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Top 5 Cryptocurrencies to Watch This Week: BTC, ETH, XRP, XMR, XTZ

Top 5 Cryptocurrencies to Watch This Week: BTC, ETH, XRP, XMR, XTZ

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Bitcoin and most altcoins are likely to remain range-bound for a few more days before resuming the next leg of the up move.

The U.S. markets have rallied sharply from their March lows, led by the tech sector and Fed injections designed to hold up the ailing economy. 

Markets across the globe have also joined the party as a steady economic recovery from the coronavirus pandemic picks up steam. 

The fast-paced rally in global stock markets has pushed the Buffett Indicator into the bubble territory, which suggests that the markets might be overheated in the short-term.

Similarly, gold has seen a sharp rally in 2020 and last week the asset reached a new lifetime high. Silver also followed suit and is trading near multi-year highs. 

This suggests that traders have been diversifying their portfolio into various assets to protect against the debasing of fiat currencies.

Crypto market data daily view

Crypto market data daily view. Source: Coin360

These circumstances are also favorable for Bitcoin (BTC), which has rallied sharply from its March lows. 

However, the biggest cryptocurrency is trading well below its all-time highs, which signals that if the bullish trend continues then there is plenty of potential upside. 

Therefore, even if stocks and gold correct, Bitcoin could behave as an uncorrelated asset during that period. 

BTC/USD

The average directional index (ADX), a component of the directional movement indicator, is above 41, which suggests that Bitcoin is in a strong trend. The positive directional indicator (+DI) is above the negative directional indicator (-DI), indicating advantage to the bulls.

BTC/USD daily chart

BTC/USD daily chart. Source: TradingView

The bulls purchased the dip on Aug. 2 but they are facing resistance close to the overhead zone of $12,113.50–$12,304.37. The BTC/USD pair has formed a pennant, which usually acts as a continuation pattern.

A breakout and close (UTC time) above the pennant will be the first sign that bulls have gained the upper hand. The target objective of such a breakout is $14,756. However, as the overhead resistance of $12,304.37 is close by, traders can wait for the price to sustain above this level before turning positive.

The bears are likely to pose a challenge at $13,000 but that level is likely to be crossed. However, at $14,000 a minor consolidation or a correction is possible.

Contrary to this assumption, if the price dips below the pennant, a drop to the 20-day exponential moving average ($10,957) and then to $10,400 is possible. 

A break below this level will be the first sign that bears are making a comeback. If the $10,000 level cracks, the correction is likely to deepen.

BTC/USD 4-hour chart

BTC/USD 4-hour chart. Source: TradingView

The ADX on the 4-hour chart has dropped to 17.6 level and the +DI and -DI are close to each other, suggesting a range-bound action in the short-term.

A breakout and close (UTC time) above the pennant will signal strength. However, the bears are unlikely to give up without a fight. They will again attempt to stall the up move in the $12,113.50–$12,304.37 zone.

If the price turns down from this zone, a few days of range-bound action between $10,400 and $12,304.37 is possible. However, if the bulls drive the price above $12,304.37, the momentum is likely to pick up.

ETH/USD

Ether (ETH) is currently consolidating in a strong uptrend, with the ADX above 59 levels. The bulls have not allowed the price to dip below the $366 support, which shows that traders are not booking profits in a hurry.

ETH/USD daily chart

ETH/USD daily chart. Source: TradingView

After the strong rally, if the ETH/USD pair does not give up ground, it is a sign that traders expect the uptrend to resume. In this case, a breakout and close above $415.634 will indicate the possible start of the next leg of the up move.

The first target to watch out on the upside is $480 and above it the rally can extend to $542. However, instead of the breakout, if the bears sink and sustain the price below $366, a drop to the 20-day EMA ($347) is possible. If the pair rebounds off this support, the bulls will attempt to resume the uptrend.

If the bears sink the price below the 20-day EMA, a drop to the next support at $320 is possible. 

The deeper the pullback, the longer time it will take for the next leg of the uptrend to begin. A break below $320 will indicate that the advantage is with the bears.

