Mati Greenspan, Senior Market Analyst at FX broker eToro, has provided his daily commentary on traditional and crypto markets for January 7, 2019.
- Bitcoin Spikes to Over $4,000: BTC surged roughly 6.5% to over $4,000 in less than 30 minutes. BTC is trading in an overall range of $3,000 to $5,000 over the past few weeks, so $4,000 doesn’t represent a significant psychological level.
- Financial Markets Resume Full-Capacity Trading: After several weeks of low-volume holiday trading, most investors are back at their desks today. Meanwhile, better-than-expected jobs data on Friday may be a sign that the economy may be overheating.
- Crypto Enthusiasts Build, Invest: A Twitter poll of the crypto community found that passive investing was the most common relation to the asset class, but many respondents also actively invest or work in crypto.
- Oil, Gold Rise on Weaker Dollar: Gold and oil are moving upward as expectations of a less-aggressive Fed is putting downward pressure on the US Dollar.
By the afternoon, financial markets should be back to full strength. For the first time this year, investors are back at their desks and ready to trade.
Today we head into the 17th day of the US government’s partial shutdown and despite Vice President Pence working through the weekend with house democrats, we still don’t seem to have a solution in sight.
The trade talks between the US and China will also resume today. The current truce is set to last at least until March 1st, which doesn’t leave a lot of time to strike a deal.
One more thing worth mentioning today is the fantastic jobs report that came out on Friday. Analysts were forecasting a mediocre 179,000 jobs added to the US economy in December. Instead, the number came out at an astonishing 312,000.
The average hourly wages also rose a bit more than expected, which may end up confirming what some economists are saying about the economy getting a bit too hot.
Both oil and gold are making some strong moves up while the US dollar falls below support. Here we can see the black sticky stuff testing that very round level of $50 a barrel for the first time since it broke below three weeks ago.
As expected, gold did see a pullback before reaching $1,300 an ounce. The pullback coincided with the excitement surrounding Friday’s job numbers. However, the markets still have many worries that were not allayed by that report.
With the idea that the Fed may now be getting less aggressive on interest rate hikes, the US Dollar is also coming under pressure. Here we can see the buck gaining throughout most of 2018, but not seeing a pullback.
Yesterday afternoon the crypto markets were delightfully surprised by a sudden surge in bitcoin of roughly 6.5% in less than 30 minutes. Now, it’s not uncommon for this type of sudden spike to occur in the crypto markets but what was interesting is that the spike took us above $4,000 per coin.
Even though $4,000 is a nice round number it doesn’t necessarily represent any sort of significant psychological level. If we zoom out, and as we’ve been discussing for a few weeks now, we can see that the overall range that we’re in is from $3,000 to $5,000 per coin.
So we’re now at the halfway mark in the middle of the broader range.
It should also be noted that one of the major crypto exchanges bitfinex will be down for maintenance over the next few hours, which could affect liquidity in the market and possibly make things even more volatile.
Wishing you an amazing week ahead!
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