Mixed Feelings: Markets, Gold And Crypto
Mati Greenspan | Jul 25, 2018 08:56AM ET
Yesterday we saw a clear break above the key psychological level of $8,000 per Bitcoin. Now the question on everyone's mind is where did this move come from and is it sustainable?
Now, I know that many of you are reading this note for just one reason and we have some rather unique crypto observations for you below but before we get into that it is important to always bear in mind that a portfolio that is made up of only crypto is like a recipe that's all spices. Crypto-assets are highly volatile and so should only make up a small part of your overall portfolio.
Let me know if you have any questions, comments, insight, or feedback on these updates.
Today's Highlights
Mixed Feelings
Gold Line
Healthy Crypto Market
Please note: All data, figures and graphs are valid as of July 25th. All trading carries risk. Only risk capital you can afford to lose.
Traditional Markets
Stock markets are displaying very clear mixed emotions at the moment. On the one hand are all of the fears about the ongoing trade war and the Fed's tightening of monetary policy. On the other hand, corporate earnings are going well.
Facebook (NASDAQ:FB) reports today after the bell. Their stock closed yesterday at a record $214 per share in anticipation of an outstanding report.
Gold Line
The precious metals have been getting hammered these last few weeks. From what it seems, the reason for the slide is mainly due to Trump's new tariffs on Steel and Aluminum. Meanwhile, Gold, Silver, Platinum, and Copper are getting really cheap.
Of course, there's no telling just how low they might go but a contrarian trader might want to take note and even consider scaling into a long-term position.
This morning, I noticed the following trend line on gold, which seems to be undergoing a rather serious test at the moment.
Crypto Market's Healthy Rally
According to the volume on exchanges, it seems clear that the rally is being led by East Asia. This is depicted in the following 4 graphs.
Get The News You Want
The leader is the Japanese yen. Notice the big mountain at the time of the surge above $8,000, which took place at approximately 13:30 to 15:00 on these graphs...
The next is South Korea, who are some of the biggest cryptotraders in the world. The peak here is only at 273 BTC but the correlation between the volumes and the price movement is very clear.
The US dollar had a spike as well but it was much more focused. Meaning that the Americans only participated during the extreme part of the surge and less in the before and after party.
For the purpose of this analysis, I'd like to include volumes of the USDT (Tether), which were notably unaffected and remained constant throughout the ordeal.
Of course, all of the above comes from Cryptocompare who generally pulls their data from online exchanges. When we analyze the bitcoin blockchain, we see something even better.
In this graph, we can see that the on-chain activity is indeed increasing lately and has now topped 2.5 transactions per second for the first time since February.
This is a clear sign that whatever the reasons for the surge...
- Possible Bitcoin ETF
- Blackrock's confirmation of crypto interest
- Goldman Sachs crypto interest
- Fear of Bank of Japan policy
- anything else
... the excitement doesn't stop at speculation and we can indeed see momentum building in the Bitcoin network.
Have a wonderful day!
@MatiGreenspan
eToro, Senior Market Analyst
Disclosure: This content is for information and educational purposes only and should not be considered investment advice or an investment recommendation. Past performance is not an indication of future results. All trading carries risk. Only risk capital you're prepared to lose.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.