The Dow Jones Industrial Average enters Tuesday seeking to snap a streak of two consecutive losing sessions, but the specters of the Brexit vote and earnings season threaten to derail the index’s mid-week recovery. The cryptocurrency market, meanwhile, continues to flash green, as bitcoin and other large-cap assets cling to Monday’s recovery while bracing for Constantinople, Ethereum’s upcoming hard fork.
Dow Trades Sideways in Advance of Opening Bell
Traditional markets remain shaky ahead of Tuesday’s opening bell, and futures contracts tracking the Dow and its peers spent much of the day bouncing around their levels at Monday’s close.
As of the time of writing at 8:32 am ET, Dow futures were down just 2 points to 23,865, while S&P 500 and Nasdaq futures both traded slightly in the green with gains of 0.11 percent and 0.42 percent, respectively.
Yesterday, the Dow, S&P 500, and Nasdaq all closed in the red for the second consecutive day after posting a five-day winning streak. The Dow dropped 86.11 points or 0.36 percent, once again failing to break through and hold above the elusive 24,000 mark. The S&P 500 shed 13.65 points or 0.53 percent, and the Nasdaq endured a 65.56 or 0.94 percent drop-off.
Nevertheless, all three indices remain firmly in positive territory for 2019 and have mostly erased the mid-December losses that contributed to the stock market’s dismal end to last year.
Concern as JP Morgan Misses Profit for First Time in 15 Quarters
Wall Street continues to closely monitor corporate earnings as analysts weigh the risk of the US economy slipping into a recession.
Sentiment turned sour on Tuesday morning after JP Morgan missed profit expectations for the first time in 15 quarters. According to CNBC, the Jamie Dimon-led banking giant accrued $1.98 per share in profit during the fourth quarter of 2018, well below the $2.20 per share that analysts had expected.
Like Citigroup, which missed revenue targets but nevertheless rallied on stronger-than-expected profit figures, JP Morgan blamed a decline in bond trading revenue for weighing on its fourth-quarter performance.
“Despite a challenging quarter, we grew markets revenue in the investment bank for the year with record performance in equities and solid performance in fixed income,” CEO Jamie Dimon said in the earnings release.
Dimon, who has said that he does not believe the US is heading into the outer rings of a recession, nevertheless admonished the country’s leaders to “strike a collaborative, constructive tone, which would reinforce already-strong consumer and business sentiment. Businesses, government and communities need to work together to solve problems and help strengthen the economy for the benefit of everyone.”
Brexit Hangs in the Balance
But while corporate earnings promise to remain a lingering concern for the stock market’s recent recovery, today’s Brexit vote could be a far more pressing threat.
British Prime Minister Theresa May’s Brexit plan is expected to fail in parliament today — perhaps spectacularly — but analysts predict that the vote will inject significant volatility into the markets, so much so that many brokers have limited leverage for UK stocks and currency futures.
As Marc Chandler, Bannockburn Global Forex chief market strategist, told CNBC:
We could see knee-jerk volatility. She could lose by a historic margin. This could be a historic loss by the government.
In preparation for this seeming eventuality, May told senior ministers that she would continue to work to facilitate Britain’s orderly exit from the European Union and “respond quickly” to the outcome of the vote, which is expected to take place between 7 pm and 9 pm GMT.
“The prime minister said the government is the servant of the people and she believes passionately that we must deliver on the result of the 2016 referendum,” a spokesman for the prime minister said in remarks quoted by Reuters. “She added that after the vote has taken place, she would respond quickly to the result.”
Bitcoin Clings to Gains as Ethereum Braces for Constantinople
Neither Brexit nor corporate earnings season is expected to have much direct impact on the cryptocurrency markets, though some analysts including eToro’s Mati Greenspan maintain that bitcoin and its peers are more connected to other asset classes than many investors realize.
In any case, the crypto market saw a moderate recovery on Monday. The bitcoin price, which had on Sunday slipped below the so-called “GTFO” level of $3,500, popped above the $3,700 mark on Bitstamp and other cryptocurrency exchanges, though it has since ebbed to $3,647 as of the time of writing.
The ethereum price, meanwhile, is up 8 percent on the day, owing to optimism over the Jan. 16 Constantinople hard fork. The fork, which will activate at block 7080000, will introduce a number of upgrades into the Ethereum protocol, which developers say will better prepare it to scale to the requirements of future mainstream adoption.
Equally as important is that Constantinople will reduce the ethereum inflation rate by 33 percent, as the cryptocurrency’s block reward will decline to 2 ETH per block from 3 ETH. This should reduce selling pressure from miners.
Importantly, this hard fork, unlike the recent one which roiled Bitcoin Cash, is not expected to splinter the Ethereum network into multiple competing versions — and cryptocurrencies. While a group of disgruntled users could always refuse to migrate to the new protocol version, miners, exchanges, and other infrastructure providers have committed to supporting the network upgrade.
Nevertheless, traders will be closely watching the hard fork’s activation, as unforeseen bugs and other disruptions could lead to significant price volatility in the short-term.
