Bitcoin Cash, Litecoin and Ripple Daily Analysis – 26/01/18

Bitcoin Cash Goes Sideways

It’s been a relatively uneventful week for Bitcoin Cash this week, with any attempts to break out towards $2,000 levels facing stern resistance as investors fret over an ever changing regulatory landscape.

Fresh news hit the wires of U.S regulators upping the ante on the cryptomarkets, with a pledge to strengthen oversight. What that ultimately means is unclear, but will likely involve some form of disclosure that removes the anonymity that so many cryptocurrency investors crave.

Considering all the chatter and what investors are beginning to realize is the inevitable, the markets have stood their ground relatively well.

Bitcoin Cash slipped 0.04% on Thursday to end the day at $1,650, with a 1.68% gain this morning taking it to $1,654.7 at the time of writing.

The weekends have tended to be particularly favourable for the cryptomarkets of late, with investors free to trade without the threat of government chatter hitting the news. Bitcoin Cash could make a run through to $2,000, though the gains may be short lived, with investors seemingly keen to lock in profits before the start of the next week.

For the day ahead, Bitcoin Cash will need to break through $1,700 to have a reasonable shot at $2,000 over the next 24-hours. For investors, sideways will likely be considered a reasonable outcome when considering the moves through the previous 2-weeks.

BCH/USD 26/01/18 Hourly Chart

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Litecoin Loses Ground

It was another bad day for Litecoin on Thursday, with Litecoin dropping 0.25% to end the day at $180.13. The issue for Litecoin is not the lateral moves, which has been a common theme across many of the cryptocurrencies, it’s the lack of any major highs, with Litecoin tending to be left behind in any rallies, however short lived they may be.

For now, attempts by the Ripple team to bring down Litecoin and Bitcoin have failed, but there is some truth behind the fact that Bitcoin and Bitcoin Cash will be battling it out for supremacy and ultimately the alternative to fiat currency. There is also truth behind the fact that Litecoin lacks leadership.

Speculative trading is less interested in such comments however and, until investors shift to the fundamentals, the only risk will continue to be regulatory.

At the time of writing, Litecoin was down 0.21% to $178.49, easing back from an intraday high $181.71, with Litecoin expected to be one of the laggards going into the weekend.

LTC/USD 26/01/18 Hourly Chart

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Ripple on the Slide

Ripple made more splashes on Thursday, but again for the wrong reasons, falling 2.78% to $1.3148 by the close, falling behind Bitcoin Cash and Litecoin that saw minor losses through the day.

The recent volatility in Ripple has left the cryptocurrency exposed and investors appear to be cagier to hold on, with Ripple down 4.26% to $1.2396 at the time of writing.

There’s a general lack of confidence since Ripple slumped from the number 2 spot, with its market cap tanking from January’s $140bn highs back down to $48.37bn at the time of writing.

Ripple is certainly under threat from Bitcoin Cash, sitting in 4th and Stellar Lumen that continues to impress with solid gains through the week.

For the day ahead, it’s looking bearish, with Ripple likely to test $1.20 support levels before a short term recovery back up to $1.30 levels over the early part of the weekend.

It’s been downhill all the way from this year’s highs and one cannot help but think that its inclusion on more exchanges is its only hope for a recovery back up to record highs.

XRP/USD 26/01/18 Hourly Chart

 

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4th Quarter GDP Numbers May not be Enough for the Dollar

Earlier in the Day:

Economic data out of the Asian session this morning was limited to Japan’s December inflation figures, which showed that national core inflation held steady at 0.9%. The economic recovery has continued to fail to drive inflation towards the BoJ’s 2% objective and the latest figures are further evidence that the BoJ is unlikely to begin making its move towards neutral any time soon.

To make matters worse, Tokyo’s January core consumer prices rose by 0.7%, easing from December’s 0.8%, with the next area of focus for the markets being the annual wage negotiations in a few months, with wage growth needing to accelerate to support domestic consumption and build inflationary pressures.

The Yen moved from ¥109.537 to ¥109.598 upon release of the figures, with the markets largely brushing aside the BoJ’s December monetary policy meeting minutes released a little later in the morning.

At the time of writing, the Yen was up 0.16% to ¥109.23 against the Dollar, with the Aussie Dollar rally in full swing, gaining 0.44% to $0.8061, recovering most of Thursday losses.

In the equity markets, it was a mixed bag, with the Nikkei under pressure from a stronger Yen, down 0.16% by the close, while the Hang Seng and CSI300 were in recovery mode, up 1.46% and 0.58% at the time of writing.

The Day Ahead:

It’s a quiet day ahead for the EUR, with no material stats scheduled for release this morning. The lack of data doesn’t suggest that the EUR won’t be a currency of interest however, with the latest from the U.S administration and the ECB press conference, continuing to provide the EUR with support.

While the general view was that Draghi would seize the opportunity to jawbone the EUR in response to Mnuchin’s Wednesday chatter, Draghi talked up the Eurozone economy and the prospects of inflation reaching the ECB’s close to 2% target, while just highlighting that a stronger EUR would have an impact on the economy.

Eurozone economic data this week has been upbeat and that’s with the EUR sitting at around $1.19 levels through the latter part of last year. While global economic growth remains buoyant, demand for European goods will likely remain, which should ease any immediate concerns on the outlook for the Eurozone economy with the EUR at $1.24 levels.

At the time of writing, the EUR was up 0.40% to $1.2446, recovering from Thursday evening’s slide back down to $1.23 levels by the close.

For the Pound, it’s another big day, with 4th quarter GDP numbers scheduled for release. Forecasts are for the UK economic growth to hold steady at 0.4% quarter-on-quarter, while slowing from 1.7% to 1.4% year-on-year.

The markets will likely be able to swallow the numbers, though anything weaker and we will expect the Pound to take a hit, soft Brexit or not.

Later in the day, BoE Governor Carney will also be speaking, which could provide some further direction, this time around the BoE Governor likely to have little issue with the uptick in the Pound as the BoE continues to fight inflation.

At the time of writing, the Pound was up 0.40% to $1.4199, with the Pound having lost some ground from the mid-week highs following President Trump’s hawkish remarks on Thursday

Across the Pond, key stats this afternoon include December’s durable goods orders, 4th quarter GDP figures and December’s goods trade data.

Key drivers will be the GDP and durable goods order numbers, with the Dollar bulls in the need of a lift, as even the U.S President is unable to bring the slide to an end, the Dollar Spot index down 0.40% to 89.031 at the time of writing. Outside of the data, any comments from the administration will also be a factor, as the U.S President and U.S Treasury Secretary contradict each other on sentiment towards the Dollar.

For the Loonie, its December inflation figures and, if forecasts are anything to go by, the Loonie could be in for a tumble this afternoon, with NAFTA talks having eased pressure on the Loonie through the week.

The Loonie was up 0.31% to $1.2339 against the Dollar at the time of writing.

Bitcoin Stuck in the Ranges, as Stellar Lumens Continues its Rally

Cryptomarket relief continued to reverberate through Wednesday’s session, with Bitcoin managing to get through the day unharmed, rising by 4.32% to $11,318.06 by the close.

Gains were seen across the board on Wednesday, as the flow of negative news appeared to have ground to a halt.

The markets have had some time to reflect as opposed to responding and it’s proven to be the tonic going through the middle part of the week. The chaos was largely attributed to the threat of the South Korean government shutting down the exchanges, with this week’s panic coming even though the government had merely stated that they would be banning anonymous trading, following the previous week’s U-turn.

Concerns that China may look take more stringent steps against the crypto community was also a factor, though, with plenty of fake news and speculation there to drive volatility and the wild swings seen through the first part of the year, there was little time for investors to digest and form a more calculated view.

The cryptocurrency performance on Wednesday and the early part of the day were also more comparable to more mature asset classes than the intraday moves associated with the cryptocurrencies.


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At the time of writing, Bitcoin was up 1.04% to $11,520, in what has been a relatively tight range, with an intraday low $11,300 and high of $11,741.82.

While the markets are continuing to steady, investors have been relatively slow to return, with Bitcoin’s market cap still sitting below the $200bn market, at $194.71bn at the time of writing.

The good news is that investors have been returning, however, with Ethereum’s market cap recovering to $105.65bn and Ripple moving back to $53.24bn.

