The global financial market is always rolling along, with trillions of dollars being traded every day across hundreds of different markets. These massive markets mean traders and investors are constantly barraged with information from every angle, making it almost impossible to keep up for the average person. With the weekly edition of “Saturday Sit-down,” our goal is to filter out some of the noisier information and offer our readers a thoughtful and nuanced look at the global financial world.
Looking at the digital asset market, it’s clear to us there is room for optimism. Bitcoin continues to show resilience after the price breakdown on June 27th. It’s clear from volume and charts that there was no follow-up in selling pressure on Bitcoin (BTC) below $8,825. Considering that many analysts attributed this breakdown to a record-setting expiration in the Bitcoin options market, it’s incredibly encouraging to see stable prices & relatively low volatility after such a monumental event.
Looking at second-largest cryptocurrency – Ethereum – it’s clear an equal amount of optimism is to be had. Some would (and have) argued there are even more reasons to be optimistic about Ethereum than Bitcoin. Recent articles like Decrypt’s “Bitcoin is buckling under Ethereum’s gravitational pull” and Forbes’ “Ethereum is going to the moon” bring this case into the spotlight, highlighting just how much activity is going on around Ethereum.
The central theme is an explosion in the decentralised finance markets or DeFI. DeFi offers users a place to use their bitcoin as collateral and engage in a permissionless financial system, such as borrowing and lending. Projects leading the way include Compound, which has increased its BTC collateral holdings to ~$570 million, an almost 600% increase in only a month. With new projects, offerings, and services popping up every day in the Ethereum world, on-chain activity has exploded. Resulting in Ethereum fees reaching 2-year highs.
Considering all the aforementioned bullish activity & sentiment surrounding Ethereum, one might be surprised when taking a look at the Ethereum chart and not seeing large bullish candles. Ethereum price action has been markedly similar to Bitcoin’s, with low volatility and slightly-downward consolidation. Comparing it more closely to Bitcoin, Ethereum, in fact, is losing value, as it attempts to reclaim the 0.025 BTC level.
In the end, though, it’s essential to remember markets don’t always respond when or how investors might think they would. With that being said, it seems clear Ethereum is firmly entrenched (and expanding) into the cryptocurrency sector. If your investment thesis involves cryptocurrency fundamentals, Ethereum is looking more promising by the day.
Rolling right into Forex Markets, we see USD/JPY making the week’s most significant gains with a 1.381% change, settling in at 107.458 JPY from an upside target of 108.15. These actions are not atypical, and trends towards global financial changes and shifting trends in Forex Markets Globally.
Next up is GBP/USD, breaking 1.2300 upwards, and then later, the pair may consolidate to around 1.2370. If these ranges break downside, the market may continue a downwards break to 1.2300 and continue falling to the next levels of support.
Then we have EUR/USD at a structure of 1.1260, then possibly falling towards 1.1215, and we might see a new consolidation range in that area. If global uneasiness around the EU and Brexit continue, and investors continue to move to “safer assets” like the USD, we could see the market continue to trend down to 1.117 or even 1.1144.
Overall the Forex markets, and other commodities, continue to see their value drop against the greenback, as it is known as one of the “safest” assets in existence. Not withholding, this doesn’t mean the USD is infinitely resilient. Case in point, the Federal Reserve is adding new money supply to global markets continuously, with continuing low-interest rates, we could see a macro correction against the greenback in the future, but for now “cash is king,” and the USD is the crown jewel of the world’s financial markets. To be continued…
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