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$80 Billion Exits Crypto Market Amid South Korean Jitters, but Seoul Is Not Banning Cryptocurrency

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Headlines about a ‘pending ban’ on cryptocurrency trading in South Korea triggered a mass exodus from the asset class on Thursday, with roughly $80 billion flowing out of the market. Of course, the East Asian country has not actually banned crypto exchanges, but is considering a host of measures to stamp out anonymous trading.

Not So Fast

Reuters brought some much needed clarity to the situation early Thursday in an article that cited a spokesperson at the presidential office.

“Justice Minister Park’s comments related to shutdown of cryptocurrency exchanges is one of the measures prepared by the Ministry of Justice, but it’s not a measure that has been finalized,” the person said.

Several news outlets had earlier implied that the decision was already made, and that Seoul was getting ready to ban all domestic crypto exchanges. New proposed legislation in South Korea seeks to ban anonymous accounts and prevent financial institutions from settling transactions for unidentified cryptocurrency trades. That’s very different from a blanket ban on cryptocurrency trading.

The central government in Seoul also warned that the digital asset class could be “vulnerable to the damage from investment fraud or hacking attacks on the exchanges.”

Local media outlet Yonhap News agency also provided more clarity on the matter:

“Under the new measure, only real-name bank accounts and matching accounts at cryptocurrency exchanges can be used for deposits and withdrawals, while the issuance of new virtual accounts to cryptocurrency exchanges will be banned.”

Crypto Market Declines

Although South Korea has not implemented anything as harsh as some media outlets have reported, investors clicked the panic button on Thursday, resulting in a brisk selloff of most major coins. At the time of writing, only five of the top 100 virtual currencies had were trading neutral or positive, according to data provider CoinMarketCap.

The majority of coins in the top 100 were down double digits, sending the total market cap to as low as $626 billion. At the start of trading Thursday, the total market cap of all coins was nearly $735 billion.

At press time, the total market cap was roughly $656 billion.

Bitcoin was off more than 10%, while Ethereum and bitcoin cash each fell more than 12%. Other big losers included Cardano, Litecoin, IOTA and Tron, each of which declined more than 12% (all figures according to CoinMarketCap).

Naturally, investors have something to fret about when South Korean regulation is in the headlines. The country has quickly emerged as a major force in the cryptocurrency market, and is responsible for a huge percentage of daily trade volumes. That being said, many crypto traders feel the need to navigate away from mainstream media sources when it comes to crypto news.

Litecoin founder Charlie Lee poked fun at mainstream media’s tendency to exaggerate the perils of cryptocurrency in a tweet earlier in the day:

“Korea bans Bitcoin FUD is the new China bans Bitcoin FUD.”

FUD stands for fear, uncertainty and doubt.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 546 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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2 Comments

2 Comments

  1. Parentesi

    January 12, 2018 at 4:13 am

    Just keep cool. Since China “Banned” Exchanges, I think the overall Market-Cap went times 4, from the peak of about 170 Billion to almost 800. Nothing will stop this. HODL

  2. snow4me

    January 16, 2018 at 4:17 am

    what is the authors opinion on Kucoin and COSS?

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Analysis

Crypto Update: Market Surges 10% but Downtrend Still Intact

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Following two days of almost constant selling, the cryptocurrency segment experienced an oversold rally, with the major coins recovering a small part of their recent losses. The technical setup is little changed so far, with the steep short-term trendlines being intact in most cases, and with the key resistance levels towering ahead of the top altcoins.

That said, as the longer-term charts have become clearly oversold, and as the selloff accelerated with signs of forced liquidations across the board, such as huge volumes and very high correlations between the majors, a durable bottom could already be forming in the segment. The next few days will be crucial in deciding that, as a successful test of the lows, and the formation of a relatively strong leadership could set up a broader short-term trend change.

For now, our trend model remains on a sell signal in case of the top coins, with Bitcoin being the closest to a reversal from a technical perspective. Ethereum bounced off the $260 level, Ripple found support near $0.26, while BTC recovered above $6275 but been stopped by the $6500 resistance, failing to trigger an upgrade in the trend model.

ETH/USD, 4-Hour Chart Analysis

Ethereum surged higher after the US close yesterday and although it failed to add to those gains in early trading today, the coin is holding up just above the $275-$280 zone, but the steep downtrend is clearly in place. ETH has been very weak for more than a month, and especially since breaking below the $400 level last week, and more signs of strength would be needed for a trend change. Key resistance is ahead at $300, while further support below $260 is found at $235.

BTC/USD, 4-Hour Chart Analysis

On a positive note, Bitcoin joined the oversold rally after holding up well above the $6000 level and the key long-term zone near $5850. The coin also moved above declining trendline, but for now, the pattern of lower lows and lower highs is intact and the coin remains on a short-term sell signal.

BTC is clearly in the strongest technical position among the majors, and it could be the leader in a recovery, should it manage to build a bottom in the coming weeks.  Resistance above $6500 is ahead at $6750, and $7000, while further support is found between $5000 and $5100.

Correlations Remain High as Bearish Conditions Persist

XRP/USDT, 4-Hour Chart Analysis

While Ripple managed to hold up above its spike low below the strong $0.26 level and the bounce took it as high as $0.30, the steep downtrend remains intact and bulls would need further confirmation before entering new positions here. The coin is still deeply oversold from a longer-term perspective, and we expect a more durable bottom to form soon. Further resistance is ahead at $0.32, while support below $0.26 is found near $0.23.