ETH/USD 4-hour chart

ETH/USD 4-hour chart. Source: TradingView

The 4-hour chart shows a symmetrical triangle formation, which generally acts as a continuation pattern. The ADX has dipped below 18 and the +DI and -DI are close to each other, suggesting a consolidation in the short-term.

If the bulls can push the price above the triangle, it will indicate strength but the momentum is likely to pick up only after the price sustains above $415.634. 

On the other hand, if the bears sink the price below the triangle, it will suggest profit booking by the bulls and will increase the possibility of a deeper correction.

XRP/USD

XRP started a strong up move from $0.194008 on July 21 that carried it to a high of $0.326113 on Aug. 2, which is a 68% rally within a short time. This has pushed the ADX close to 52 level, suggesting a strong trend. 

XRP/USD daily chart

XRP/USD daily chart. Source: TradingView

Currently, the XRP/USD pair is correcting the uptrend as short-term traders book profits. This could drag the price to $0.275649, which is the 38.2% Fibonacci retracement level of the most recent leg of the up move. Below this level, the next support is likely to be the 20-day EMA ($0.264).  

If the pair rebounds off either support, it will suggest that the bulls are buying the dips. If they can push the price above the flag, it will be the first sign that buyers have overpowered the sellers.

Above the flag, the first resistance could be $0.326113 and then $0.346727. If the bulls can propel the price above this zone, the momentum is likely to pick up. The next target to watch out for is $0.422. 

This bullish view will be invalidated if the bears sink the price below the flag. Such a move could signal a deeper correction.

XRP/USD 4-hour chart

XRP/USD 4-hour chart. Source: TradingView

The ADX on the 4-hour chart has dropped to about 21 level and the price is consolidating inside a symmetrical triangle, which suggests a balance between the bulls and the bears.

If the bulls can push the price above the triangle, a move to $0.326113 is possible. A break above this level might signal the resumption of the up move.

Conversely, if the bears sink the price below the triangle, a deeper correction to the 68.2% Fibonacci level of $0.244472 is possible.

A break below this support could result in a complete 100% retracement of the most recent leg of the up move, dragging the price down to $0.194008.

XMR/USD

Monero (XMR) hit an intraday high of $96.5594 on Aug.6, which met the target objective of $95 as suggested in an earlier analysis. The rally of the past few days has pushed the ADX to above 54 levels, which suggests a strong trend.

XMR/USD daily chart

XMR/USD daily chart. Source: TradingView

During two previous occasions (marked via ellipses on the chart) the XMR/USD pair had reversed direction from close to the $97.4615 level. Hence, the bears might again mount a strong defense at this resistance.

However, the pair has formed two successive inside day candlestick patterns in the past two days, which suggests uncertainty among the bulls and the bears about the next directional move.

A breakout and close (UTC time) above $97.4615 is likely to resume the uptrend. The next target objective is $121, with a minor resistance at $107, which is likely to be crossed. Traders can turn positive after the price sustains above $97.4615.

Conversely, if the bears sink the price below $90, a deeper correction to the 20-day EMA ($84) is possible.

VET/USD 4-hour chart

VET/USD 4-hour chart. Source: TradingView

The ADX on the 4-hour chart has dropped to below 15 levels, and the +DI and the -DI are close to each other, suggesting a balance between the bulls and the bears. The 20-EMA is also flattening out, which is another indication of a consolidation.

A breakout of $97.4615 will signal the likelihood of the start of the next leg of the uptrend while a break below $90 will indicate that the bears are making a comeback.

XTZ/USD

Tezos (XTZ) broke out of the $2.63–$3.25 range on Aug.8, which suggests that the bulls have overpowered the bears. The 20-day EMA ($3.08) is sloping up, which also suggests that the bulls have the upper hand.

XTZ/USD daily chart

XTZ/USD daily chart. Source: TradingView

If the bulls can sustain the price above $3.25, the next target objective is $3.87, which is just below the Feb. 19 highs of $3.97. The bears are likely to mount a stiff resistance at this level but if the bulls can scale the price above it, the momentum is likely to pick up.