What’s next will be the question on many investors’ minds, with a catalyst needed to bring back the rallies of old.

For Ripple, being included on Coinbase would certainly reignite the fire, though, with sentiment still on the cautious side, one does question whether Ripple would be able to recapture the number 2 spot and overtake Ethereum.

At the time of writing, Ripple had lost ground, down 0.37% to 1.34739, while Ethereum was hanging on to positive territory, up 0.66% to $1,064.01.

The day ahead will provide some insight into investor sentiment ahead of the weekend, with the cryptocurrencies having enjoyed weekend rallies since the start of the year, investors conscious that there’s unlikely to be any negative government chatter that could catch the markets off guard.

In the Futures market, the Cboe’s February contract is up $295 to $11,490, which is sitting below Bitcoin’s value at the time of writing. This will likely be a drag through the day, as investors look for a reason to jump back into the cryptomarkets.

For the day so far, Stellar Lumen is the HODL however, up 7.29% to $0.6129 on the back of Wednesday’s 14.39% rally that certainly outclassed the rest of the pack.

As always, while sentiment has improved, market conditions can deteriorate rapidly and investors will need to keep an eye on the news, which is almost impossible to pre-empt.

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Bitcoin Cash, Litecoin and Ripple Daily Analysis – 25/01/18

Bitcoin Cash Sees Green

There was finally some positives for the markets to take away from on Wednesday, with Bitcoin Cash not only closing out the day with a 2.91% gain, but also getting through the day without any major catastrophe.

With an intraday high $1,680 and an intraday low $1,550.4 hit at the start of the day, ranges were on the tighter side and on an upward trend.

The gains may not be considered spectacular, but are certainly a positive, with investors gradually dusting themselves off from a fortnight of heightened volatility attributed to cryptomarket panic over the South Korean government and its plans for the South Korean crypto exchanges.

For now it’s just the banning of anonymous trading, which is bad, but certainly not as bad as shutting down the whole market. And taxation? Well, that’s unlikely to be limited to the South Korean exchanges…

At the time of writing, Bitcoin Cash is up 1.82% to $1,681.8, having eased back from an intraday high $1,700, while sitting well above an intraday low $1,639.3 hit at the start of the day.

A move through to $1,700 levels and breaking beyond today’s intraday high would be another positive for the cryptomarkets and investor confidence, with the gains through the early part of the day broad based.

There will be some caution however, which will likely limit gains through the day as investors continue to find their feet after the choppy start to the year.

BCH/USD 25/01/18 Hourly Chart

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Litecoin Slow but Steady

Litecoin’s immediate struggles seem to have been put behind it, thanks to the improved sentiment towards the cryptomarkets, with Litecoin managing to close out Wednesday with a 0.81% gain. It was far from the best performer on the day, but the very fact that prices have become more stable has supported the likes of Litecoin and will be a positive for the market in general.

Litecoin has largely fallen out of favour but, with a market cap of a market cap of $10.1bn, there’s still some interest, though this may also begin to wane as Litecoin makes its way down the rankings, with Cardano and Stellar Lumen now ranked at 5th and 6th, above Litecoin in 7th.

At the time of writing, Litecoin was up 1.27% to $182.89, well above an intraday low $179.5, with a move through to $185 levels needed to support a more sustained path through to $190 and make a run at $200 by the weekend, assuming there is no negative chatter to slam the recovery.

Investors may accept another relatively flattish day, but with the likes of Stellar Lumen on the charge, up 7% this morning, time may be running out, with Litecoin’s founder having already jumped ship.

LTC/USD 25/01/18 Hourly Chart

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Ripple Looks Ready for a Move

Ripple had a choppier day than most on Wednesday, hitting an intraday high $1.4258 before falling back down to $1.33965 by the close, to gain just 0.39% on the day.

Investors are still nervous and a 6.85% gain on the day was likely to be enough for some to pull out and monitor the news wires, with it being a little too quiet following the chaos of the last 14-days.

At the time of writing, Ripple is up 1.05% to $1.3666, having eased back from an intraday high $1.40796 as investors look elsewhere for greater returns.

A move back through to $1.40 levels is needed to draw investors in, with any fall back towards today’s intraday low $1.3057 likely to see Ripple sink back down to mid-$1.20 levels ahead of the weekend.

XRP/USD 25/01/18 Hourly Chart

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Mnuchin Sinks the Dollar, How will Draghi and the EUR Respond?

Earlier in the Day:

Economic data through the Asian session this morning was limited to New Zealand’s 4th quarter inflation figures. New Zealand consumer prices rose by just 0.1% quarter-on-quarter in the 4th, falling well below a projected 0.4% rise, with the rate of inflation slowing considerably from the 3rd quarter’s 0.5%. Things were not much better year-on-year, with the annual rate of inflation slowing to 1.6%, below a forecasted and 3rd quarter 1.9%.

While fuel prices surged 6.1%, a slump in retail prices attributed to heavy discounting pegged back any hopes of a pickup in price pressure, which is now expected to leave the RBNZ in neutral until next year, with the markets having priced in a rate hike later this year.

The Kiwi Dollar slumped from $0.74243 to $0.73361 upon release of the numbers, before recovering to $0.73728 at the time of writing, a gain of 0.52%, all of which has come off another U.S Dollar sell-off.

Elsewhere, the Yen was up 0.21% to ¥108.99 against the Dollar, with the Yen last at ¥108 levels in early September of last year. Things were not much better for the RBA, with the Aussie Dollar rallying 0.41% to $0.8095, with Aussie Dollar strength likely to be an unwelcome gift for members at the next meeting.

In the equity markets, it was a sea of red, with the Nikkei leading the way down, dropping 1.13% by the close, the current week’s 1.75% upside in the Yen weighing on export stocks, with the CSI300 and Hang Seng down 0.08% and 0.19% respectively.

The negative sentiment through the session attributed to the slump in the U.S Dollar and what it is likely to mean for trade terms

For the ASX200, the index closed out down just 0.08%. The declines in the ASX200 were less pronounced, with the softer Dollar supporting commodity prices, with oil and metal prices on the rise this week. The gains were not enough to offset the slide in the big-4 banks however, which pulled the index into the red.

The Day Ahead:

It’s a big day for the EUR and U.S Treasury Secretary Mnuchin certainly laid down the gauntlet at the World Economic Forum in Davos on Wednesday.

The EUR was already at levels with which the ECB was likely to be uncomfortable before Mnuchin decided to share his views on the weaker Dollar. With the EUR now sitting at levels not seen since late 2014, when the Eurozone economy was far from firing on all cylinders, there is an even greater incentive for Draghi to drag the EUR at this afternoon’s ECB press conference.

Focus will be on the ECB through the day, with this morning’s consumer and business climate stats out of Germany unlikely to move the dial barring anything materially disappointing.

While Trump may have kicked off a trade war, Mnuchin may have just started another currency war. How far Draghi is willing to go, without spooking the markets remains to be seen, but some rhetoric on the likely negative effects of a stronger EUR on the economy and the outlook towards monetary policy would help, as would categorically removing any hint of the ECB being willing to review its policy on deposit and interest rates.

We’re certainly in for an interesting press conference, with the EUR up 0.33% to $1.2449 at the time of writing. Can Draghi bring the EUR back to at least $1.22 levels by the end of the day? It’s going to be a challenge at best.

For the Pound, the stellar run continues with the Pound up 0.43% to $1.4303 at the time of writing. The combination of a weak Dollar and positive sentiment towards a soft Brexit have driven the Pound towards the much coveted pre-EU Referendum $1.48 level.

Economic data out of the UK this morning is limited to gross mortgage approvals that are unlikely to have any influence, with the markets now focused on Davos and the U.S administration’s intent to go about its own business.

The only downside for the Pound would be from negative Brexit chatter that could lead to a shift in sentiment towards the anticipated outcome of trade talks with the EU and perhaps the UK economy going into recession, neither of which seem to be on the cards at present. In fact, the U.S administration may well have given Britain a lifeline with the increased protectionism, with the EU likely to need its trade partners more than ever before.

Across the Pond, economic data out of the U.S includes the weekly jobless claims numbers together with December goods trade figures and new home sales numbers.

