Cryptocurrencies Slide Continues as Hype Recedes

The price of Bitcoin continued the freefall started more than a week ago. The decline started after the hard fork of Bitcoin Cash on Thursday 15 this month. This forking led to many cryptocurrencies’ investors to lose hope on the industry because of the dilution factor. As a result, the market valuation of Bitcoin has dropped to $64 billion. This is a sharp decline from the YTD valuation high of more than $300 billion. The total market capitalization of cryptocurrencies tracked by Coin Market Cap has dropped by more than $100 billion to $122 billion.

The price of crude oil dropped slightly after yesterday’s relief rally. The drop came after Donald Trump talked to the Wall Street Journal (WSJ) about his upcoming meetings at the G20. In the interview, he said that he was little optimistic about his meeting with China’s Xi. Traders were hopeful that the meeting will provide an opportunity for the two biggest economies to make a truce. Such a truce would help change the current business climate and improve the economic growth in the coming year. Analysts are banking on the weakness of the US stock market to force the US president to make a deal.

After dropping yesterday, the USD/JPY started another upward rally overnight. This was a continuation of a rally that started on November 20, when the pair reached 112.30. Overnight, the Bank of Japan released the corporate services index, which rose by 1.3%. This was higher than the consensus estimate of 1.2% and the previous month’s 1.1%. The index measures the change in the prices of services offered by companies such as consultancies. It is an important measure of inflation. Later today, its movement will likely be caused by the US consumer confidence data.

EUR/USD

After falling yesterday, the EUR/USD pair was little moved overnight. The pair is trading at 1.1335, which is along the 20-day EMA. It is also close to the 50% Fibonacci Retracement level. The RSI has remained at 45, which is a neutral level. This means that the pair could move in either direction today depending on the US, France and Italy consumer confidence numbers.

USD/JPY

The USD/JPY pair resumed the upward trend and reached an intraday high of 113.53. Its price is along the 15-day EMA and above the 30-day EMA. The RSI has eased from yesterday’s high of 80 to the current 15. The pair will likely cross the resistance level of 113.65 and continue the upward trend. If it does, it will likely test the important resistance level of 114.

XTI/USD

The XTI/USD pair eased from yesterday’s rally and resumed the downward trend. This is a strong trend that started on October 3. The pair’s price is below the 30, 50, and 100-day EMAs as shown below. The RSI has moved from below 27 to the current 37, while the Bears power strength has eased a bit. The pair will likely continue the downward trend. If it does, it will likely move below 50. However, the coming OPEC and G20 meetings could reverse the downward trend.