Ethereum Could Overtake Bitcoin, Messari Analyst Says
Bloomberg
(Bloomberg) – It’s the invisible force rocking Wall Street: An inflation revival for the post-lockdown era that could change everything in the world of cross-asset investing.As America’s dalliance with run-it-hot economics sends market-derived price expectations to the highest in more than a decade, Bloomberg solicited the views of top money managers on their make-or-break hedging strategies ahead.One takeaway: The economics of trading from stocks and real estate to interest rates would be turned upside down if projections of runaway prices are to be believed.Yet there are clear divisions. Goldman Sachs Group Inc. says commodities have proven their mettle over a century while JPMorgan Asset Management is skeptical – preferring to hide in alternative assets like infrastructure.Pimco, meanwhile, warns the market’s inflation obsession is misplaced with central banks potentially still set to undershoot targets over the next 18 months.The comments below have been edited for clarity.Alberto Gallo, partner and portfolio manager at AlgebrisLikes hedges including convertible bonds and commoditiesWe don’t know at this point if the inflation pick-up will be sustained, but it’s a good start. What we do know is that markets are positioned completely the wrong way. Investors have been long QE assets like Treasuries, investment grade debt, gold and tech stocks. They’ve been long Wall Street and short Main Street for a decade.There will be rotation into real-economy assets such as small caps, financials and energy stocks instead of rates and credit, and that will generate a lot of volatility. We like convertible debt in value sectors which are linked to an acceleration in the cycle. We also like commodities.We are turning from an environment where central banks pushed the accelerator by keeping interest rates low while governments pulled the handbrake with austerity, to one where governments and central banks are now working together.Thushka Maharaj, global multi-asset strategist at JPMorgan Asset ManagementPrefers real assets over commodity and price-protected bondsCommodities tend to be volatile and do not necessarily offer good inflation protection. As for index-linked bonds, our study showed their long duration outweighs the pure inflation compensation this asset offers. It’s not the top asset on our list of inflation hedging.If inflation were to rise and continue rising – and we think that’s a low probability event – equity sectors that are geared toward the recovery provide a good investment profile. We also like real assets and the dollar.We are expecting volatility in inflation, especially at the headline level over the next few months, mostly over 2Q, driven by base effects, excess demand in the short term, and disruption in supply chains caused by a long period of lockdown. We see this as transitory and expect the central banks to look through the near-term volatility.Christian Mueller-Glissmann, managing director for portfolio strategy and asset allocation at Goldman Sachs Group Inc.Issues warning on index-linked bonds and goldWe found that during a high inflation backdrop, commodities, especially oil, are the best hedge. They have the best track record in the past 100 years to protect you from unanticipated inflation – one that’s driven by scarcity of goods and services, and even wage inflation like that in the late 60s. Equities have a mixed tracked record. We like value stocks as they are short duration.The biggest surprise is gold. People often see gold as the most obvious inflation hedge. But it all depends on the Fed’s reaction function to inflation. If the central bank doesn’t anchor back-end yields, then gold is probably not a good choice as real yields might rise. We see index-linked bonds as in the same camp as gold.A scenario of sustained inflation above 3% and rising is not our base case, but that risk has definitely increased compared with the previous cycle.Nicola Mai, sovereign credit analyst at PimcoSays inflation might undershoot central bank targets over next 18 monthsLooking through near-term volatility introduced by energy prices and other volatile price components, we see inflation remaining low in the near-term, with central bank inflation targets elusive over the next 18 months or so. The global economy has spare capacity to accommodate rising demand. If the spending were to be increased steadily over years, however, this would likely end up in higher inflationary pressures.We broadly like curve strategies and think U.S. TIPS offer reasonable insurance for an inflation overshoot. Commodities and assets linked to real estate should also benefit in an environment of rising inflation.Mark Dowding, chief investment officer at BlueBay Asset ManagementPares duration risk and warns on market complacencyReal assets such as property and commodities will hold value best in inflationary situations. Duration exposure on bonds is not attractive as yields should head higher over a number of years if inflation normalizes at a higher level than we have been used to. The most overlooked risk is that there is too much complacency because everyone’s inflation expectations are anchored based on what they have witnessed in the past five to 10 years.If there is a renewed economic slump, policy makers will be in a difficult position. Hence there is desire to make sure that you don’t miss targets on the downside. Like a golfer hitting a ball over a scary hazard, there is a temptation to go big! Ultimately this means that inflation outcomes should be higher not lower.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Ethereum, Litecoin, and Ripple’s XRP – Daily Tech Analysis – March 20th, 2021
Ethereum
Ethereum rose by 1.86% on Friday. Partially reversing a 2.63% loss from Thursday, Ethereum ended the day at $1,809.38.
