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It’s… Stock Season?

Penny stocks going 5x, bankrupt companies pumping 700% – why is the share market acting like crypto in 2017? For the better part of two months now, bitcoin has been

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Penny stocks going 5x, bankrupt companies pumping 700% – why is the share market acting like crypto in 2017?

For the better part of two months now, bitcoin has been stalled. At the start of May, a few days before the halving, we pumped into the US$9000 range and have, barring the occasional fake out, stayed there. It’s been like watching two tennis players hitting a ball back and forth, both of them doing their absolute best to let the other player win. You get the feeling that when it does break it’s going to be an era-defining moment, but in the meantime I’ve seen episodes of Great British Railway Journeys with more verve and excitement to them.

Meanwhile, in the traditional markets, things have been, how do you say, effin’ ridonkulous. After shedding a third of their value in March, the US stock market is hovering back near all-time highs. In the case of the tech-focussed Nasdaq index, the all-time high has already been cleared. Destitute companies like Carnival Cruises and American Airlines have been posting 30% gains in a single day. At one point, literally bankrupt car hire company Hertz went from 80c to $5.50 – a gain of 700%. 

Yet by every other metric America (and the rest of the world economy) is thoroughly screwed. So why has the share market shrugged off the apocalypse with such disdainful ease?

Three-card Monte

So, there are a few things going on here. The first is temporal, the second novel, the third structural. And yes, I am quite pleased with that summary.

First up: this ain’t over by a long shot. After the first, giant sell-off of The Great Depression, the market rallied 50% before continuing on its merry way into the basement. There are a couple of reasons why this time might be different – the present rally has been stronger and it could be easier for the economy to recover from the coronavirus than initially feared – but the point remains that these are early days and talk of a permanent recovery are premature.

Second is what’s being called the Robinhood effect – basically, a whole bunch of bored, newly unemployed young people at home getting into day trading thanks to stock trading app, Robinhood. And all power to them: they’ve made traditional money managers look like absolute patsies over the last few months. But if history is anything to go by – I’m looking at you Dot Com Bubble – when retail investors start thinking they can print money by randomly picking a three letter code and throwing money at it, it’s a pretty good sign you’re ready for a correction.

Show me the money

And finally, well, how good are these results? I mean, really. Because when you look at them real close, they lose a bit of their sheen. 

Basically, it all depends on what you’re measuring the price against. Sure, you can measure it against the greenback, but so far this year the amount of US currency in circulation has gone up by around 20% thanks to the Federal Reserve’s policy of throwing money at a problem until it disappears. While inflation isn’t a 1:1 game, the US dollar is still worth significantly less than it was in January.

Measure it against the price of gold and the picture isn’t quite so rosy – by this metric, the S&P 500 has been in a bear market since 2018 AKA when people first started saying “I think the stock market may be a wee bit overvalued”. Measure it against bitcoin and, well, the last decade has been an absolute disaster. And while it’s pretty hard to buy your groceries with either gold or bitcoin right now, it’s a reminder that value is always relative and that inflation matters – to all of us.

Now come on, bitcoin. Make a goddamn decision already.

We are not affiliated, associated, endorsed by, or in any way officially connected with any business or person mentioned in articles published by CoinJar. All writers’ opinions are their own and do not constitute financial or legal advice in any way whatsoever. Nothing published by CoinJar constitutes an investment or legal recommendation, nor should any data or content published by CoinJar be relied upon for any investment activities. CoinJar strongly recommends that you perform your own independent research and/or seek professional advice before making any financial decisions.

Source: https://blog.coinjar.com/2020/06/25/its-stock-season/

Blockchain

European Central Bank’s president calls for greater regulation of bitcoin.

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According to the Reuters report, the European Central Bank president Christine Lagarde has called for greater regulation of bitcoin and other cryptocurrencies. She linked the use of cryptocurrencies with global criminality and money laundering. ECB chief Lagarde said the digital currency was increasingly being used by criminals worldwide to cover their tracks online and launder money beneath the authorities’ detection. She said criminals are relying on BTC and patchy regulation to move illegitimate money without oversight or supervision.

ECB President calls for more urgency around the global regulation of crypto.

ECB president called for more urgency around the crypto sector’s global regulation and more effort to develop common standards to prevent criminals from abusing digital currencies as a backdoor to money laundering and other nefarious activities. Highlighting the “funny business” going on in BTC markets, Lagarde described cryptocurrency criminality as “totally reprehensible.” “BTC is a highly speculative asset, which has conducted some funny business and some interesting and reprehensible money laundering activity,” she added. Currently, crypto regulations remain in a grey area in most countries, but regulators are catching up gradually. 

Crypto regulations begin to tighten up after bitcoin’s massive rally. 

The most notable example of crypto regulation has been in anti-money laundering, with exchanges and other crypto services now adhering to standardized AML requirements. The news coincides with a rally in BTC prices in recent months, spurred on by an increasing mainstream interest in BTC tokens. This has led to further calls for regulation worldwide, amid fears that more speculators could end up losing all of their money. Combined with soaring rates of fraud and concerns over money laundering and other criminality running through BTC, Lagarde said the time for light-touch regulation of the digital asset was over.

Source: https://coinnounce.com/european-central-banks-president-calls-for-greater-regulation-of-bitcoin/

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Blockchain

Why this on-chain analyst thinks Bitcoin whales aren’t institutions

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While most had high expectations from the crypto-market for the year 2021, it’s safe to say that the market has well and truly exceeded these expectations. Not only did the world’s largest cryptocurrency, Bitcoin, breach the $40,000-mark, but the industry’s cumulative market cap also went past $1 trillion.