The stats are going to have to be impressive for the Dollar slide to shallow, with a reversal unlikely to be on the cards today, the Dollar Spot Index down 0.35% to 88.896, levels that have not been seen since late 2014.

We may see the Dollar bulls in hiding for some time, but there may be a glimmer of hope further down the road, with inflationary pressures likely to build. U.S consumers are still heavily reliant on foreign goods. How this affects the outlook for monetary policy could shift influence away from the government. The bad news would be a more rapid fall in the Dollar. Let’s not even think about the U.S budget deficits and the effects of a more aggressive rate path on the U.S economy.

The Bitcoin Ship Steadies as Negative News Slows

There was some relief in the cryptocurrency markets on Tuesday, with Bitcoin managing to move back to $11,000 levels through the middle part of the day, hitting an intraday high $11,409.87 before easing back to $10,600 by the close, down just 1.94% for the day, which was better than most of the majors.

For Bitcoin investors, the take away from the week so far is the market’s resilience, with the plethora of negative chatter having pinned back any major rallies, but certainly not pulling Bitcoin back down to last week’s $9,222 low.

Bitcoin briefly touched sub-$10,000 levels on Tuesday but found strong support and that’s certainly reflective of current market sentiment that continues to ignore the scaremongering that has persisted since late last year.

Institutional money is coming in and even the world’s largest banks are making available trading platforms for institutional investors to get in on the action.

For the institutional money, the volatility will likely be the attraction and, while the institutional money is heading mostly towards Bitcoin futures markets, there is likely to be some appetite for Bitcoin and that can only be good news for the cryptomarkets.


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At the time of writing, Bitcoin is up 1.08% to $10,969.36, recovering from an intraday low $10,448.13. Having already broken through to $11,000 levels in the early part of the day, hitting an intraday high $11,120 in the last hour, sentiment towards the cryptocurrencies has improved, though it’s unlikely to be smooth sailing through the day.

Pulling back Bitcoin has been the futures market, with the Cboe’s February contract down $55 to $10,920, with influence from the futures market returning.

Elsewhere, the major cryptocurrencies have managed to recover from losses in the early part of the day, with Stellar Lumen’s XLM leading the way, rallying 10.42%. Gains elsewhere have been more modest, with Bitcoin Cash flat at $1,611.1 and Litecoin up by just 0.20% to $178.63 at the time of writing.

For the rest of the day, the markets will likely take cues from Bitcoin and, if Bitcoin manages to hold on to the positive territory through the rest of the day, then the rest of the cryptos should follow.

The reality remains that government oversight is likely to be on the horizon and taxation is likely to be introduced at an earlier juncture, but neither should have a materially dire impact on the markets and the exchanges for that matter.

Cryptocurrency exchanges are unlikely to shut up shop in response to taxation, with the billions of Dollars earned in 2017 expected to continue flowing in through the current year. Granted, it will hit the bottom line, but not to such an extent that it would be better to throw it all away.

The negative sentiment has eased for now and it’s back to the basics and that’s the positive, with Ethereum also looking to recapture $1,000 levels, currently up $1.38% to 997.57.

As always, investors will need to monitor the news feeds for any news that has yet to be considered by investors, with caution needed in event of more governments joining the negative chatter.

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Bitcoin Cash, Litecoin and Ripple Daily Analysis – 24/01/18

Bitcoin Cash Steadies

Following days of negative news, the cryptomarkets look to have steadied the ship for now, with the cryptocurrencies in the red at the time of writing, but certainly not as deep in the red as the markets have become accustomed to over the last few weeks.

Bitcoin Cash managed to hit an intraday high $1,693.9 on Tuesday before easing back to $1,568 by the close, though few will be overly concerned with a 2.31% decline for the day.

At the time of writing, Bitcoin Cash is down 1.31% to $1,590. While sideways moves have historically been a nemesis for the cryptocurrencies, this time around there will be some comfort taken from the lower vols seen over the last 24-hours, which could see investors returning to the cryptomarkets, all be it cautiously.

For the day ahead, a move through to $1,650 levels would support a break through to $1,700 levels, with Bitcoin Cash wedged between its intraday lows and highs.

The good news is that there’s been strong support at $1,500, which should provide investors with further confidence, as Bitcoin Cash holds above last week’s sub-$1,400 lows.

BCH/USD 24/01/18 Hourly Chart

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Litecoin Struggles Along

Litecoin has continued to struggle, with Tuesday’s intraday high $186.03 seeing Litecoin pull back to sub-$180 levels to end the day down 2.74% at $174.51.

The lack of appetite through the early part of the day is telling, with Litecoin sitting close to this morning’s intraday low $174.3, down 2.23% at the time of writing.

For the cryptomarkets and Litecoin investors in particular, the question will be whether the Litecoin team can start making progress in the real world to drive demand for Litecoin.

While focus will gradually shift to the blockchain tech on offer, speculative investors will always be ready to jump in, as is the case across the more mature asset classes, so while Litecoin is struggling for now, any hints of a shift in sentiment towards the cryptos and Litecoin will likely benefit.

For the day ahead, Litecoin will need to break out beyond today’s intraday high $180 to avoid testing $170 support levels and a possible move back towards the low $160s hit midway through Tuesday’s session.

LTC/USD 24/01/18 Hourly Chart

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Ripple Following the Pack for Now

Investors would have been forgiven for forgetting about all of the negative sentiment surrounding the cryptocurrencies on Tuesday, with Ripple having rallied 8.4% to an intraday high $1.44883.

The negative sentiment would have certainly contributed to the post high sell-off that saw Ripple ease back to a $1.29552 close, with Ripple’s 3.07% loss for the day on the higher side.

For Ripple investors, the good news will be the fact that Ripple was able to break through to $1.44 levels, which has likely contribute to today’s performance, with Ripple down just 0.42% to $1.3252 at the time of writing.

It’s looking a bullish for Ripple, but it’s going to need to buck the trend, with only Stella Lumen’s XLM in positive territory among the majors, up 5.81 to $0.5119 at the time of writing.

XRP/USD 24/01/18 Hourly Chart

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USD Gets Hammered, with Stats Bringing the EUR and GBP into Focus

Earlier in the Day:

Economic data through the Asian session this morning was on the lighter side, with stats limited to Japan’s December trade figures.

Japan’s adjusted trade surplus narrowed from ¥0.36tn to ¥0.9tn, with a 14.9% surge in imports driven by rising fuel prices, overshadowing a solid 9.3% rise in exports in December.

While the import numbers ballooned as a result of rising fuel prices, the export figures reflect solid demand for Japanese goods, supported by a weaker Yen through 2017, with exports to China seeing a sizeable increase.

The Yen showed little movement upon release of the figures, moving from ¥110.176 to ¥110.166 against the Dollar upon release of the numbers, with the Yen up 0.43% to ¥109.84 against the Dollar at the time of writing.

With Trump having started imposing trade tariffs on certain sectors, the latest figures will likely be scrutinized by the U.S administration. Trump has previously held talks with Prime Minister Abe and indicated a need to address trade terms that remain unfavourable for the U.S. Japan’s trade surplus hit the highest in 2-years in December.

Elsewhere, with a softer U.S Dollar, the Aussie Dollar was up 0.16% to $0.8013, with the Kiwi Dollar also up 0.26% to $0.7374 ahead of tomorrow’s 4th quarter inflation figures, which could give the Kiwi Dollar that sinking feeling again.

In the equity markets, it was a less spectacular session, with the gains in the Japanese Yen pinning back the Nikkei, which was down 0.61% ahead of the close, with the Hang Seng and CSI300 also seeing red, down 0.28% and 0.06% respectively.

Bucking the trend, was the ASX200 which ended the session up 0.40%, supported by gains in the big-4 and a pickup in oil and mining stocks through the session.

The Day Ahead:

Following the positive economic sentiment figures out of Germany and the Eurozone on Tuesday this morning’s prelim December private sector PMI figures out of France, Germany and the Eurozone will be in focus this morning.

While the prelim figures are forecasted to be on the softer side, the EUR is unlikely to be dented too much by the numbers, which will still be considered positive from an economic outlook perspective. The devil will be in the details however, with new orders, employment and price pressures needing to remain robust at the end of the year.