A bearish start to the day saw Ethereum slide to an early morning intraday low $1,734.29.
Ethereum fell through the first major support level at $1,740 before rallying to a late intraday high $1,840.69.
The rally saw Ethereum break through the first major resistance level at $1,832 before falling back to sub-$1,810 levels.
At the time of writing, Ethereum was down by 0.41% to $1,802.01. A mixed start to the day saw Bitcoin rise to an early morning high $1,812.58 before falling to a low $1,801.29.
Ethereum left the major support and resistance levels untested early on.
For the day ahead
Ethereum would need to avoid a fall through the pivot level at $1,795 to support a run at the first major resistance level at $1,855.
Support from the broader market would be needed, however, for Ethereum to break out from Friday’s high $1,840.69.
Barring an extended crypto rally, the first major resistance level would likely cap any upside.
In the event of a breakout, Ethereum could test resistance at $1,950 before any pullback. The second major resistance level sits at $1,901.
Failure to avoid a fall through the $1,795 pivot would bring the first major support level at $1,749 into play.
Barring an extended sell-off, however, Ethereum should steer clear of sub-$1,700 levels. The second major support level sits at $1,688.
Looking at the Technical Indicators
First Major Support Level: $1,749
Pivot Level: $1,795
First Major Resistance Level: $1,855
23.6% FIB Retracement Level: $1,579
38.2% FIB Retracement Level: $1,292
62% FIB Retracement Level: $830
Litecoin
Litecoin rose by 0.09% on Friday. Following a 3.13% slide on Thursday, Litecoin ended the day at $199.91.
A choppy start to the day saw Litecoin saw Litecoin slide to an early morning intraday low $195.80 before making a move.
The reversal saw Litecoin fall through the first major support level at $196.
Story continues
Coming within range of the 23.6% FIB of $195, Litecoin rallied to a late morning intraday high $204.95.
Falling short of the first major resistance level at $206, however, Litecoin eased back to end the day at sub-$200 levels.
At the time of writing, Litecoin was down by 0.39% to $199.14. A mixed start to the day saw Litecoin rise to an early morning high $200.17 before falling to a low $198.73.
Litecoin left the major support and resistance levels untested early on.
For the day ahead
Litecoin would need to move back through the $200 pivot level to support a run at the first major resistance level at $205.
Support from the broader market would be needed, however, for Litecoin to break out from $200 levels.
Barring an extended crypto rally, the first major resistance level and Friday’s high $204.95 would likely cap any upside.
In the event of an extended rally, Litecoin could test resistance at $215 before any pullback. The second major resistance level sits at $209.
Failure to move back through the $200 pivot level would bring the first major support level at $196 and the 23.6% FIB of $195 into play.
Barring an extended sell-off, Litecoin should steer clear of sub-$190 support levels. The second major support level at $191 should limit the downside.
Looking at the Technical Indicators
First Major Support Level: $196
Pivot Level: $200
First Major Resistance Level: $205
23.6% FIB Retracement Level: $195
38.2% FIB Retracement Level: $163
62% FIB Retracement Level: $110
Ripple’s XRP
Ripple’s XRP fell by 0.37% on Friday. Following a 0.25% decline on Thursday, Ripple’s XRP ended the day at $0.46727.
A bearish start saw Ripple’s XRP fall to an early morning intraday low $0.45902 before making a move.
Ripple’s XRP fell through the 38.2% FIB of $0.4632 and the first major support level at $0.4602.
Finding morning support, Ripple’s XRP struck a mid-day intraday high $0.47499.
Falling short of the first major resistance level at $0.4839, however, Ripple’s XRP fell back to sub-$0.47 levels and into the red.
At the time of writing, Ripple’s XRP was down by 0.34% to $0.4657. A mixed start to the day saw Ripple’s XRP rise to an early morning high $0.46672 before falling to a low $0.46557.
