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Economics

Bitcoin - Respecting the EcosystemHonestly, I just wanted to put in the word 'ecosystem' because it's such a buzzword in these ICOs I'm seeing. However, I like to think it's much more applicable in the case of this analysis. The market has been choppy. In fact, that's an understatement. Amanda Bynes' plastic surgeon wouldn't touch this market. Overall, though, we're in a bear market. Plain and simple. Isn't looking good for stocks, either, and that much is certain. The question that seems to be on everyone's tongue is how it will affect the cryptocurrency market. Is this the black swan event that will bring many over to crypto? Or are we going to see smart money exit pump for the hills? Keeping this very important question in mind, we'll use Technical Analysis and a fundamental understanding of the Bitcoin Market to analyze what certain price levels mean, as well as the lowest possible prices, explained with reasoning. A major player in this market that I see so many analysts overlook are the miners. They essentially hold up the network. They provide the intrinsic value of Bitcoin. And, yes, there is intrinsic value. Hardware Costs + Electricity Costs + Opportunity Costs (the computing or hashing power could be attributed to mining another coin, performing another task, or you could sell the GPUs since they are scarce at the moment). On top of that, you have the implications of the Network Effect adding a premium on the open market. However, we're going to focus on the intrinsic value setting a price floor for Bitcoin. Bitcoin is currently forming a massive bull flag under classical charting principles (yes, I'm aware the spike down to sub $6k may nullify the flag under certain standards, but I see the immediate response bounce as validating a shakeout more than a bull flag invalidation). Looking over the wall street psychology cheat sheet, I'd venture to say we're around denial. I didn't see enough capitulation with $6000. You can find a copy of the psych cheat sheet here, in case you aren't familiar with it. steemit.com Based on Wyckoffian Logic, we had the low volume rally on the inclination to touch the bull flag upper-trendline, and almost immediately reject it to continue the sell off. Effectively, we're going to see the price mark down under the same logic, which you can find a nice summary of here: swingalpha.com The ride from 10 to nearly 20k (20k on some exchanges, especially when the Kimchi premium was still around www.coindesk.com) was the buying climax. I still don't believe we've seen the selling climax quite yet. Here on the chart, I'm going to use some of these concepts to explain some of these highlighted areas and what they mean for the outlook of 2018. I'm open to critique and discussion in the comments below. In addition, I'll happily elaborate on any point made which I did not explain enough. Current Mood: Neutral leaning bearish I know, I know. I tweeted a few days ago that I was cautiously optimistic. However, the third white soldier quickly turned to a spinning top (generally a reversal signal that needs confirmation). Please keep in mind that, Long-term, as a crypto advocate, I'm incredibly bullish. The reason I'm *cautiously* bearish is we haven't printed a lower low yet. On the daily, our most recent swing low was higher than the previous $6k drop. So, unless we break the previous swing low (indicated by the arrow and accompanying line), we're sideways at the very least. HOWEVER, our recent swing highs have been lower and lower, with our most recent swing high failing to break the median on the bearish pitchfork (more analysis on the pitchfork below).
BITFINEX:BTCUSD
by BisonsTrades
1
Brexit terms agreed! Key points to note is: 1) The UK will be able to negotiate, sign and ratify its own trade deals 2) The UK will still be party to existing EU trade deals with other countries These are hugely beneficial agreements for the UK, as we saw in the massive jump in the GBPUSD. This news was a surprise to the market, resulting in a move of more than 150pips upwards. Today, the focus will still be on the GBPUSD, with CPI data expected to be released at 2.8%. With this anticipation for inflation to return towards the BoE’s target range, this might be another positive towards the push for higher interest rates. Giving the GBPUSD legs to move higher, bouncing off the 1.4030 support level.
Long
by JinDao_Tai
1
EURGBP to reach for the "stars"?The EURGBP looks like it is on track to break above 0.90 resistance level, which was last breached in September 2017. If the trade setup is completed (breaking strongly above 0.90), I anticipate a massive move towards 0.93 For this to happen, we need either the GBP to weaken, possibly due to Brexit uncertainty, or the EUR to strengthen, possibly arising from better economic data and more hawkish ECB. However, we have the ECB rate decision and press conference tomorrow. Prudent thing to do, will be to wait for the news, identify a directional bias, and confirm resistance has been broken.