At the time of writing, the EUR was up 0.23% to $1.2327, with focus likely to shift to tomorrow’s ECB press conference once the data has been released. Dollar weakness will be an issue for Draghi and the team, which leaves the EUR open to a slide should Draghi pin backs hope of a shift in policy towards interest and deposit rates.

For the Pound, economic data includes wage growth and unemployment numbers that will provide further direction for the Pound, with forecasts positive.

At the time of writing, the Pound was up 0.31% to $1.4043, with Dollar weakness contributing to the Sterling rally that has been an impressive one, hitting $1.4 levels for the first time since the EU Referendum result.

Across the Pond, a quiet economic calendar through the start of the week has left the Dollar struggling with the FED’s rate hike forecasts largely priced in. Sentiment towards ECB monetary policy has also become more hawkish, adding pressure to the Dollar.

Economic data out of the U.S this afternoon includes prelim December manufacturing and service PMI numbers for December, together with existing home sales. Services PMI and existing home sales numbers will be the key drivers. Based on forecasts, sentiment will be mixed with service sector activity forecasted to pick up, while existing home sales are forecasted to fall, following November’s sizeable increase.

At the time of writing, the Dollar Spot Index was down 0.28% to 89.874, with the Dollar at the mercy of the EUR and the ECB this week, any revival needing a dovish Draghi.

Buying on Dips: Is it the Right Time to Buy Bitcoin and Cryptocurrencies?

Last year provided cryptocurrency investors with exponential returns, with the talk of bubbles doing little to deter the inflow of investor money through the year. The cryptomarket’s total market cap crossed the $800bn mark in the first week of January before the talk about a correction saw the market cap give up more than $300bn to 2018 low $428bn and change on 17th January.

Adding to the allure of the cryptomarkets is the fact that Bitcoin no longer dominates the space, with Bitcoin’s market cap dominance falling from as high as 86% in the early part of last year to 34% by Friday’s close.

With more than 1,400 cryptocurrencies to choose from, buying on the dips may not be for the faint-hearted, but does give the rewards that are justifiable when considering the risks involved.

Knowing when to jump back in and being able to sit it out until the slide has come to an end and it goes without saying that it’s better to buy on the up than on the down. It’s also worth considering which of the cryptocurrencies saw the heaviest losses, as these are likely to see a more significant post-crash rally. Such a process does require some caution, however. When looking at the cryptocurrency list, it would be wise to select currencies that come from a project or company that has a promising future and has already made some inroads into delivering its blockchain tech to the marketplace.

Last week’s moves were sizeable. Bitcoin recovered from 2018 low $9,222 to $10,200 at the time of writing, while Ripple and Stellar Lumens saw more spectacular recoveries. The moves were more akin to a crash than a correction, which was reflected by the fact that many of the major cryptocurrencies recovered to pre-Crash Wednesday levels. A correction would have left the cryptocurrencies close to Wednesday’s lows.

The good news for investors looking to get into the cryptomarket is the fact that many of the cryptos are still sitting well below their respective all-time highs.

In spite of Ripple’s relief rally last week, Ripple is still down 53.8% from its all-time high at the time of writing, with Bitcoin down more than 45%, which means that there could be more upside on the horizon. The total market cap declined to $5127bn, which is still well below its pre-crash levels, with investors still sitting it out.

Investors ran for the hills in fear of the cryptocurrency bubble bursting. What the market has demonstrated its resilience and as the dust settles from the South Korean government’s threats to shut down the country’s crypto exchanges, investors money is likely to return. After all, it’s significantly harder to make similar gains in the more mature asset classes.

For investors that do enter the fray, it’s a choppy world out there and it does require a cool head. The cooler heads held it together last week, which provided significant support to the cryptocurrencies when it was needed. Choppy and volatile markets are drawing experienced traders from other asset classes. Buying on the dips is a profitable game if it’s done calmly and correctly.

To cater for the increased appetite for cryptocurrency trading, the number of trading platforms have been on the rise and also support cryptocurrency CFD trading, which is a popular alternative to holding the actual cryptocurrency, with traders able to trade on margin, enhancing returns with the use of leverage.

SimpleFX is one such platform that has evolved their offering to include cryptocurrency trading. When asked what the coming year holds for SimpleFX and their cryptocurrency customers, SimpleFX replied: ‘We will definitely keep on developing our offer, all the while keeping it simple. The next thing on our agenda will be to launch a completely new trading platform for desktops. This is bound to be an eventful year for cryptocurrencies. Regardless of how the situation is going to unfold, we’ll be there to help you capitalize on the trading opportunities that will definitely appear.’

He Did It Again – Vitalik Buterin Introduces DAICO, A new Fundraising Model. So what is DAICO?

As the cryptocurrency continues to grow, with 1,465 cryptocurrencies now in circulation, the competition is intensifying, with the benefit of hindsight likely to go against the marketers who were first to market. The various platforms that support the rapid growth in start-up companies raising funds through the Initial Coin Offering Market are about to change again.

Innovation has been in catch up mode since the arrival of the blockchain technology and 2017 was unprecedented in the number of ICOs and funds raised, which exceeded $6bn in 2017, with a total of 895 ICOs launched through the year.

Through the first few weeks of January alone, a total of $874.8m has been raised in the ICO markets and on the current trajectory, 2017 numbers are going to pale into insignificance.

What is DAICO?

The incentive to evolve the existing initial coin offering platform has certainly been significant when considering the Chinese government’s decision to ban initial coin offerings and fraudulent activity plaguing the ICO market. So it comes as a little surprise that a new decentralized fundraising platform is about to go live.

Russian-Canadian programmer Vitalik Buterin, who is the co-founder of Ethereum and Bitcoin Magazine, is looking to deliver a more democratic method of controlling Initial Coin Offerings, which is carried out on Buterin’s Ethereum platform, through the rollout of DAICO.

DAICO, encapsulates all of the original characteristics of the ICO’s fundraising process, whilst incorporating a Decentralized Autonomous Organization (DAO) protocol, giving investors greater control over the use of funds by companies and development teams through the lifetime of the project or company in question.

Buterin believes that the incorporation of the DAO protocol into the ICO platform reduces the risk of votes of any kind being subjected to 51% attacks, bribe attack, and other game-theoretic vulnerabilities, in order to manipulate outcomes.

The Difference between ICO and DAICO

The initial part of the fundraising process is similar to both the Initial Coin Offering and Decentralized Autonomous Initial Coin Offering platform.

Start-up companies and projects are able to raise funds, with investors buying project of company tokens with invested Ethereum coins.

At present, the respective project teams or company founders decide on the fundraising targets, with the terms of the Initial Coin Offering pre-defined. Common conditions advised include whether there is a capped or uncapped token sale, a dutch auction, a Know-You-Customer sale or other conditions defined by the team, including when the tokens will be remitted to the investor post end of the initial coin offering period, at which point the tokens become tradable and join the rapidly growing list of cryptocurrencies in circulation.

Once the token sale period ends, the two platforms diverge in terms of process, with the DAICO platform introducing a ‘tap’ step

In an ICO, it ultimately is in the hands of the project or company to use the funds as and when they see fit, with no oversight or control given to the investors. The principal of decentralization is flawed here, with a project or company’s funding essentially centralized in a decentralized world.

In contrast, the Decentralized Autonomous Initial Coin Offering Platform, through a mechanism referred to as ‘taps,’ gives the control of project or company funding to the investor.

A DAICO essentially has two criteria, the frequency of funding and the amount of funding released through each ‘tap.’

When a company or project requires access to additional funds that had been raised during the DAICO, the management team will need to make a request for an increase in ‘tap’ value.

The decentralized nature enables token holders to then vote on the request and ultimately decide whether the tap can be increased.

In the pre-blockchain corporate environment, key investors have board member representation to monitor the decision making process and use of funds to invest in the company’s future. As with the board of a corporate, board members vote in a decentralized manner, but the decentralization occurs with only a handful of shareholders, other board members having been hired to represent the company and be involved in the decision making process without the influence of each and every shareholder.

With a DAICO, each token holder will have a say on how a company or project uses the millions of Dollars raised during the token sale.

In addition to voting in favor of or against an increase in a ‘tap, token holders are also able to cancel a DIACO through a vote, returning remaining invested funds to the investors. The purpose of this particular feature is to not only ensure that fraudulent activity can be brought to an end but also to prevent frivolous spending, thus limiting an investors loss through the cancellation process.

