Crypto Market Recovers from Fall, But Could Bitcoin Price Fall to $5,000?

After recording one of the worst sell-offs in all of 2018, the crypto market has experienced a minor corrective rally, adding $8 billion to its valuation.

The Bitcoin (BTC) price is approaching a resistance level at $5,600, a minor resistance level BTC will have to surpass to potentially eye a rally to $5,800 and potentially re-enter the $6,000 region.

Since August, BTC had defended the $6,000 support level, which has since turned into a major resistance level. Hence, if BTC initiates a corrective rally throughout the next three to four days to the $6,000 level, then it will be possible for the dominant cryptocurrency to end 2018 with a positive note.

However, if BTC struggles to breakout of the $6,000 level, then it will be difficult for the market to escape its low price range by the end of 2018.

Bitcoin Downtrend Still Possible

A further downward movement by Bitcoin is still possible from the mid-$5,000 zone. Cryptocurrency trader and technical analyst DonAlt said that BTC had a decent daily movement on November 16, but it will need to show some momentum in the high $5,000 region to confirm a positive short-term movement.

“It’s been a good day for BTC. That doesn’t change the fact that we’re approaching resistance. On the charts are the three setups that I’d be willing to trade. S/R flip or rejection on red, long green or just a straight up nuke from here.”

Crypto Rand, a respected digital asset analyst, stated that a fall to the $4,800 to $5,000 range is possible, given that technical indicators have not shown any signs of a bottom.

View image on Twitter

Crypto Rand@crypto_rand

I don’t see any bottom signal yet.

My target is in the $4,800-$5,000 range.

Prior to the sudden 11 percent drop of BTC, Willy Woo, a Bitcoin analyst and the founder of Woobull.com, said that BTC demonstrated a typical sell signal. Woo analyzed both technical and fundamental indicators of BTC including the Bitcoin network’s transaction volume, to predict a downtrend.

“This last reading of our blockchain and macro market indicators is still in play. What has changed is that NVTS has now broken its support, typically a sell signal,” said Woo, adding that all of his indicators show a bearish trend. “All our blockchain indicators remain bearish. NVT, NVTS, MVRV, BNM, NVM. They are experimental but have served to make very correct calls to date, even when traditional on-exchange indicators were reading to the contrary.”

The volume of BTC remains at $6 billion, still at a high level due to the spike in daily volume on November 14. On Wednesday, the volume of BTC temporarily spiked to $8 billion, doubling its volume within a three-day span.

Independent Price Movements

Over the last 24 hours, Ripple (XRP) and Stellar (XLM) recorded an increase in price in the range of 2 to 4 percent. Primarily because of the downtrend of BTC, major cryptocurrencies and small tokens have started to demonstrate independent price movements.

A lack of dependence on BTC can be considered as a positive change in the market, which relied on the short-term price trend of Bitcoin for at least the past four months.

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Trump, Xi upbeat on trade after phone call; US targets more Chinese firms

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WASHINGTON/BEIJING – US President Donald Trump and Chinese President Xi Jinping, who spoke by telephone on Thursday, expressed optimism about resolving their trade dispute ahead of a high-stakes meeting at the end of November in Argentina.

But within hours of upbeat assessment, the US Justice Department took aim at another Chinese firm it accused of unfair practices, part of an across-the-board pressure campaign by the Trump administration targeting China.

Still, investors cheered the resumption of dialogue and a report that Trump was taking steps to resolve the tariff war, with shares in Asia hitting three-week highs on Friday and the dollar softening.

Trump said on Twitter that trade discussions with China were “moving along nicely,” and that he planned to meet Xi on the sidelines of a G20 summit, in Argentina, after the two had a “very good” phone discussion.

Bloomberg, citing people familiar with the matter, later reported that Trump wants to reach a trade agreement with China at the G20 meeting and that after the call with Xi, he had asked officials to begin drafting possible terms.

The news agency said it was not clear if Trump was easing up on demands that China has resisted, and it cited one person as saying intellectual property theft was a sticking point on a possible deal.

In comments in state media, Xi said he hoped China and the United States would be able to promote a steady and healthy relationship, and that he was willing to meet Trump in Argentina.

“The two countries’ trade teams should strengthen contact and conduct consultations on issues of concern to both sides, and promote a plan that both can accept to reach a consensus on the China-US trade issue,” Xi said on CCTV state television.

Xi was quoted as saying after the call with Trump that they had hoped to expand trade cooperation.

Neither leader specified any details of possible progress in their first known direct discussion in several months.

