reports on unemployment, inflation and GDP will make headlines throughout the session. Eurozone GDP likely grew 0.4% in the second quarter following a similar gain in January-March. That translates into year-over-year growth of 2.4%.

In the U.S., the monthly personal income and outlays report will make headlines Tuesday. The monthly data set includes the latest core personal consumption expenditures (PCE) index, the Federal Reserve’s preferred measure of inflation.

Wednesday

On the data front, payrolls processor ADP will report on U.S. private sector job creation Wednesday morning. Private payrolls likely rose by 175,000 in July, according to a median estimate of economists.

In monetary policy, the U.S. Fed will deliver its interest-rate verdict at 2:00 p.m. ET.

Thursday

The Bank of England’s interest rate decision will be handed down Thursday at 7:00 a.m. ET.

In terms of economic data, U.S. initial jobless claims and factory orders are due for release Thursday morning.

Friday

The U.S. nonfarm payrolls report, arguably the most closely watched calendar event of the month, is due for release Friday morning. The world’s largest economy likely added 195,000 jobs this month following a net gain of 213,000 in June. In addition to the total jobs tally, nonfarm payrolls will also report on unemployment and average hourly earnings – two important gauges of economic health.

Separately, the Commerce Department will report on the U.S. trade balance on Friday. Washington’s deficit with the rest of the world is forecast to hold steady for the month of June.

The Institute for Supply Management (ISM) will release the July edition of U.S. services PMI Friday morning. Later in the session, Baker Hughes Inc. will report on active U.S. oil rig counts for the latest week .

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 538 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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