In the event of a 51% attack that maliciously raises the ‘tap,’ the development team is able to simply reduce the ‘tap’ to the actual amount requested, or simply not draw on the excess funds. Token holders are not permitted to reduce the ‘tap’ by vote, this can only be carried out by development or management team. In a worst-case scenario, where a 51% attack cancels a DIACO, the developer can simply create a new DIACO.

Buterin adds that, with the DAICO platform, the two most damaging kinds of 51% attacks, i) sending funds to some other 3rd party chosen by the attacker, and ii) lowering the tap to keep funds stuck in the contract indefinitely are simply not possible with the DIACO platform.


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DAICO – A Democratise ICO

Buterin’s intention is to give token holders the ability to control a development team’s budget and loosen the purse strings as the team progresses and hits the milestones outlined in the white paper.

Where investors are satisfied with the progress, voters are likely to loosen the purse strings to give the development team greater flexibility to progress the company or project. On the flip side, investors can also bring an end to the project or development with a simple majority vote, which results in the remaining Ethereum coins being returned to the investor.

A DAICO is considered to reduce investor exposure to attacks, bribe attacks and other vulnerabilities including fraudulent activity.

While some may argue that start-ups require an element of freedom and that not all investors have the know-how to be fully involved in the funding requirements of a development, the avoidance of fraudulent and irresponsible behavior is an appealing one and will likely see DAICO well received.

It will be interesting to see how start-ups and project teams embrace the reasoning behind the creation of DAICO and launch on the DAICO platform, giving up the freedom that the ICO platform has to offer.

For now, Abyss is the first DAICO to hit the market, with the start of the DAICO scheduled for 7th February 2018. The Abyss team believes that DAICO will provide tangible solutions to ever-changing security needs, while also delivering transparency.

With so much bad press, DAICO is expected to minimise fraud, whilst specifying contribution and resolution rules and is expected to eliminate voting attacks that plague the ICO market.

It will be interesting to see whether Buterin takes it one step further, with the introduction of Source-Level Decentralized Autonomous Initial Coin Offerings, where the allocation of voting rights could be based upon the number of tokens held by investor, or simply by reputation, which comes from the consistency in quality of an investor’s contribution.

It would make perfect sense for an investor with more to lose to have a greater influence on whether funding the project or start-up should continue or be shut down, as it would make sense for an investor who has contributed more to have a greater understanding of funding requirements.

For now, next month’s first DAICO will give the cryptomarket a new platform to consider and all eyes will be on The Abyss and, not only how successful its token sales is, but also what issues the developers face as they look to gain access to funds in order to rapidly develop and grow the platform.

How to Buy Bitcoin in Italy?

What is Bitcoin?

In the wake of the global financial crisis, Satoshi Nakatomo created Bitcoin, the world’s first virtual currency. Nakatomo’s goal was to remove the government and central bank control on currencies through decentralization, whilst also eliminating the need for the more traditional banks that handle fiat currencies.

The global financial crisis was considered to be the final nail in the coffin for fiat currencies, with governments and central banks aligned to facilitate the printing of fiat money almost at free will.

From Bitcoin’s perspective, central banks and governments have largely remained on the sidelines, though there has been an increase in chatter from regulators. From Nakatomo’s perspective, things couldn’t have worked out better, with regulators more concerned with protecting the interests of investors than bringing an end to Bitcoin and the cryptomarkets in general.

While certain countries have been slow in recognizing Bitcoin as legal tender, others have been quick to embrace the virtual currency, which has seen the acceptance of Bitcoin amongst vendors and service providers explode in recent years.

Bitcoin’s price gains and the stories of rags to riches for many of its investors may have made the headlines, but of greater significance has been the blockchain technology behind Bitcoin. The blockchain is a general ledger that is decentralized and stored on all of the computers that form the Bitcoin network. The technology that was developed to go against governments and central banks are being adopted by these institutions today. Quite ironic considering Nakatomo’s intentions to bring down central banks the world over.

Since the creation of Bitcoin, there are more than 1,300 cryptocurrencies in circulation today and, assuming that regulators don’t clamp down on the evolution of the cryptomarkets, more are on the horizon and with it come dreams of exponential returns for investors.

How to Buy Bitcoin in Italy?

There are two ways to profit from Bitcoin’s fluctuations in Italy. The first and most common method is to buy the coin via exchanges such as Coinbase (The biggest Bitcoin exchange in the world which accept Italian residents) and hold it (or as the Bitcoin community call it  – HODL). The other way to trade Bitcoin in Italy is through Contract for Differences (CFD’s) with one of the brokers that provide cryptocurrencies trading in Italy.

Note that trading CFD’s allow you to trade Bitcoin’s price fluctuation and not to hold any legal right to own the coin.

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Step 1 – Open a Digital Wallet

A digital wallet is where you hold your cryptocurrencies and interacts others via the blockchain technology. There are many providers of digital wallets, however, it is important to make a deep research before you decide which one is the best for you. Currently, the most popular digital wallets provider is Blockchain.info.

Step 2 – Sign Up for Coinbase

This first step is to sign up for a Coinbase account. This will give you a secure place to store your bitcoin, and easy payment methods to convert your local currency into or out of bitcoin.

Step 3 – Connect your Payment Method

Following your registration, you must connect your preferred payment method to Coinbase. The supported payment method in Italy is wire transfer and credit/debit cards.

Step 4 – Buy and Sell Bitcoin

Following these steps, go to ‘buy page’ and now you can purchase Bitcoin. After starting your first purchase, complete your buy and the Bitcoin will be transferred to your account. Then, transfer your Bitcoin to your digital wallet, whether on Coinbase platform or another digital wallet that you can find (Sells work the same way but in reverse).

Where can I Use Bitcoin in Italy?

The use of Bitcoin in Italy is nascent relative to the more developed markets of the U.S, Japan, and South Korea, with the merchants accepting Bitcoin limited to Unixstickers and Armonie Sonore according to spendabit.

Bitcoin will likely become more widely used in Italy, but we would also expect the use of Bitcoin to trail the more established markets for some time, with Italy being a more traditional market. Volatility and regulatory uncertainty are factors to consider, with transaction times also a major issue for vendors at present.

Bitcoin ATMs in Italy

For those less interested in using a Bitcoin exchange or CFD’s, Bitcoin ATMs are also an option for buyers in particular, though some ATMs also provide the option sell.

Bitcoin ATMs provide an altogether different platform for the buying and selling of Bitcoin to the more traditional Bitcoin exchanges.

In Italy, there are a total of 17 Bitcoin ATMs are present, according to Coinatmradar, with Bolzano having 5 Bitcoin ATMs and Milan and Florence each having 2, while Rome has just 1.

The average fee for a buy order is 8.54%, calculated based on 1,126 Bitcoin ATMs worldwide, with redemption fees averaging at 7.03%, calculated based on 410 ATMs globally, the number of ATMs providing the option to sell far fewer than those that facilitate the purchase of Bitcoins.

In Italy, buying fees are on the more competitive side, ranging from between 2.9% to 8%, whilst selling fees can be in excess of 11%, with fees reaching as high as 11.5% in Florence.

For the nearest Bitcoin ATM, Coin ATM Radar is a recommended website to search for the nearest Bitcoin ATM. With such a small number of Bitcoin ATMs and only a few that offer the option to sell Bitcoins, the travel distances will be too great and use LocalBitcoin may be a more viable alternative for those looking for an alternative to Bitcoin exchanges.

Conclusion

While Italy’s membership within the Eurozone provides a reasonable degree of freedom for Bitcoin, the country has been on the slower side to accept Bitcoin as an alternative to the EUR and other fiat currencies.

The ECB has been clear that the recent gains in Bitcoin are not sufficient to raise any alarm bells for the Central Bank or European Parliament, though concerns remain over its use in the criminal world.

While a greater number of Italian venders are likely to accept Bitcoin in the future, Bitcoin has yet to take Italy by storm and Italy may remain one of the Europe’s slower nations to more widely accept Bitcoin in the future, with the Denmark, Norway, Sweden, the UK and Estonia amongst the most advanced nations in the Bitcoin world.