Currently, the ADX is close to 18 levels, which suggests that the trend has still not picked up strength. The bears will make an attempt to drag the XTZ/USD pair back below $3.25. If they succeed, the pair could remain range-bound for a few more days.

XTZ/USD 4-hour chart

XTZ/USD 4-hour chart. Source: TradingView

The 4-hour chart shows that after two failed attempts, the bulls have finally managed to sustain the price above the range. The 20-EMA has turned up, which suggests that the bulls have the upper hand.

If the bulls purchase the retest of the $3.25 support, it will be a positive sign and will indicate that the sentiment is to buy the dips. A strong bounce off this support could offer a low-risk entry opportunity to the traders who are bullish.

Conversely, if the bears sink the price back below $3.25, then it will indicate that the current breakout was a bull trap.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Chronic stress and inflammation linked to societal and environmental impacts in new study

From anxiety about the state of the world to ongoing waves of Covid-19, the stresses we face can seem relentless and even overwhelming. Worse, these stressors…

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From anxiety about the state of the world to ongoing waves of Covid-19, the stresses we face can seem relentless and even overwhelming. Worse, these stressors can cause chronic inflammation in our bodies. Chronic inflammation is linked to serious conditions such as cardiovascular disease and cancer – and may also affect our thinking and behavior.   

Credit: Image: Vodovotz et al/Frontiers

From anxiety about the state of the world to ongoing waves of Covid-19, the stresses we face can seem relentless and even overwhelming. Worse, these stressors can cause chronic inflammation in our bodies. Chronic inflammation is linked to serious conditions such as cardiovascular disease and cancer – and may also affect our thinking and behavior.   

A new hypothesis published in Frontiers in Science suggests the negative impacts may extend far further.   

“We propose that stress, inflammation, and consequently impaired cognition in individuals can scale up to communities and populations,” explained lead author Prof Yoram Vodovotz of the University of Pittsburgh, USA.

“This could affect the decision-making and behavior of entire societies, impair our cognitive ability to address complex issues like climate change, social unrest, and infectious disease – and ultimately lead to a self-sustaining cycle of societal dysfunction and environmental degradation,” he added.

Bodily inflammation ‘mapped’ in the brain  

One central premise to the hypothesis is an association between chronic inflammation and cognitive dysfunction.  

“The cause of this well-known phenomenon is not currently known,” said Vodovotz. “We propose a mechanism, which we call the ‘central inflammation map’.”    

The authors’ novel idea is that the brain creates its own copy of bodily inflammation. Normally, this inflammation map allows the brain to manage the inflammatory response and promote healing.   

When inflammation is high or chronic, however, the response goes awry and can damage healthy tissues and organs. The authors suggest the inflammation map could similarly harm the brain and impair cognition, emotion, and behavior.   

Accelerated spread of stress and inflammation online   

A second premise is the spread of chronic inflammation from individuals to populations.  

“While inflammation is not contagious per se, it could still spread via the transmission of stress among people,” explained Vodovotz.   

The authors further suggest that stress is being transmitted faster than ever before, through social media and other digital communications.  

“People are constantly bombarded with high levels of distressing information, be it the news, negative online comments, or a feeling of inadequacy when viewing social media feeds,” said Vodovotz. “We hypothesize that this new dimension of human experience, from which it is difficult to escape, is driving stress, chronic inflammation, and cognitive impairment across global societies.”   

Inflammation as a driver of social and planetary disruption  

These ideas shift our view of inflammation as a biological process restricted to an individual. Instead, the authors see it as a multiscale process linking molecular, cellular, and physiological interactions in each of us to altered decision-making and behavior in populations – and ultimately to large-scale societal and environmental impacts.  

“Stress-impaired judgment could explain the chaotic and counter-intuitive responses of large parts of the global population to stressful events such as climate change and the Covid-19 pandemic,” explained Vodovotz.  

“An inability to address these and other stressors may propagate a self-fulfilling sense of pervasive danger, causing further stress, inflammation, and impaired cognition in a runaway, positive feedback loop,” he added.  

