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As with many other things in the encrypted world, the methods we use to determine the value of cryptographic resources are still under construction.
We made an introductory video about this last month, give a look here. One of the thought leaders when it comes to building these fundamentals is a venture capitalist named Christopher Burniske.
Over the weekend, Chris published a blog titled "Bitcoin & Ethereum: prices fall more than fundamentals".
As the title suggests, the post examines some of the network factors including the supply side (hashrate) and the demand side (daily transactions, functionality, active portfolios) for two of the most popular cryptos.
Overall, these factors tend to align well enough with the price, but Chris points out a divergence that might suggest that the market is now oversold.
Here is a chart that has jumped out to me. It shows that the use of the Ethereum network has remained incredibly constant since the beginning of 2018, but the price has only diminished at that time.
This research is a strong statement of our previous assessment that the volatility we have seen in the last month is primarily a technical sell-off and is not a fundamental reason for doing so.
@MatiGreenspan
eToro, senior market analyst
Today's highlights
Gaps despite the good news
OPEC hits a deal
Dash Fast Food
Note: all data, figures and graphs are valid until December 10th. All trading involves risks. Only risk capital that you can afford to lose.
Traditional markets
Jobs numbers did not get so hot on Friday and the markets ended up falling to their lows. The sentiment was so negative for the end of the week that when the futures opened up last night, they opened up with a big gap.
However, this morning's stocks say stocks are falling may not be entirely imminent. The low they refer to is simply because of the gap in the bottom of the open. From the opening, they were quite mixed with some regions at the top, some at the bottom and some flat.
So far, this morning, the news cycle is rather gloomy, but in reality it does not seem to matter. However, markets are far from reacting to fundamentals. The numbers of jobs weaker than expected on Friday should probably have been considered by the markets as a positive sign. Yet here we are.
The weakest position taken by the Fed together with the recent agreement between Xi and Trump should support the markets at the moment, but I put my case back.
Attention has now moved back to central bank policy. This Thursday we will take decisions on interest rates from the European Central Bank and the Swiss National Bank. We'll hear from the United States Federal Reserve next week.
OPEC hits a deal
It seems that OPEC was able to reach an agreement on Friday to cut global production.
The market reaction shortly after the announcement of the transaction (purple circle) was a rapid recovery in crude oil prices, but half of the move was met by the time the markets closed and so far prices this week are noticeably stable.
Also, keep an eye on gold today. The shiny yellow metal is gaining on the back of a weaker Greenback.
Dash to Fast Food Adoption
Just as we have noted above, there is a great diversion between what is happening in the news and what is happening in the prices. An excellent example of this is the currency of Dash, which has had some excellent updates lately, but has fallen about twice as much as any other crypt in the last 24 hours.
Recently, Dash has made excellent progress on the field, especially where the crypt is most needed. This latest title shows that they are destined to enormously increase their overall money market share in Venezuela.
KFC is not the first big fast food chain to do without Dash. Both Papa Giovanni and Subway are already successfully using Dash for fast fast food payments.
In general, Dash added merchants to the right and left. The directory site that tracks has already counted more than 4,400 locations, especially in Venezuela.
In addition, the Dash Core Foundation recently reported that they are overcoming the storm quite well and that the coffers of the network are more than sufficient to support operations and even expand further.
Speaking directly to the bear market and the climatic squeeze we mentioned in our daily update last Wednesday (titled: Digital Natural Selection), the CEO of Dash Core Group wrote this blog post explaining that DCG's finances are in good shape.
Given this type of fundamental dissonance at stake, it can make it difficult for the average investor to choose projects that have a bright future and distinguish them from those that are in a clearer recession.
We hope in a certain clarity and return to harmony.
This content is provided for informational and educational purposes only and should not be considered as an investment advice or recommendation.
Past performance is not indicative of future results. All trading involves risks; only venture capital you are willing to lose.
The presented perspective is a personal opinion of the analyst and does not represent an official position of eToro.
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