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Bitcoin Bounces But Still Too Early to Call
BTC: Price: $8,750 | MCAP: $155.58 Billion | 24-Hr Volume: $23.30 Billion
Short-term trend: Bearish
Bitcoin has bounced up from the 50-day average at $8,550, but it is too early to call a bullish reversal, as the resistance at the trendline falling from June 2019 highs is still intact. The price is also hovering below the 200-day average – a barometer of long-term market trends.
The path of least resistance, therefore, remains on the downside – more so, with key daily chart indicators reporting strongest bearish bias since early October. BTC could drop below the 50-day average and slide toward $8,000 in the short-run.
The outlook would turn bullish if prices rise find acceptance above the 3.5-month bearish trend line resistance, currently at $9,335.
The Federal Reserve is again expanding its balance sheet to keep money markets stable. The move is widely being called as QE 4. Notably, the pace of expansion observed over the last one month is the fastest since 2008.
Note that the previous QE rounds inflated prices of risk assets.
The crypto market community likes to compare BTC with gold, however, the top cryptocurrency is still a risk asset, Travis Kling, Founder and CIO of Ikigai Asset Management and Raoul Pal, CEO and Co Founder of Real Vision Group said during a panel discussion at CoinDesk’s Invest 2019 event.
BTC, therefore, could find love if the Fed continued balance sheet expansion, pushing stocks and other risk assets higher.
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Komodo Facing Stiff Resistance
KMD: Price: $0.90 | MCAP: $104.3 million | 24-Hr Volume: $6.2 million
Short-term trend: Bull exhaustion
KMD is today's best performing crypto within the top 100 at CoinMarketCap, up 13.1 percent over a 24-hour period. Price action has extended beyond Nov. 4 and 5's breakout rally above the 50 and 100-day moving averages (MA) but has fallen short of breaching the 200-day MA at $0.99, a barometer for long-term market health.
Expect a pullback to $0.83 as KMD heads towards the daily close on low levels of total trading volume. That view is supported by a declining awesome oscillator (AO) and an overbought RSI on the daily chart.
Long-term trend: Neutral
A failure to capitalize on a close above the 200-day MA would place KMD in a vulnerable position as the trend flips back to bearish amid exhaustive conditions for the world's 52nd largest crypto by market cap.
KMD's long-term market structure is beginning to show promise, but more activity and investor interest is needed to extend the aforementioned rally and break from the indecision.
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| Stellar Struggling to Regain Ground
XLM: Price: $0.077 | MCAP: $1.54 billion | 24-Hr Volume: $363.4 million
Short-term trend: Bearish
A double top has formed on the daily chart presenting a bearish technical setup that could see XLM's drawdown deepen toward the 50-day moving average (MA) at $0.064
Selling volume has also increased significantly as today's candle heads towards a bearish daily close confirming the downtrend as seller momentum begins to pick up speed. That view is supported by a declining awesome oscillator (AO).
Long-term trend: Bearish
The support/resistance flip demonstrates a lack of bullish sentiment for the long-term moving forward, until a firm close above $0.09 occurs.
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The rise of populism in the U.S. and across the globe is due to the unconventional monetary policies like quantitative easing (QE) implemented by the Federal Reserve and other major central banks, former long/short equity manager and now the head of Ikigai Crypto Asset Management Firm Travis Kling said at CoinDesk’s Invest Tuesday.
Populism is a political approach that strives to appeal to ordinary people who feel that their concerns are disregarded by established elite groups.
Quantitative easing is an unconventional monetary policy in which a central bank purchases government bonds or other securities to boost the money supply and encourage lending and investment.
A few experts, especially Keynesian economists, believe the former Fed President Bernanke saved the world with the QE program. Indeed, interbank lending had frozen after the collapse of Lehman Brothers in 2008, bringing international trade to a stand still and the first round of QE helped restore liquidity in the financial system.
The Fed, however, did not stop there and did two more rounds of QE, which, according to many experts, had little direct effect on large parts of the economy and fueled asset bubbles and pushed interest rates lower, widening the gap between the rich and the poor.
The concentration of wealth in the hands of few likely fueled the rise of populism, Brexit and even Trump’s rise, according to Baroness Ros Altmann, economist and pensions minister in David Cameron’s government.
More importantly, the problem could only worsen going forward with the likes of Bank of Japan, Swiss National Bank, and the European Central Bank running the negative interest rate policy.
The Fed’s interest rate is still hovering well above zero, but the central bank is again expanding its balance sheet to keep money markets steady. |
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| Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments. |
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