How Many Bears Does it Take to Burst a Bitcoin Bubble

If the markets were of the opinion that Bitcoin was enemy number one to the financial markets, the torrent of opinions coming from leading figures in the financial industry in the last few days certainly justifies such a view.

With the cryptomarkets falling back from December and the start of the year record highs, leading figures have seized the opportunity to kick Bitcoin while it’s down.

Goldman Sachs this week issued a warning that cryptocurrencies have now moved into bubble territory, with the warning coming in spite of the Bank setting up a Bitcoin trading desk for its clients, looking to benefit from the heightened interest in the cryptocurrency market.

UBS Chairman Weber has also joined the ranks of the bears, stating that Bitcoin is not an investment that the Bank would advise on.

Perhaps JPMorgan CEO Jamie Dimon feels somewhat vindicated for his rants last year, though even Dimon shifted away from his previous call on Bitcoin being a fraud, whilst maintaining his bearish view on Bitcoin this year.

The World Economic Forum in Davos has provided the platform for the Bitcoin bears to speak in one voice and one wonders whether cryptocurrency investors that entered the market late last year are beginning to listen.

One would certainly think that there is some influence, when looking at the cryptocurrency market caps this week.

Bitcoin’s market cap has fallen to $175.6bn, with Ethereum dropping to $93bn and Ripple down to $48.6bn.

When looking at how far the market caps of the 3 largest cryptocurrencies have fallen in just a matter of weeks, such declines would suggest that speculative investment has been driving the cryptomarkets and few can deny that. After all, it would be imprudent to suggest that 400% moves in a matter of days is based on a cryptocurrency’ tangible offerings, which continue to be limited at present.

With talks of hackers stealing millions from cryptomarket initial coin offerings, not to mention from the crypto exchanges themselves, it is more akin to the Wild West than an investment option for the everyday investor on the street.

Governments and regulators have also been vocal, with news of the South Korean government imposing a 24.2% taxes on the crypto exchanges another blow for the asset class, which continues to face uncertainty.

If bubble psychology is anything to go by, the emotional investment that contributed to the meteoric rise in cryptocurrencies last year may have now shifted to a more logical one, with the increased number of calls for caution akin to the preludes of a bubble ready to burst.

For Bitcoin and the rest of the cryptomarkets, there is just one distinct difference and that is the fact that the cryptomarkets lack regulatory oversight.

Cryptomarket manipulation has been rife and is unlikely to abate anytime soon, with the Bitcoin Billionaires eager to maintain current levels.

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Looking at Bitcoin’s moves in the last 24-hours, Bitcoin fell 13.2% from Monday’s open to yesterday’s intraday low $10,028.4 before recovering to log a 6.5% loss for the day.

Through the first part of this morning, Bitcoin fell 5.62% from the open to this morning’s $10,202 intraday low.

Few would argue that the trend is nothing other than bearish at present, with even the most optimistic needing to pause and consider what lies ahead for the day and the remainder of the week.

At the time of writing, Bitcoin has managed to recover from its intraday lows, down 2.76% to 10,510.7, finding plenty of support at $10,200 levels, but the question does need to be asked on how long the support levels will last before the market buckles and begins to move southwards with more conviction.

While the decentralized ethos of Bitcoin and the cryptocurrencies in general is meant to keep it free from the influences of governments, regulators and financial institutions, what we have seen in recent weeks is quite the opposite.

There is no doubting that blockchain technology is one that will likely stand the test of time, the doubts are whether the cryptocurrencies can hold on to current levels.

History suggests not, but that doesn’t mean that there aren’t going to be some wild swings before it all moves to levels that even the most bearish can stomach.

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Bitcoin Cash, Litecoin and Ripple Daily Analysis – 23/01/18

Bitcoin Cash Slides Again

There’s been little improvement in the cryptomarkets this week, with a brief moment of hope through the early part of Monday evaporating, as another sell-off ensued that has yet to come to an end.

Cryptomarket sensitivity to news remains in the wake of the South Korean government’s moves over the last 2-weeks, with a number of reports weighing on the cryptomarkets including an Ersnt and Young report that estimated that as much as 10% of funds raised through initial coin offerings have been stolen by hackers. That’s quite a sum considering the reported amounts that have been raised through ICOs in recent years and could ultimately lead to a far greater degree of government scrutiny.

At the time of writing, Bitcoin Cash is down 2.21% to $1,569.4, now sitting well below its weekend high $2,111 and Monday $1,806.6 as uncertainty continues to plague appetite for the cryptos.

Adding to the negative sentiment was the release of a report from one of the Wall Street firms, suggesting that Bitcoin could see a 70% to 90% price correction this year.

For the rest of the day, the crypto news wires will certainly play their part, with Bitcoin Cash looking dovish at the time of writing, sitting just above its intraday low $1,548.3.

With losses across the major cryptos, support may need to kick in at sub-$1,500 levels if Bitcoin Cash doesn’t move back through to $1,600 levels in the early part of the day.

BCH/USD 23/01/18 Hourly Chart

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Litecoin in a Spin

There’s been no respite for Litecoin this week, with the weekend’s $210 levels now a distant memory as investors pull out for a 3rd consecutive week.

At the time of writing, Litecoin is down 4.4% to $171.53, with sub-$170 support levels having already been tested in the early part of the day.

As investors continue to browse through the cryptocurrencies in order to identify viable investment opportunities, based on positive outlooks towards the respective blockchain technologies, the lack of progress by the Litecoin team to introduce its technology to a wider market audience will continue to peg the cryptocurrency back behind the likes of Bitcoin and Bitcoin Cash.

For Litecoin, the speculative investor is going to need to return for a move back to the dizzying heights of sub-$400.

With $170 already tested, a fall back to sub-$170 levels could see Litecoin take a deeper dive to the low-$160s before support kicks in, with a move through to the high $170s needed to avert a deeper sell-off.

LTC/USD 23/01/18 Hourly Chart

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Ripple Brings up the Rear

The markets will have been impressed with Ripple’s bounce back last week, but Ripple’s attempts to rally at the start of today have been thwarted, with Ripple down 6.32% to $1.25218 at the time of writing.

With Ripple sitting perilously close to its intraday low $1.22874 and well below an intraday high $1.37272, it’s looking a little testy for Ripple, with the steeper declines of last week making investors all the more sensitive to the possibilities of a big fall today, with Ripple having hit a low of $1.12688 late on Monday.

Ripple will need to move back through to $1.30 levels to avoid another sell-off to sub-$1.20 levels, with the negative sentiment in the market capable of leaving Ripple in a slide down to sub-$1.10 levels.

Until the negative sentiment subsides and the cryptocurrencies are able to hold on to intraday highs without investors jumping ship off the back of market chatter, any meaningful rallies look to be off the cards for now.

XRP/USD 23/01/2018 Hourly Chart

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BoJ Holds with Equities on the Move, While the USD Struggles On

Earlier in the Day:

With no material stats released through the Asian session this morning, the market focus was on the BoJ monetary policy decision.

The BoJ held rates unchanged at minus 0.1%, with 10-year government bond yields to also be maintained at around 0%, which was in line with market expectations.

While policy was left unchanged, the BoJ was somewhat more optimistic on its outlook on inflation, with the BoJ expecting inflation to continue to move towards the 2% target, supported by improving economic conditions.

The Yen moved from ¥110.899 to ¥110.674 against the Dollar, finding support from the optimistic inflationary outlook. Despite the gains in the Yen, the vote of 8:1 in favour of standing firm continues to suggest that there is no likely move on the horizon.

At the time of writing, the Yen was up 0.12% to ¥110.79 against the Dollar, easing back from the post announcement intraday high, with the BoJ press conference yet to come.

Elsewhere, the Aussie Dollar and the Kiwi Dollar were down, the Aussie Dollar down 0.36% to $0.7988, while the Kiwi Dollar was down just 0.03% to $0.7326.

The story of the session was in the equity markets however, with the overnight rally in the U.S driving risk appetite through the session. All the majors were in positive territory, led by the Nikkei, which was up 1.29%, with the Hang Seng, CSI300 and ASX200 all making solid ground at the time of writing.

Earnings season is certainly driving demand and, with the BoJ and the RBA in a holding patterns, there’s little to throw the markets into a spin for now, with economic data continuing to impress.

