Forex Signals Brief for May 20: Crypto Collapses
US Wrap
It was a wild day on markets yesterday, with the crypto meltdown the obvious focus for all.
Just 24 hours ago, we were focused on whether or not BTC could hold the most recent lows and very quickly we had our answer as price dumped under the $40,000 level. Intraday, we saw a bottom of around $30,000, before price rebounded sharply. The moves started with China suggesting that crypto would never be an acceptable form of payment, however, we’ve had days of negative headlines.
Clearly, some big size was liquidating and that led to a short and nasty sell-off. That dragged on the entire sector and all the major coins were down around 20%-40% from recent highs.
Interestingly, equity markets were weak early on but staged a nice recovery. Meanwhile, there was some movement towards the USD, and that held back the precious metals markets, although we are still seeing strength in GOLD and also Copper.
Overall the market is bouncing back today, but clearly many are going to be spooked and there is very likely more to come.
The Data Agenda
The main data point today will be US jobless claims which are actually headed in the right direction. That said, there is still a bit of a disconnect given that we saw a huge miss in the non-farm payrolls number last month.
Forex Signal Update
The FX Leaders Team had a solid trading session, closing five winners from eight trades as we saw wild moves in many markets.
XRP – Active Signal
XRP has had a rough 24 hours given that it was testing $1.70 only yesterday and looking very bullish. The BTC sell-off dragged the entire market down as we would expect and price has been testing $1.00. Although we are hearing positive things from the SEC case.
LTC – Active Signal
LTC sold off yesterday along with the entire sector, however, we remain long here.
Cryptocurrency Update
Bitcoin was clearly the major focus yesterday as price broke under $40,000 and collapsed down to $30,000.
Nothing was spared and the likes of ETH faired even worse. The next major level for Bitcoin will be $30,000 and although we are green so far today, we must be prepared for more testing times ahead.
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