Ripple’s XRP left the major support and resistance levels untested early on.
For the day ahead
Ripple’s XRP will need to move through the $0.4671 pivot level to bring the first major resistance level at $0.4752 into play.
Support from the broader market would be needed, however, for Ripple’s XRP to break out from Friday’s high $0.47499.
Barring an extended crypto rally, the first major resistance level would cap any upside.
In the event of an extended rally, Ripple’s XRP could test resistance at $0.4850 before any pullback. The second major resistance level sits at $0.4831.
Failure to move through the $0.4671 pivot would bring the 38.2% FIB of $0.4632 and the first major support level at $0.4592 into play.
Barring an extended sell-off, however, Ripple’s XRP should steer clear of sub-$0.45 levels. The second major support level at $0.4511 should limit the downside.
Looking at the Technical Indicators
First Major Support Level: $0.4592
Pivot Level: $0.4671
First Major resistance Level: $0.4752
23.6% FIB Retracement Level: $0.5320
38.2% FIB Retracement Level: $0.4632
62% FIB Retracement Level: $0.3521
Please let us know what you think in the comments below.
Thanks, Bob
This article was originally posted on FX Empire
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Should You Chase Ethereum Here Or Wait For A Pullback?
In my previous article on Ethereum (ETH) from three weeks ago, I was “… looking for a somewhat tricky, whipsawing, move higher, ideally to around $1880+/-40, but it could even challenge the recent all-time high. From there, I expect several weeks of downside back to $1200+/100. After that, I anticipated the next rally to ~$3000+. However, a weekly close below $1200 targets $900…”
Fast forward, and ETH topped this week, so far, at $1891. Thus, using the Elliott Wave Principle (EWP) and Technical Analysis (TA) was once again a powerful way to forecast the price levels to be reached three weeks in advance. Therefore, it is time to become more cautious by, for example, raising stops, maybe take (partial profits), etc.
In this week’s update, I would like to look at the weekly and monthly charts to better understand ETH’s big picture potential (months to years out). See Figure 1 below.
Figure 1. ETH weekly and monthly charts with EWP count and technical indicators.
A retest of 1200+/-100 and then rally to new all-time highs.
As you can see, the weekly and monthly charts feature two different EWP wave-labels, but both point to higher prices (anticipated paths). The weekly chart’s EWP points to two more rallies (black major-5 and blue Primary-V) after an initial pullback (major-4) before this Bull run is over. Whereas the monthly chart suggests, we could see three more rallies (add purple Cycle 5). I always have an alternate (more Bullish) EWP count for Bull runs like ETH is in to ensure my Premium Crypto Trading Members do not miss out or get caught on the wrong side. The market will eventually tell me which one is correct: “anticipate, monitor, and adjust if necessary.”
What we do know, with all certainty, is that the weekly technical indicators (RSI5, MACD histogram, FSTO, and MFI14) are all negatively diverging (red squares). Although divergence is only divergence till it is not, it means ETH is now moving higher on less strength, less momentum, and less liquidity. The latter is essential because liquidity drives markets. If the buying dries up, only selling is left. However, ETH is well-above all its important Simple Moving Averages (SMAs), which are all rising and Bullishly stacked: 10w>20w>50w>200w). Thus this is still a 100% strong, Bull market.
Story continues
The monthly chart is different as there are no negative divergences on the technical indicators. Instead, the RSI5 is getting very overbought, suggesting there’s less room for upside left over the next 1-2 months. See the 2017 rally for example. However, the monthly Money Flow is still strong, and so is the MACD. Only the FSTO is not in favor of more upside.
Nonetheless, also on the monthly chart, the SMA setup is 100% Bullish: ETH is well-above its rising SMAs, which are also Bullishly stacked: 10m>20m>50m. Thus, this is still a 100% robust, long-term Bull market. Hence, the one-degree higher EWP count compared to what is labeled on the weekly chart has merit.
Bottom line
ETH’s weekly and monthly charts are 100% Bullish and suggest plenty of upside left over the coming months to years. However, negative divergences are creeping in on the weekly chart suggesting a pullback is most likely imminent. A daily close below $1657 will be a severe warning that the $1200+/-100 level will be revisited to complete a more significant correction before ETH can move to new ATHs again.
Buy Ethereum with Binance
This article was originally posted on FX Empire
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