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(+) Pumping and Immersion

One of the biggest problems of the crypto-market as we know it is the lack of regulation.

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It's great to see that some new businesses can bypass the traditional financial industry and raise large amounts of start-up capital in an ICO but of course, many people are taking advantage of it and using this new market to create scams for tokens this may not have any value at all.

The real problem, however, is what happens after creating a worthless token. Many times, these new chips become prime targets for pumping and dump schemes, which are perpetrated shamelessly by groups like the "PumpKing Community" on the Telegram app.

I recently had the pleasure of working with Oscar Williams-Grut of Business Insider UK, who wrote an excellent article explaining everything.

eToro, Senior Market Analyst

Please note: All data, figures and graphs are valid as of November 14th. Every trade carries risks. Only venture capital that you can afford to lose.

Summary of the market

It is quite common nowadays that a country borrows more money than it could ever do. For example, the US government now owes more than $ 20 trillion to other countries and private investors. This usually does not pose a problem as long as they can repay the service payments on these loans. When you are a country, you generally have more freedom to borrow.

Think of it like this, the bank allows you to borrow money to buy a house that costs $ 20 million. By granting you this loan, they take a minimum down payment of $ 250,000 and largely ignore the fact that it will take you over 300 years to repay the full amount. In fact, the only thing they look at, is your ability to pay back the $ 2,500 monthly bill.

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The United States has no immediate risk of defaulting on its monthly payments, but it seems that Venezuela has just done so.

A month ago, they had difficulty repaying $ 200 million of their debt, but they were given a 30-day grace period, which has just expired. The most likely situation now is that their investors will remain patient, hoping and praying to recover their money. There is also a chance however that they regroup and demand payment, in which case things could become really ugly.

The main thing to watch for is the price of crude oil. Venezuelan oil companies owned by the state currently contribute about 6% of OPEC oil. So, if they are unable to run the pumps, there will be a significant drop in supply from South America.

"The supply of oil from Venezuela has recently declined, but if the country is in default, it will be extremely difficult for it to meet its reduced quotas."

Tali Solomon
eToro, Analyst of the Spanish Region

The price of oil is already quite high at the moment, so it will be interesting to see how this saga unfolds over the next few days.

Sudden Swings

Just as I write to you, I can see some graphics that have moved quite quickly. The reason for the move is still not clear to me but the movements themselves are loud enough to comment.

There are some breaks in some currency pairs but none of them really seems to be connected. Here is a graph of Finviz that gives a good overview.

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So, the Euro is breaking with a sharp break above 1.1700 …

The yen is down, with the USDJPY bursts above 113.70 …

The New Zealand dollar is the worst of this violent swing, but take a look at gold that hits $ 1,270 an ounce before bouncing back.

… but the coolest part of all this is that we could finally have an escape in ETHEREUM. We've been following this triangle pattern for a while now. In the last few hours, the top line of the model is undergoing a serious test …

With all the excitement of crypto markets in recent times, it's nice to see ETH join the party, fashionable as usual. The move could also have something to do with new upgrades that are planned on the grid and that will move from high-power operation to a better system called PoS.

What else?

All eyes and ears are on the big meeting of the Central Bank in Frankfurt. Guest speakers will be Mario Draghi, Janet Yellen, Mark Carney and Haruhiko Kuroda. These four people have more influence over global cash flows than anyone else in the world right now.

The numbers have been good lately, really good. Economic growth and the number of jobs in most developed countries have exceeded expectations and, thanks to the abundant sums of money that central banks have injected into the system, the stock markets are reaching record levels.

At some point, perhaps soon, central banks will want to start tightening money by raising interest rates and reducing the amount of cash injections.

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There is no doubt that we will hear a lot of grandiose statements and tapping of the quartet. Try and see the past. Markets want to know about the upcoming policy. Of course, "the economy is fine," but what does it intend to do about it? Will they put their money in their mouths and start becoming aggressive?

Will Japan ease its printing of money? Will Europe begin to signal that it is ready to abandon negative interest rates? Let's see if they find a central theme on the evolution of things, then we can really see the markets start to move.

Have a nice day!

This content is for informational and informational purposes only and should not be considered as investment advice or recommendation.
The presented perspectives are a personal opinion of the analyst and do not represent an official position of eToro.

Past performance is not an indication of future results. All exchanges involve risks; only the venture capital that you are willing to lose.