Long
by JinDao_Tai
Bank of Canada Rate DecisionLater tonight, we have the Bank of Canada making a decision on the overnight rate. Expectation for rates to be held at 1.25%. However, will the BoC surprise the market? I’ll think that that is unlikely. In January, the BoC increased rates, highlighting that this decision was likely to have been brought forward from April. Furthermore, there isn’t a press conference accompanying this decision, with a press conference by the BoC only scheduled in April. However, the statement could have a more hawkish tone, taking the USDCAD lower, especially if price breaks below 1.2900.
Short
by JinDao_Tai
Stronger ADP...EURUSD for a short retraceVolatility ahead. In addition to the uncertainty on the USD arising from the trade war (increased tariffs), and change of personnel in the White house, from today till Friday, we see several economic data release and policy decisions which could surprise the market and also bring about higher volatility. Tonight, we have the USD ADP NFP, which is released 2 days ahead of the Govt NFP release on Friday evening. This is data is likely to bring some short term volatility to the USD, with anticipation that data released to be better than forecasted, close to previous month. If EURUSD breaks below 1.2400 a quick sell towards 1.2350 could be viable.
Short
by JinDao_Tai
Short NZD?End of a massive week where we saw prices of the major currency pairs moving from between 100 to 250pips, in alignment with our analysis for a stronger USD. This strength in the USD was derived from Chair Powell’s hawkish tone on the US economy and the continual sell off in the equity markets. Today we saw a short term bounce in the USD, most likely due to technical levels, profit taking and reduction of exposure over the weekend. I’ll still be looking for trades which signal USD strength.
Short
by JinDao_Tai
2
USD gains strength on Powell’s comments.In part 1 of his testimonial, Chair Powell reinforced an optimistic outlook for the US economy, highlighting growth in the domestic economy, unemployment rate at historic lows and reiterating guidance for further gradual increase in policy interest rates. As expected, his statements portrayed a positive sentiment towards a growing US economy and thus a strengthening USD. Currently there is even talk for probability of 4 rate hikes this year, given the optimism in Chair Powell’s statements regarding the economy. Ultimately, I would trade with a bias towards a stronger USD. In part 2 of Powell’s testimonial tonight, we look for the hawkish statements to continue. A stronger USD would affect most of the major currency pairs, driving prices lower along with the existing trend.
Short
by JinDao_Tai
CAD CPIIn the evening, we have the monthly CAD CPI data to be released. There is a forecast for data to be released at 0.4%, from the previous of -0.4%. The USDCAD has been climbing up, currently trying to break above 1.2720. If CPI data is released to be 0.4% or better, we could see a strengthening of the USDCAD (but this would be a counter trend trade) I’ll be looking if CPI data disappoints, resulting in a weaker CAD, giving the USDCAD a boost above 1.2700 towards 1.2900.
Long
by JinDao_Tai
setups which highlights continual USD strengthDXY struggling to bounce strongly off 90. Might see some weakening of the USD, but traders should be careful and consider possibility of this as a technical and reactionary move. This retracement of the DXY coincides with the S&P 500 bouncing off the 2,700 level. I’ll be looking for trade setups which highlights continual USD strength. For example, the GBPUSD especially if it is unable to break above the 1.3950 resistance.
Short
by JinDao_Tai
FOMC Meeting Minutes coming up tonightSeeing USD slowly moving into positions of strength, across most of the major currency pairs. This could be a result of the continual sell off in the S&P500. However, it’ll also be important to note the FOMC meeting minutes to be released tomorrow morning (3am). Typically, meeting minutes releases are non events (compared to press conferences). However, with a new chairperson and the fact that any indication regarding inflation and that it could drive more interest rates hikes, could send the already shaky equity market spiraling. This would flow towards a stronger USD, which could give USDJPY legs towards 109 or the AUDUSD the push towards 0.78 and below.
Short
by JinDao_Tai
AUDUSD to break 0.7900?Happy Chinese New Year & US President’s Day Back from a short CNY break, you will notice the narrow range which the market is trading in for today, primarily due to the Chinese and US market being closed today. Since my last analysis, we saw the USD strengthen against the major currency pairs, as the S&P 500 shows signs of reversing its recent gains. Due to a lack of major economic drivers, I’ll not be anticipating any major moves today. Looking for short term trend following trades, with an eye on upcoming events over the next couple of days. If we see the AUDUSD break through 0.7900 because of tomorrow’s Monetary Policy Meeting Minutes, we could see a retest of the 0.7800 support level.
Short
by JinDao_Tai