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Hi everyone,
When the cryptocurrency market was still in progress, the next big thing for Wall Street was destined to be the future of Ethereum. Now it seems that they are on the menu again.
The futures contracts were originally invented so that farmers and traders could cover the costs before engaging in a specific business.
For example, imagine you want to drill oil and you know more or less your production costs but you do not want to run the risk that the price will drop before the barrels are ready for sale. You simply have to buy an oil futures contract before embarking on the adventure to lock your profits upfront.
As the world goes further towards the tokenisation of financial assets, the service of blocking future prices for Bitcoin and Ethereum could become essential for entrepreneurs. Therefore, the CFTC in the United States now asks the community to help understand the needs of the sector so that they can meet them.
For those of you who are familiar with the details, do not hesitate to send your comments to them using this link: https://www.cftc.gov/
@MatiGreenspan
eToro, senior market analyst
Today's highlights
- Stock Rally in suspicion
- Dragons Day
- Have we finally found the fund?
Note: all data, figures and graphs are valid from December 13th. All trading involves risks. Only risk capital that you can afford to lose.
Traditional markets
Yesterday's global equity rally seems to be stalled today. The indices are in the green today but the excitement could fade. With all the recent comments from economists on how the cycle could soon come to an end or that we could be heading for another crisis, it is difficult for traders to fully acquire a momentum towards the top right now.
Crude oil is also testing the lows at the moment, and if it manages to break below $ 50 a barrel it could be potentially destabilizing.
Event of the European Central Bank
By the time you understand, the European Central Bank will probably have already concluded its press conference.
At the moment, expectations are that they will continue to slow down the quantitative easing program or eventually end up together. Even if interest rates should not increase for another year or more, it seems clear that the ECB is following in the footsteps of the US Federal Reserve in strengthening monetary policy.
Money has begun to flow freely in global markets over the past decade and it will be very interesting to see what happens when that money starts to be strengthened once again.
Crypto Floor Possible?
With all the advances in the cryptography industry lately, it is extremely difficult to understand why prices have fallen in the last month.
Here we can see the huge bitcoin glide that has been happening since November 14th. From its all-time high to the new low last Friday, the bitcoin dropped by a total of 84%, which is more or less in line with the level of retracements that the asset has seen in previous cycles.
As we discussed earlier when the bitcoin broke below the psychological level of $ 5,000, the current support area is between $ 3,000 and $ 3,500. So we're very much at this area right now.
A downward violation could certainly cause further sales and a lower minimum. However, a strong push upward from these levels could actually serve to shift the sentiment and change the trend.
With the high number of short sellers in various stock exchanges right now, even a small push could potentially have a small compression on the market. Imagine such a compression at the level that would take us firmly above $ 5000. Such a move would most likely be interpreted in retrospect like the capitulation that everyone was waiting for.
I suppose we'll need to wait and see how it works.
Good day!
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.
eToro is a multi-asset platform that offers both investment in stocks and cryptocurrencies, as well as CFD asset trading.
Please note that CFDs are complex instruments and present a high risk of losing money quickly due to leverage. 65% of retail investor accounts lose money when they exchange CFDs with this supplier. You should consider if you understand how CFDs work and if you can afford to take the high risk of losing your money.
Cryptocurrencies can fluctuate widely in prices and are not appropriate for all investors. Cryptocurrency trading is not controlled by any regulatory framework of the EU.
Best regards,
Mati Greenspan
Senior market analyst
Connect with me on ….
eToro: @MatiGreenspan | chirping: @MatiGreenspan | LinkedIn: MatiGreenspan |Facebook:MatiGreenspa
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