The fact that current levels of global stress have not led to widespread societal disorder could indicate an equally strong stabilizing effect from “controllers” such as trust in laws, science, and multinational organizations like the United Nations.   

“However, societal norms and institutions are increasingly being questioned, at times rightly so as relics of a foregone era,” said Prof Paul Verschure of Radboud University, the Netherlands, and a co-author of the article. “The challenge today is how we can ward off a new adversarial era of instability due to global stress caused by a multi-scale combination of geopolitical fragmentation, conflicts, and ecological collapse amplified by existential angst, cognitive overload, and runaway disinformation.”    

Reducing social media exposure as part of the solution  

The authors developed a mathematical model to test their ideas and explore ways to reduce stress and build resilience.  

“Preliminary results highlight the need for interventions at multiple levels and scales,” commented co-author Prof Julia Arciero of Indiana University, USA.  

“While anti-inflammatory drugs are sometimes used to treat medical conditions associated with inflammation, we do not believe these are the whole answer for individuals,” said Dr David Katz, co-author and a specialist in preventive and lifestyle medicine based in the US. “Lifestyle changes such as healthy nutrition, exercise, and reducing exposure to stressful online content could also be important.”  

“The dawning new era of precision and personalized therapeutics could also offer enormous potential,” he added.  

At the societal level, the authors suggest creating calm public spaces and providing education on the norms and institutions that keep our societies stable and functioning.  

“While our ‘inflammation map’ hypothesis and corresponding mathematical model are a start, a coordinated and interdisciplinary research effort is needed to define interventions that would improve the lives of individuals and the resilience of communities to stress. We hope our article stimulates scientists around the world to take up this challenge,” Vodovotz concluded.  

The article is part of the Frontiers in Science multimedia article hub ‘A multiscale map of inflammatory stress’. The hub features a video, an explainer, a version of the article written for kids, and an editorial, viewpoints, and policy outlook from other eminent experts: Prof David Almeida (Penn State University, USA), Prof Pietro Ghezzi (University of Urbino Carlo Bo, Italy), and Dr Ioannis P Androulakis (Rutgers, The State University of New Jersey, USA). 


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Acadia’s Nuplazid fails PhIII study due to higher-than-expected placebo effect

After years of trying to expand the market territory for Nuplazid, Acadia Pharmaceuticals might have hit a dead end, with a Phase III fail in schizophrenia…

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After years of trying to expand the market territory for Nuplazid, Acadia Pharmaceuticals might have hit a dead end, with a Phase III fail in schizophrenia due to the placebo arm performing better than expected.

Steve Davis

“We will continue to analyze these data with our scientific advisors, but we do not intend to conduct any further clinical trials with pimavanserin,” CEO Steve Davis said in a Monday press release. Acadia’s stock $ACAD dropped by 17.41% before the market opened Tuesday.

Pimavanserin, a serotonin inverse agonist and also a 5-HT2A receptor antagonist, is already in the market with the brand name Nuplazid for Parkinson’s disease psychosis. Efforts to expand into other indications such as Alzheimer’s-related psychosis and major depression have been unsuccessful, and previous trials in schizophrenia have yielded mixed data at best. Its February presentation does not list other pimavanserin studies in progress.

The Phase III ADVANCE-2 trial investigated 34 mg pimavanserin versus placebo in 454 patients who have negative symptoms of schizophrenia. The study used the negative symptom assessment-16 (NSA-16) total score as a primary endpoint and followed participants up to week 26. Study participants have control of positive symptoms due to antipsychotic therapies.

The company said that the change from baseline in this measure for the treatment arm was similar between the Phase II ADVANCE-1 study and ADVANCE-2 at -11.6 and -11.8, respectively. However, the placebo was higher in ADVANCE-2 at -11.1, when this was -8.5 in ADVANCE-1. The p-value in ADVANCE-2 was 0.4825.

In July last year, another Phase III schizophrenia trial — by Sumitomo and Otsuka — also reported negative results due to what the company noted as Covid-19 induced placebo effect.