LTC/USD, 4-Hour Chart Analysis

Looking at the bearish leaders, most of the coins are in very similar setups, as correlations are still very high, and Litecoin and Monero are still slightly more promising than the likes of Dash, Neo, and IOTA, which remain very weak from a technical standpoint. LTC is trading near its recent swing low at $56 and should the coin manage to hold above that durably, a short-term bottom could form, which would be a positive sign for the segment.

Featured image from Shutterstock

Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 317 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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Altcoins

Augur (REP) Backtracks to 16-Month Lows; Aurora (AOA) Falls Away

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Augur (REP) fell 24% throughout Tuesday on its way to a token valuation last seen in April of last year. Daily volumes have halved for the decentralized prediction market platform as today’s sell-off accelerates the process that began on August 7th with the Bitcoin drop-off.

Augur Backtracks to April 2017

In one of the most elongated price reversals in the market cap top one hundred, Augur has gone beyond mere yearly lows in its descent to the price of $15.16, recorded just a few hours ago. That’s down from the daily high of $19.96 recorded 24 hours ago – it has been nothing but descent for Augur since then.

The weekly numbers look no better, with 42% losses for the week. The month looks much better in comparison, with 46% losses over thirty days, thus showing the extent of just how bad this past week has been. A rebound is being attempted at the time of writing, as the price pushes back up to the $15.30 range.

Augur made a splash in the daily news cycle in recent weeks with its assassination markets – a feature open to be used, or created by any user on the Augur platform. The heat died down after the initial splash, which saw around $1.5 million worth of bets placed on various markets.

Sudden Influx From Korea

After seeing no more than a $3-$5 million daily volume for the entire week, Augur suddenly felt a sudden influx of $60 million on August 13th. The volume peaked overnight at $61 million before a massive reduction sent it back down to $27 million from which it continues to fall.

Right now, $23 million of that sum is coming from REP/KRW trades emanating from Bithumb – that’s 81.5% of the daily volume. The subsequent REP price on Bithumb has climbed as high as $167, although that price has been excluded from CMC’s readings.

Aurora Falls Off

The worst losses for the day have come from Aurora (AOA) which is down 45% at the time of writing. Aurora has been sinking all week long to the tune of 66% losses over seven days.

Aurora was listed on Kucoin in June, and has been hailed (by some) as (yet another) contender for Ethereum’s crown as king of the dApps. But besides a recently launched bug bounty program not much seems to be happening over at Aurora at the moment.

While it’s fun to speculate on why Aurora has taken the worst of the hit, it may have something to do with the fact that it is only available for trading on one exchange – the aforementioned Kucoin. Today on Kucoin AOA/ETH trades were the most popular; perhaps a sign that the current low Ethereum prices proved more attractive than holding onto AOA for any longer.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.4 stars on average, based on 38 rated postsGreg Thomson is a full-time crypto writer and digital nomad. He eats ICOs for breakfast and bleeds altcoins. Wherever he lays his public key is his home.




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Altcoins

The Long-Awaited Altcoin Extinction Event May Be Near

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The cryptocurrency market is undergoing a major paradigm shift as low-quality altcoins embark on a mass extinction event, according to Xapo President Ted Rogers. This view, which is shared by industry titans like Vitalik Buterin, suggests things will get a lot worse before they get better.

Mass Extinction

In a Monday tweet, Rogers warned that more than 90% of altcoins and tokens could disappear in the not-too-distant future.

“We could be in the midst of the extinction-level event for “cryptoassets” that many maximalists have predicted. 90%+ of CoinMarketCap list will disappear eventually – might as well happen now.  Meantime, lower BTC price means incredible opportunity to buy more bitcoin,” he said.

Rogers’ tweet echoes previous comments by Ethereum founder Vitalik Buterin, who believes that 90% of tokens listed on CoinMarketCap will go to zero. Buterin made the comments back in October during the historic run-up in cryptocurrency prices.

Whereas Buterin emphasized the emergence of higher quality coin offerings following a mass-scale correction, Rogers believes now is the ideal time to buy more bitcoin. The leading digital currency continues to cannibalize altcoins with its share of the total market crossing 54% on Tuesday.

At the time of writing, there were 1,833 cryptocurrencies listed on CoinMarketCap. A couple hundred were added to the website’s tracker in the last few weeks.

ICO Cash-Out?

Crypto assets have shed roughly $220 billion over the past three months and are trading at less than a quarter of their all-time highs. Although the recent meltdown originated last Tuesday when the SEC communicated its non-decision on the VanEck SolidX Bitcoin ETF, the extent of the selloff suggests there are other factors in play.

With the bulk of the declines concentrated in altcoins and tokens, many are blaming the latest rout on a large-scale cash-out of initial coin offerings (ICOs). This has direct implications on Ethereum, which is one of the most important bellwethers of the ICO market.

The ether price has experienced an unprecedented drop over the past seven days, losing more than a third of its value to trade at its lowest level in 14 months. Previously, the developer’s cryptocurrency had shown resilience in the face of broader market moves.

While ICOs have raised more than $6.6 billion this year, investors appear to be selling too early. Short holding periods are placing significant pressure on the market.

Although the path forward is paved with uncertainty, a structural shift in the ICO market will ultimately benefit cryptocurrencies. As Buterin said last October, “there are some good ideas, there are a lot of very bad ideas, and there’s a lot of very, very bad ideas, and quite a few scams as well.” Cleaning up this image is a good thing even with the accompanying pain it has produced.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 546 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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