The Day Ahead:

After a quiet Monday that saw the EUR move further ahead against the Dollar, economic data out of the Eurozone this morning includes January economic sentiment figures out of Germany and the Eurozone.

In spite of Chancellor Merkel’s troubles prior to the SDP vote last weekend that supported coalition talks to continue, the German economy has continued to perform, with sentiment seemingly unwavering, supported by the positive economic indicators going into the New Year.

Forecasts are EUR positive, though by how much the EUR moves will likely be Dollar dependent, with appetite for the EUR likely to be tested ahead of Thursday’s ECB press conference, where Draghi may well deliver a dovish note to jawbone the EUR back towards $1.20 levels.

At the time of writing, the EUR was down 0.03% to $1.2258, with today’s data likely to have a short-term impact ahead of tomorrow’s private sector PMI figures and, more importantly, Thursday’s ECB monetary policy decision and press conference.

For the Pound, the lack of macroeconomic data did little to halt the recent run, with the Pound surging towards $1.4 levels on Monday.

For the day ahead, stats are limited to January’s CBI Industrial Trend Orders, which are projected to be GBP negative, though we will expect the numbers to have a relatively muted impact, as Brexit continues to provide direction.

There’s been very little negative chatter on trade talks of late, which has contributed to the recent rally along with the softer Dollar. With hopes of a favourable transition period, things have begun to favour a softer Brexit, though things can change quite rapidly.

At the time of writing, the Pound was down 0.04% to $1.3982, with Brexit chatter the key driver, today’s Industrial Trend Orders unlikely to have a sustained impact after release.

Across the Pond, it’s another quiet day on the data front, with no material stats leaving the Redbook for the markets to consider.

For the Dollar bulls, an immediate sell-off was averted overnight, with the Senate voting for the extension through to 8th February, but the reality remains that the short-term extensions are not addressing the main issue, with the markets having to now face another round of votes in a few weeks.

At the time of writing, the Dollar Spot Index was down 0.03% at 90.387%, following Monday’s slide, with Capitol Hill chatter likely to remain a key driver ahead of the 4th quarter GDP numbers later in the week.

Cryptomarket in Recovery, Led by Stellar Lumens

It’s a 2nd rising from the dead for the cryptocurrencies, with last week’s Wednesday sell-off still fresh in the minds of the investor, though looking at the moves through the early part of today, one could be mistaken for thinking that its risk on and investors have managed to spend the weekend recovering from last week’s volatility, with new found optimism going into the week.

It’s certainly been a rollercoaster of a January, with the cryptomarkets having entered the New Year with high hopes of a continued rally from December’s gains that were impressive.

Perhaps the writing had been on the wall of a possible crash on news of a regulator looking to impose itself on the market, with the cryptomarkets having discussed the likely negative impact of such an event through the last quarter of 2017.

For now, the markets are looking ahead however and hoping for a better week than the last two that saw Bitcoin fall to 2018 low $9,222.00, with its market cap falling to sub-$200bn as investors ran for the hills.

The order appears to have been restored and, while the start of the day had seen a sea of red across the cryptocurrency board, things have improved through the morning.

At the time of writing, Bitcoin is up 2.78% to 11,880.55, with the markets seemingly ignoring the futures market, with the Cboe February contract up $350 to $11,750, recovering from an intra-day low $11,220.

If there were any lessons from last week, it would be the fact that investors should take less guidance from the Bitcoin futures market, with Bitcoin’s weekend high $13,052.12 likely to have been supported by the fact that the futures markets were closed through the weekend.

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For the rest of the day, the market resilience to the negative news this morning will likely continue to support Bitcoin and the gang, with news of the North Korean government’s hacking into a South Korean exchange, stealing millions of Dollars to support its arms programs amongst other things, have caused little damage.

Bitcoin’s market cap has moved back through to $200bn levels, having struggled to recover in the wake of the last two weeks of volatility, with investors likely to continue to flood back in, assuming there are no further market shocks in the early part of the week.

Bitcoin’s recovery will likely be the tonic for the broader market. Stellar Lumens has taken the charge at the start of the week, up 6.84% to 0.4924 at the time of writing, with Ethereum looking to put last week’s woes behind, up 2.77% to $1,076.13.

If the sentiment continues to improve, there are certainly some gains to be had across the major cryptocurrencies, as they look to make a move towards their weekend highs, which are well below the all-time highs seen in late December and early January, before the double-dip.

While it’s looking bullish, some profit taking will be likely, however, with investor expectations of 100% moves on a day now well and truly managed, for now at least.

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Mortgage Rates and Applications on the Move

15-year and 10-year rates saw more significant increases, with the 15-year rate rising by 0.11 percentage points to 3.38% and the 10-year rising by 0.16 percentage points to 3.38%.

Average interest rates for 30-year fixed mortgages with conforming loan balances rose from 4.23% to 4.33% in the week.

While mortgage rates were on the rise, the number of mortgage applications were also on the rise, with total mortgage application increasing by 4.1%, with applications up 5.6% compared with the same time last year.

The gains were attributed to a 4% surge in refinance mortgage applications, with the increase in mortgage applications defying the week’s increase in mortgage rates.

Inverse correlations between mortgage rate applications and interest rates have been broken going into the New Year and this is likely to be attributed to the stark realization that mortgage rate rises are likely to continue for the foreseeable future.

The government’s inability to extend funding until the 2nd week of February will have eased upward pressure on mortgage rates at the end of last week but, with the Senate taking a 2nd vote later today, hopes are that the federal government will receive funding through an extension, which will lead to rates making further moves over the near-term.

Unfortunately for new home buyers, the rise in rates is unlikely to lead to a material increase in supply that could dent the housing market recovery and save a few pennies on the purchase price, to offset any increase in mortgage payments.

With a lack of supply expected to continue to fuel the housing sector, it will take some time before demand begins to ease, with mortgage applications for new home purchases traditionally less sensitive to the weekly moves in mortgage rates and more sensitive to the outlook on mortgage rates and the economy as a whole.

The incentive is certainly there for homeowners in particular, to look to take advantage of current rates, with expectations being for mortgage rates to rise as high as 4.6% this year.

For now, the markets have also under-priced the likely number of rate hikes by the FED this year, with signs of a build-up in inflationary pressure and a positive economic outlook supporting at least 3-rate hikes for the year. Some FOMC voting members have even penciled in 4-hikes, which would certainly place a 4.6% rate on the lower side of forecasts for 2018.

Looking beyond the U.S, positive sentiment towards the global economy, with Europe and Asia performing in sync with the U.S economy, will add further pressure on bonds, with further rises in bond yields another negative for mortgage rates. Added to that is the fake news of China wanting to cut its exposure to U.S Treasuries, which would see bond yields rise further, with the fake news perhaps not as fake as some would suggest.

All things considered, mortgage rates are unlikely to be going into reverse anytime soon, with even a government shutdown unlikely to have a material impact barring a very short-term blip.

Bitcoin Cash, Litecoin and Ripple Daily Analysis – 22/01/18

Bitcoin Cash Struggles

An immediate crisis may have been averted last week, with the cryptomarkets recovering from Wednesday’s lows, but the threat remains real and is unlikely to disappear anytime soon.

Fresh news hitting the wires of the North Korean government hacking a South Korean cryptocurrency exchange, steeling millions of U.S Dollars is yet another reason why the South Korean government may go through with their threat and bring down one of the largest cryptomarkets.

Granted that the general sentiment is that investors will be able to circumvent and the North Korean government can hack exchanges elsewhere, but there will be some fallout nonetheless.

At the time of writing, Bitcoin Cash was down just 0.57% to $1,759.00, easing back from an intraday high $1,792.7 and a weekend high $2,110.00 hit late on Saturday, with the cryptocurrencies seeing the weekend trends continue.

For the rest of the day, Bitcoin Cash will need to hold on to $1,700 levels to avoid a fall back through to the low $1,600s, with the cryptocurrency board a sea of red at the time of writing.

BCH/USD 22/01/18 Hourly Chart

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Litecoin Pulls Back from Weekend High

It’s been a choppy few days for Litecoin, which had struggled to hold on to recovery gains late last week and end the week at sub-$200 levels, falling back from $240 levels held at the start of the week.