According to Mizuho Securities analysts, ADVANCE-2 data were disappointing considering the company applied what it learned from ADVANCE-1, such as recruiting patients outside the US to alleviate a high placebo effect. The Phase III recruited participants in Argentina and Europe.

Analysts at Cowen added that the placebo effect has been a “notorious headwind” in US-based trials, which appears to “now extend” to ex-US studies. But they also noted ADVANCE-1 reported a “modest effect” from the drug anyway.

Nonetheless, pimavanserin’s safety profile in the late-stage study “was consistent with previous clinical trials,” with the drug having an adverse event rate of 30.4% versus 40.3% with placebo, the company said. Back in 2018, even with the FDA approval for Parkinson’s psychosis, there was an intense spotlight on Nuplazid’s safety profile.

Acadia previously aimed to get Nuplazid approved for Alzheimer’s-related psychosis but had many hurdles. The drug faced an adcomm in June 2022 that voted 9-3 noting that the drug is unlikely to be effective in this setting, culminating in a CRL a few months later.

As for the company’s next R&D milestones, Mizuho analysts said it won’t be anytime soon: There is the Phase III study for ACP-101 in Prader-Willi syndrome with data expected late next year and a Phase II trial for ACP-204 in Alzheimer’s disease psychosis with results anticipated in 2026.

Acadia collected $549.2 million in full-year 2023 revenues for Nuplazid, with $143.9 million in the fourth quarter.

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Digital Currency And Gold As Speculative Warnings

Over the last few years, digital currencies and gold have become decent barometers of speculative investor appetite. Such isn’t surprising given the evolution…

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Over the last few years, digital currencies and gold have become decent barometers of speculative investor appetite. Such isn’t surprising given the evolution of the market into a “casino” following the pandemic, where retail traders have increased their speculative appetites.

“Such is unsurprising, given that retail investors often fall victim to the psychological behavior of the “fear of missing out.” The chart below shows the “dumb money index” versus the S&P 500. Once again, retail investors are very long equities relative to the institutional players ascribed to being the “smart money.””

“The difference between “smart” and “dumb money” investors shows that, more often than not, the “dumb money” invests near market tops and sells near market bottoms.”

Net Smart Dumb Money vs Market

That enthusiasm has increased sharply since last November as stocks surged in hopes that the Federal Reserve would cut interest rates. As noted by Sentiment Trader:

“Over the past 18 weeks, the straight-up rally has moved us to an interesting juncture in the Sentiment Cycle. For the past few weeks, the S&P 500 has demonstrated a high positive correlation to the ‘Enthusiasm’ part of the cycle and a highly negative correlation to the ‘Panic’ phase.”

Investor Enthusiasm

That frenzy to chase the markets, driven by the psychological bias of the “fear of missing out,” has permeated the entirety of the market. As noted in This Is Nuts:”

“Since then, the entire market has surged higher following last week’s earnings report from Nvidia (NVDA). The reason I say “this is nuts” is the assumption that all companies were going to grow earnings and revenue at Nvidia’s rate. There is little doubt about Nvidia’s earnings and revenue growth rates. However, to maintain that growth pace indefinitely, particularly at 32x price-to-sales, means others like AMD and Intel must lose market share.”

Nvidia Price To Sales

Of course, it is not just a speculative frenzy in the markets for stocks, specifically anything related to “artificial intelligence,” but that exuberance has spilled over into gold and cryptocurrencies.

Birds Of A Feather

There are a couple of ways to measure exuberance in the assets. While sentiment measures examine the broad market, technical indicators can reflect exuberance on individual asset levels. However, before we get to our charts, we need a brief explanation of statistics, specifically, standard deviation.

As I discussed in “Revisiting Bob Farrell’s 10 Investing Rules”:

“Like a rubber band that has been stretched too far – it must be relaxed in order to be stretched again. This is exactly the same for stock prices that are anchored to their moving averages. Trends that get overextended in one direction, or another, always return to their long-term average. Even during a strong uptrend or strong downtrend, prices often move back (revert) to a long-term moving average.”

