US Wrap

Both US equity markets and cryptocurrencies were broadly lower yesterday and we have Bidan’s tax plan to thank.

Bidan proposed a higher capital gains tax on the wealthy with a rate of more than 40% on certain segments. This was not what investors wanted to hear and it is a move that does impact holders of cryptocurrency as the gains are of course taxable like most things in the US.

After a big run-up in the price of BTC over the past six months, there are plenty of people sitting on some significant gains. The latest tax talk is clearly a very big incentive for a lot of people to cash out. Particularly if they have to pay 40% of those gains to the taxman. This could certainly be a big trigger for a sell-down in crypto and it could possibly drag the market lower.

The Data Agenda

Data will be quiet in the US, but we do have some interesting numbers in the European session.

Retail sales data from the UK is due to release which continues to be weak which should shock anyone. While from Germany we have the latest Manufacturing PMI.

Germany is really a major focus at the moment on the back of legislation that came through this week giving the Goverment wide-ranging powers that many believe are unjust and violate human rights laws. It could certainly be a trigger event, so watch this space.

Forex Signal Update

The FX Leaders Team had a solid trading session, closing three winners from four trades.

We could see increased volatility to end the week, so be on the lookout at the forex signals page.

XRP – Active Signal

XRP has been a very strong performer in recent weeks are we are back in a long position here. While the market has pulled back I would expect very strong buying interest at the $1.00 level.

LTC – Active Signal

LTC has been holding up OK against a backdrop of selling and we can see the $240 level is holding up for the time being. We remain long here.

Cryptocurrency Update

Once again it was selling in BTC that really dragged the entire sector down.

When the $54,000 level dropped price quickly fell to $50,000 and as is often the case dragged the entire sector with it.

That said, it is very clear that Bitcoin’s dominance is on the decline and there are many alt-coins that are due for a big run. I suspect we will continue to see weakness in Bitcoin going forward while there are a number of alts that will offer far better ROI going forward. The prospect of regulation continues to loom large and I just can’t see how Bitcoin will prosper in that environment. Many others will and they will likely be headed to the moon in the process.