Bitcoin (BTCUSD) weekly forecast on February 18 — 24, 2019
Cryptocurrency Bitcoin (BTC/USD) is trading at 3587. Cryptocurrency quotes are trading below the moving average with a period of 55. This indicates a bearish trend for Bitcoin. At the moment, cryptocurrency quotes are moving near the upper border of the Bollinger Bands indicator.
Bitcoin (BTCUSD) weekly forecast on February 18 — 24, 2019
As part of the Bitcoin exchange rate forecast, the test level of 3820 is expected. Where should we expect an attempt to continue the fall of BTC/USD and the further development of the downward trend. The purpose of this movement is the area near the level of 2700. The conservative area for selling Bitcoin is located near the upper border of the Bollinger Bands indicator at the level of 3850.
Cancellation of the option to continue the decline in Bitcoin will be the breakdown of the area of the upper border of the Bollinger Bands indicator. As well as the moving average with a period of 55 and closing of quotations of the pair above the area of 4250. This will indicate a change in the current trend in favor of the bullish for BTC/USD. In the event of a breakdown of the lower border of the Bollinger Bands indicator bands, we should expect an acceleration of the fall of the cryptocurrency.
Bitcoin (BTCUSD) weekly forecast on February 18 — 24, 2019 implies a test level of 3820. Further, it is expected to continue falling to the area below the level of 2700. The conservative area for selling Bitcoin is located area of 3850. Canceling the option of falling cryptocurrency will break the level of 4250. In this case, we should expect continued growth.
BTCUSD Analysis: Bitcoin still trading in a bearish consolidation [Video]
Any upside moves are classified as corrective ahead of what could be the next downside extension and bearish continuation. It would take a break back above 4,380 at a minimum to take the immediate pressure off the downside. Next critical support comes in the form of the July and September 2017 lows, around 2,000 and 2,975 respectively.
In this analysis, we take a look at Bitcoin each day, highlighting all of the need to knows for anyone looking to extract up to date information about major levels and relevant trends, both short term and longer-term. The analysis is designed for the trader, investor and even those simply holding the crypto asset, looking for an idea of where they may want to consider making that next conversion.
The cryptocurrency update is new each day and is presented with an added layer of animation, in an effort to make the analysis as engaging as possible, while also communicating the message with respect to key trends and levels in an easy to understand, seamless manner with great value add to all.
Are Central Bank Digital Currencies (CBDCs) Net Positive Or Negative For Bitcoin And Crypto Assets?
Central Bank Digital Currencies (CBDCs) have been analyzed by several banking institutions around the world, specifically by several central banks in different countries. However, they are different than virtual currencies such as Bitcoin (BTC). How would the issuance of CBDCs affect Bitcoin and the whole crypto market?
There are some important differences between Bitcoin and CBDCs. For example, Bitcoin is permissionless, decentralized and censorship-resistant while CBDCs are permission, centralized and censorable. Thus, they are almost contrary to Bitcoin. While the most popular cryptocurrency provides freedom to users, CBDCs allow governments to have larger control over their populations.
A few days ago, the popular investment bank JP Morgan unveiled a stablecoin called JPM Coin that would be used to make transfers between customers in just a few seconds. Although JP Morgan’s CEO Jamie Dimon has been against virtual currencies, it seems that the bank will be using blockchain technology to power their virtual currency.
There were several individuals in the market claiming that the new JP Morgan digital coin killed Bitcoin, or at least, it is going to kill the most popular cryptocurrency in the market. However, it is important to understand that these coins will never be similar and work in a completely different way. CBDCs and stablecoins issued by financial institutions such as JP Morgan work in a centralized and controlled way.
Indeed, these new digital assets do not seem to present a threat to cryptocurrencies such as Bitcoin. SWIFT could be affected by these new coins. SWIFT is the mainstream and most popular system to perform cross-border payments. This system has proven to be slow and costly for many financial institutions and banks all over the world. Indeed, Ripple’s services could also be affected by the growth of new CBDCs.
CBDCs legitimize that virtual currencies are the future of money. Because of this, it might be possible for Bitcoin to distance itself from drugs and criminals. At the same time, with CBDCs individuals will discover that there are several advantages of using digital assets.
Individuals will clearly have their funds frozen at any moment using CBDCs if the financial institution regulating the asset decides so. Moreover, their accounts can be suspended and users would not be able to use these funds anymore.
There are some crypto experts that believe that CBDCs could be very harmful to societies. For example, China is currently trying to control its population with new surveillance systems related to how individuals use their funds.
Crypto fiat (i.e. government controlled permissioned cryptocurrencies) will be the biggest battleground globally for human rights over the next decade. China is leading the way, many other countries, including some big western democracies, will follow. https://t.co/8BqfmBJ2mP
— Ari Paul (@AriDavidPaul) February 13, 2019
With CBDCs, people will realize that there is no more freedom and that the government is ultimately controlling everything. This is why Bitcoin could grow as a safe haven where users can feel free to use their funds as they want without being controlled by governments.
That does not mean that Bitcoin will be used to perform illegal things. It means that users will protect their privacy and what they do with their funds.