Source: CoinMarketCap

The market and its largest cryptocurrency’s movements make for interesting reading, especially when its charts are observed. In fact, price charts noted an almost vertical movement by Bitcoin, suggesting that this bull run has far outpaced the bull run of 2017.

In such a case, the common perception is that the reason Bitcoin has seen such immense buying power is because a majority of this buying has come from institutions. The same sentiment was highlighted recently by Anchorage Co-founder Diego Monica who, while noting that institutions have more tolerance for volatility and are professional investors, said,

“This rally is absolutely followed and made by the institutions.”

As a result of this, investing in Bitcoin becomes less about following a fad and more about making an allocation to an uncorrelated asset class for purposes relating to capital preservation and appreciation. In fact, many have suggested that at current price levels, Bitcoin might even be too expensive for non-institutional investors to enter the market.

However, on-chain analyst Willy Woo isn’t so sure that this bull run is solely institutionally-driven. On a recent episode of the Unchained podcast, he said,

“We thought it would be, and right now the thing is, I don’t actually think that it is.”

According to Woo, Bitcoin’s bull run is being driven by the institutional narrative of institutions getting behind the idea of Bitcoin and crypto. While institutions have been suggesting that they are going to deploy funds, the majority of them are still yet to do so, he added.

In fact, it may be this validation from institutions that brought in many high net worth investors to this space, with family offices buying in at higher price levels.

Woo explained that a combination of things has contributed to his certainty about family offices making capital allocations towards crypto, including first-hand conversations with people in the space disclosing their intent to do so.

That being said, the main part of such certainty comes from his observation of capital flows on-chain. He explained that the value of withdrawals on exchanges is increasing, which at first glance, seemed to signify that institutions are present. However, a closer examination of clusters of wallet addresses pointed to the fact that a single entity controls multiple addresses.

“It’s not corporation scale where you’re talking tens of thousands of Bitcoin that are being held,” he claimed, adding, “The number of whales holding thousand Bitcoins or more is skyrocketing, and so are the smaller allocations of around 100 and 250.”

Source: https://ambcrypto.com/why-this-on-chain-analyst-thinks-bitcoin-whales-arent-institutions

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Blockchain

ETH Price Analysis [WoW]: Ethereum Price Trading at key Pivot, Oscillators Indicate Strong Momentum Despite Overbought Conditions

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  • ETH price breaking key weekly resistances and confirming them as support.
  • Breach of ETH price discovery is to be backed with increasing volume.
  • Oscillators suggesting strong momentum still present despite overbought conditions.

ETH price is currently trading at a true pivot where a bullish weekly candle close will greatly increase the probability of breaking into price discovery. Price action has been making consecutive higher highs and higher lows since it’s March 2020 Bearish Expansion. The projection remains bullish until proven as this is a strong weekly uptrend.

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ETH Price Analysis: Weekly Chart 

ETH price Analysis weekly
ETH price Analysis weekly

Preluding to the chart above, a strong uptrend is evident with continuous acceleration leading to a potential parabola. The 21 MA has provided a reliable Dynamic Support that has led to a strong Bullish Volatility Expansion from the lows. 

Key Weekly S/R levels have been breached with conviction; price action has confirmed S/R Flip retests along the way with further Bullish Volatility Expansions. ETH price trading in such a volatile range is deemed to have strong swings thus evidently, the volume profile has been increasing. 

Volume influxes are a key indication of a strong uptrend as bullish volume follow through is what drives price action. As evident on the chart, there has been a Volume Climax Node. Bearish volume is still below average as the current weekly candle trades open. For further follow through, an influx in volume is required to break the All-Time High with persuasion. 

The current shape of the weekly candle is of a Bullish Hammer; however, this is not confirmed until an official close. There has been a strong buy-back from the S/R Flip Retest which is indicative of strength. The next weekly candle open will be deemed telling of the overall direction of the trend. 

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Now holistically assessing the oscillators, momentum is still intact with the bulls, epically how the stochastics have been behaving.  

ETH Price Analysis: Weekly Stochastic oscillator

ETH price Analysis weekly: Stochastic oscillator
ETH price Analysis weekly: Stochastic oscillator

As evident, each and every bull cross has led to a substantial Bullish Volatility Expansion in price action. The stochastic helps to monitor momentum in the prevailing trend. It can remain trading in overbought regions for an extended period of time, epically in a strong up trend. Ethereum has an immediate Bull Cross coming to fruition, this will be confirmed on the next weekly candle close. Holding true will store momentum for the break of the All-Time-High. 

ETH Price Analysis: Weekly Relative Strength Index [RSI]

ETH price Analysis weekly: RSI
ETH price Analysis weekly: RSI

Furthermore, observing another key oscillator is the RSI that is responsible for measuring the speed and velocity of price action. Preluding to the image above, Ethereum’s RSI is considered to be in overbought regions however back testing swing high. This is considered to be very bullish if respected, breaking down will mean a reversion in price action. As long as the RSI and Stochastics maintain their respective bullish control zones, ETH price will remain very bullish as it comes close to price discovery, 

What to Expect for Weekly ETH Price ?

In conclusion, Ethereum price remains quite strong as it is approaching its All-Time High. Price action has been maintaining consecutive higher highs and higher lows. This next weekly candle close will be highly indicative of the overall direction. Both key oscillators are suggesting that the momentum is stored with the bulls. A true break is likely to be backed with increasing volume as price action enters price discovery. 

Hope this article helps in the preparation for the next volatility expansion in Ethereum. Follow us at tradingview for more in detail crypto price analysis. 

To keep track of DeFi updates in real time, check out our DeFi news feed Here.

FBC13

Source: https://coingape.com/eth-price-analysis-weekly-price-oscillators-suggest-strong-moomentum-overbought/

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