The idea of “stretching the rubber band” can be measured in several ways, but I will limit our discussion this week to Standard Deviation and measuring deviation with “Bollinger Bands.”

“Standard Deviation” is defined as:

“A measure of the dispersion of a set of data from its mean. The more spread apart the data, the higher the deviation. Standard deviation is calculated as the square root of the variance.”

In plain English, this means that the further away from the average that an event occurs, the more unlikely it becomes. As shown below, out of 1000 occurrences, only three will fall outside the area of 3 standard deviations. 95.4% of the time, events will occur within two standard deviations.

Standard Deviation Chart

A second measure of “exuberance” is “relative strength.”

“In technical analysis, the relative strength index (RSI) is a momentum indicator that measures the magnitude of recent price changes to evaluate overbought or oversold conditions in the price of a stock or other asset. The RSI is displayed as an oscillator (a line graph that moves between two extremes) and can read from 0 to 100.

Traditional interpretation and usage of the RSI are that values of 70 or above indicate that a security is becoming overbought or overvalued and may be primed for a trend reversal or corrective pullback in price. An RSI reading of 30 or below indicates an oversold or undervalued condition.” – Investopedia

With those two measures, let’s look at Nvidia (NVDA), the poster child of speculative momentum trading in the markets. Nvidia trades more than 3 standard deviations above its moving average, and its RSI is 81. The last time this occurred was in July of 2023 when Nvidia consolidated and corrected prices through November.

NVDA chart vs Bollinger Bands

Interestingly, gold also trades well into 3 standard deviation territory with an RSI reading of 75. Given that gold is supposed to be a “safe haven” or “risk off” asset, it is instead getting swept up in the current market exuberance.

Gold vs Bollinger Bands

The same is seen with digital currencies. Given the recent approval of spot, Bitcoin exchange-traded funds (ETFs), the panic bid to buy Bitcoin has pushed the price well into 3 standard deviation territory with an RSI of 73.

Bitcoin vs Bollinger Bands

In other words, the stock market frenzy to “buy anything that is going up” has spread from just a handful of stocks related to artificial intelligence to gold and digital currencies.

It’s All Relative

We can see the correlation between stock market exuberance and gold and digital currency, which has risen since 2015 but accelerated following the post-pandemic, stimulus-fueled market frenzy. Since the market, gold and cryptocurrencies, or Bitcoin for our purposes, have disparate prices, we have rebased the performance to 100 in 2015.

Gold was supposed to be an inflation hedge. Yet, in 2022, gold prices fell as the market declined and inflation surged to 9%. However, as inflation has fallen and the stock market surged, so has gold. Notably, since 2015, gold and the market have moved in a more correlated pattern, which has reduced the hedging effect of gold in portfolios. In other words, during the subsequent market decline, gold will likely track stocks lower, failing to provide its “wealth preservation” status for investors.

SP500 vs Gold

The same goes for cryptocurrencies. Bitcoin is substantially more volatile than gold and tends to ebb and flow with the overall market. As sentiment surges in the S&P 500, Bitcoin and other cryptocurrencies follow suit as speculative appetites increase. Unfortunately, for individuals once again piling into Bitcoin to chase rising prices, if, or when, the market corrects, the decline in cryptocurrencies will likely substantially outpace the decline in market-based equities. This is particularly the case as Wall Street can now short the spot-Bitcoin ETFs, creating additional selling pressure on Bitcoin.

SP500 vs Bitcoin

Just for added measure, here is Bitcoin versus gold.

Gold vs Bitcoin

Not A Recommendation

There are many narratives surrounding the markets, digital currency, and gold. However, in today’s market, more than in previous years, all assets are getting swept up into the investor-feeding frenzy.

Sure, this time could be different. I am only making an observation and not an investment recommendation.

However, from a portfolio management perspective, it will likely pay to remain attentive to the correlated risk between asset classes. If some event causes a reversal in bullish exuberance, cash and bonds may be the only place to hide.

The post Digital Currency And Gold As Speculative Warnings appeared first on RIA.

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