While Litecoin managed to break through to $200 levels on Saturday, hitting a weekend high $214.88, the gains were short lived and its’ been downhill since, with Litecoin down 0.13% to $191.00 at the time of writing.

For Litecoin to avoid a pull back to sub-$180 levels, a move back through to $200 levels will be needed through the day, though with more bad news hitting the crypto news wires, investors are likely to still be relatively sensitive, which will likely limit any major rallies through the day.

LTC/USD 22/01/18 Hourly Chart

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Ripple on the Move

Ripple’s dip to Friday close 76% rally last week was an impressive one and will certainly give Ripple a greater standing in the cryptomarkets.

Ripple’s greater support is likely to be attributed to the fact that Ripple’s blockchain technology has already been adopted by financial institutions and has gone mainstream, whilst others are in development stages or have made little progress in widening their client base.

At the time of writing, Ripple was up 0.58% to $1.3708, leading the way amongst the majors, with Ripple having eased back from a weekend high $1.63107 and an intraday high $1.429098.

For the day ahead, while there is some negative news hitting the wires, Ripple will be looking to break through to $1.45 levels, which would support a move back to $1.50, though its likely to be a choppy day, with today’s intraday low $1.324196 reflecting strong support levels at $1.32.

XRP/USD 22/01/18 Hourly Chart

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Capitol Hill and the USD in Focus, as the SDP saves the day for the EUR

Earlier in the Day:

With no material stats released through the Asian session this morning, the markets were focused on political events, with the failure of the Senate to reach a vote in favour of extending government funding through to next month one the main events of the weekend.

With talks being extended through to Sunday and the Senate adjourning until Monday, where a 2nd vote is expected to pass, there was little impact on the markets through the Asian session.

Previous shutdowns have been relatively short lived and with muted impact on the U.S and, more importantly, the global economy and the financial markets have generally been unscathed.

At the time of writing, the Yen was down 0.03% to ¥110.8 against the Dollar, with the Aussie Dollar down 0.06% to $0.7990, while the Kiwi Dollar was up 0.03% to $0.7279.

It was a mixed bag in the equity markets, with the Nikkei down 0.19% and the Hang Seng down 0.04%, while the ASX200 had a choppy day, down 0.18% at the time of writing. The CSI300 bucked the trend, up 0.75%, finding continued support off the back of last week’s GDP and industrial production figures.

The Day Ahead:

There are no material stats scheduled for release out of the Eurozone this morning to provide direction for the EUR, with the markets focused on Germany and the SDP’s weekend vote to move ahead on coalition talks with Merkel’s CDU Party.

The vote on Sunday was certainly an important one for Merkel’s career and the EUR, with Merkel a key political figure within the region.

At the time of writing, the EUR was up 0.01% to $1.2223, with a pickup in Dollar strength pinning back any EUR rally, though the real drama for the EUR will be on Thursday, where Draghi may look to sledge the EUR to bring it down a peg or two.

For the Pound, it’s another quiet day on the macroeconomic data front, which leaves focus on the UK government and Brexit. With the House of Commons having already passed the EU Withdrawal Bill, the House of Lords are expected to vote this week and talks of bringing an end to the House of Lords will likely resurface in order to keep any dissent at bay.

Any negative chatter on the Bill will likely weigh on the Pound, with Merkel soon to be free from the domestic political drama to focus on the EU and Brexit, which will unlikely be a positive for the Pound. Spain and the Netherlands have looked to take a softer approach on Brexit, but following the latest election, Merkel will likely take a harder stance to regain popularity and Macron may well go down Merkel’s path.

At the time of writing, the Pound was up 0.03% to $1.3862.

Across the Pond, focus will be on the Senate and this evening’s vote on extending government funding through to the second week of February. While the markets are less than impressed with the inability of a Republican House and Senate to be able to agree on terms for an extension, the Dollar will likely be the only victim of another failed vote.

At the time of writing, the Dollar Spot Index was up 0.1% to 90.667 and with no material stats scheduled for release today, the Senate vote will be the key driver.

For the Loonie, November Wholesale Sales is in focus, with sales growth forecasted to slow, which will be a negative for the Loonie, though the any impact with be short lived, with market focus being on NAFTA talks, which kicked off on Sunday.

JoyToken will Launch its Token Generation Event on February 27

JoyToken is delivering an Ethereum-backed platform and protocol for online gambling that incorporates smart contract capabilities to reward players, developers, and the gaming operators.

JoyToken’s vision is ‘Smarter Games for Smarter Players,’ and will look to deliver smarter games to existing and new casino players by bringing the industry together and provide a central platform for developers, gamers and gaming companies, while also giving access to the smaller independent developers who lack the reach in the existing market.

One of the key issues faced by the industry is trust, with personal data has been far from secure.

Privacy issues are resolved with JoyToken’s platform, with the blockchain technology providing anonymity that protects gamer information. JoyToken will also be taking the gaming industry to a worldwide audience, breaking down legal and regulatory barriers that existing online gaming companies face, while also drawing in millennials looking for more from their online gaming experience.

JoyToken is certainly taking things seriously with CFO of Mr. Green as their advisor and a team that consists of senior executives from bet365 and Poker Stars.

Joy Token’s sale begins on 27th February and ends on 29th March of this year, with a total supply of 700,000,000 tokens priced at $0.20 per token.

Discounts are offered to early buyers with a 50% discount offered through the currently active presale that ends on 13th February.

With JoyToken’s partnership with PlayCosmo casino, licensed in the UK, Malta, and Curacao, JoyToken’s platform will provide developers with immediate access to PlayCosmo, delivering an optimal testing environment before release to online gaming companies.

For interested parties, more information can be found on JoyToken.io

Crypto Recovery or the Beginning of the End

Bitcoin looks to have averted a crisis for now, with Bitcoin rising 2.55% to an $11,485 close on Thursday, with the sub-$10,000 levels of Wednesday behind for now.

The markets certainly responded in panic to the South Korean government’s threats of shutting down the crypto exchanges, but unlike the dot.com era, cryptocurrencies didn’t get wiped out.

For now the general sense is that the cryptoworld can continue, even if the South Korean government does follow through with its threat, though the chances of all of the crypto exchanges being shut down may have eased somewhat The government’s first step will be to review the exchanges and their policies on KYC, money laundering and if they have addressed the issue of anonymity. There’s plenty of incentive for the exchanges to meet the basic requirements of the regulators. After all, the alternative would be closure.

Going into the New Year, there were calls of Bitcoin hitting $40,000 by the end of the year, while some continued to call the cryptomarket a bubble ready to burst.

The takeaway from this week seems to favour neither camp. For Bitcoin to rally through to $40,000 by the end of the year, Bitcoin’s issues will need to be addressed. For now, there is talk of some enhancements by the core development team that could provide some transaction speed improvements, but with Bitcoin’s competition far more favourable on speed and transaction fees, more is going to be needed.

So, with the bubble firmly intact, it’s onwards and upwards for now. For the crypto bulls, the rebounds are likely to cement the cryptos and how the cryptocurrencies progress will gradually become more aligned with the success of the blockchain technologies that each have to offer.

We’re not there yet and more turbulence is likely to be on the horizon until the market matures and investors become more attuned to the key drivers.

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At the time of writing, Bitcoin was up 4.84% to $11,792.15 in what has been a day of tighter ranges, with Bitcoin’s intraday low of $11,054.84 hit at the start of the day.

There’s been little bad press through the day to shock the markets, which is good news going into the weekend, though for the rest of the day the futures market could be the stumbling block, with the Cboe’s February contract down $15 to $11,750, marginally lower than Bitcoin’s current value.

The markets may have had a lesson in the week on the futures market and the fact that some degree of divergence is to be expected, as is the case with the more mature asset classes.

We’ve seen the futures market pin back the crypto’s, but have very little influence on the upside and investors may need to pay less attention to the futures markets for direction, particularly when considering the fact that the investors on the futures markets are newer to the cryptocurrency game.

Bitcoin is here to stay and the only immediate threat to Bitcoin remains Bitcoin Cash. The markets are certainly taking a closer look, with Bitcoin Cash up 7.39% to $1,810 at the time of writing.

These returns may not be as impressive as historical rebounds, but when comparing today’s gains to the more traditional asset classes, recoveries from more than 50% losses would have taken a far shallower path to current levels.

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