Trump administration officials have said that trade talks with China cannot resume until it comes up with specific actions it is willing take to meet US demands for sweeping changes to policies on technology transfers, industrial subsidies and market access.

The two countries have imposed tariffs on hundreds of billions of dollars of each other’s goods and Trump has threatened to put tariffs on the remainder of China’s $500 billion-plus exports to the United States if the disputes cannot be resolved.

Jacob Parker, vice president of China operations at the US-China Business Council in Beijing, said there were plenty of challenges that would require significant negotiations in advance of a meeting between Trump and Xi to ensure success.

“What negotiations have lacked to date has been that (presidential) level of engagement. If President Trump makes an agreement with President Xi, there is nobody above them to overturn it,” he said.

“We’re optimistic this is a potential off-ramp of increasingly antagonistic trade tensions and hope it leads to a pause and new negotiations,” he said.

Tu Xinquan, a trade expert at Beijing’s University of International Business and Economics, said he was skeptical that the Trump administration was truly ready to deal, and that other factors, such as the mid-term congressional elections, could be driving statements from the administration.

“The best situation (from a Trump-Xi meeting) would be no further actions, temporarily. But the tariffs already imposed will not go away,” Tu said.

Intellectual property theft

Just after the upbeat readouts of the Trump-Xi call, the Justice Department announced the latest in a list of actions against what the Trump administration calls China’s cheating through intellectual property theft, unfair corporate subsidies and rules hampering US corporations in China.

A Justice Department indictment targeted two companies based in China and Taiwan and three individuals, saying they conspired to steal trade secrets from US semiconductor company Micron Technology Inc.

This week, prosecutors announced an indictment against 10 defendants, including two Chinese intelligence officers and other computer hackers and co-conspirators, who are all accused of breaking into American company computers to steal data on a turbo fan engine used in commercial jetliners.

On Wednesday, US Secretary of State Mike Pompeo said China was probably Washington’s biggest long-term security challenge and the United States was engaged in a “multi-pronged effort … to convince China to behave like a normal nation on commerce” and respect international law.

But Trump struck a more affable tone on Twitter after the phone call with Xi.

“Just had a long and very good conversation with President Xi Jinping of China. We talked about many subjects, with a heavy emphasis on Trade,” Trump tweeted. “Those discussions are moving along nicely with meetings being scheduled at the G-20 in Argentina. Also had good discussion on North Korea!”

Earlier this week, Trump said he thought there would be “a great deal” with China on trade, but warned that he had billions of dollars worth of new tariffs ready to go if a deal did not materialize.

The United States has imposed tariffs on $250 billion worth of Chinese goods, with duties on $200 billion of the total set to increase to 25 percent from 10 percent on Jan. 1, 2019.

China has responded with retaliatory duties on $110 billion worth of US goods.

Credit to: Reuters

 

 

USD drops further on trade breakthrough hopes

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The major financial headline on Friday is reports that Trump has asked the cabinet to draft a possible trade deal with China – something that if occurred, would be welcome news for financial markets across the globe. This would also be seen as a major threat to the USD rally, meaning that this is the potential card to help encourage a jump in other currencies around the world, especially those in emerging markets. At time of writing, Trump is scheduled to meet Chinese authorities in a few weeks, with the potential outlook of a breakthrough in prolonged trade tensions representing an invesment opportunity for financial markets to further unwind of USD positions.

This comes shortly after the news yesterday that President Trump was quoted as saying that he and President Xi had a “long and very good” conversation while indicating in a Tweet that US and China discussions on trade were progressing. A potential breakthrough would obviously be welcome news for investors and financial markets globally, because the threat of a trade war conflict has been viewed generally as probably the largest risk to the world economy since the global financial crisis a decade ago.

This air of optimism is providing some inspiration for investors to put risk back into their portfolios, which is why global stocks and emerging market assets are benefiting from such headlines. It is viewed as a negative for the Dollar, considering that one of the reasons for prolonged Dollar strength over the past six months or so was because of the Dollar appeal in light of trade tensions, so further indications of progress in US-China trade talks would be seen as encouragement for traders to drive the Dollar lower from its new 2018 high just a few days ago.

Of course everyone would hope that we can continue to progress from trade tensions, but there is an air of caution that should still be used. These political risk headlines are completely unpredictable and nobody really knows what is going on behind closed doors with the trade negotiations, but it can be considered as a good sign that there are hopes of some sort of deal being agreed in the run up to the scheduled meeting between President Trump and Chinese President Xi Jinping at the G-20 nations summit in Argentina later this month.

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