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Bitcoin Caps Off Worst Month in Three Years as Losses Mount

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Bitcoin steadied above $10,000 on Wednesday, but not before closing out its worth monthly performance since 2015.

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January Woes

The world’s largest digital currency by trade and market cap has declined 29% since New Year’s Eve. After adding more than $3,000 in the first week of January, bitcoin posted steady losses for the rest of the month, eventually bottoming near $9,600.

Bitcoin routinely under performs in January, having only one positive result during the month since 2013. When evaluated monthly, the other major drop for the cryptocurrency occurred in February 2014 when it lost 36%, according to CNBC.

The intense selloff hasn’t been limited to just bitcoin. Virtually every major cryptocurrency has declined sharply in recent weeks amid closer regulatory scrutiny, cyber attacks and U.S. federal probes.

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The global cryptocurrency market declined roughly 17% for the month of January. That represents a monetary loss of more than $100 billion.

At the time of writing, the total market cap for all cryptocurrencies is roughly $506 billion. The market peaked above $830 billion in early January.

Strong Headwinds

Bitcoin has faced multiple setbacks since peaking near $20,000 in December. The coin lost market share during an early January rally that took the global cryptocurrency market to record valuations. It has also been at the forefront of a massive correction since the middle of January as South Korean regulators debated new restrictions on digital assets.

By the end of January, bitcoin’s market cap had retreated 50% from its all-time high. Over the past month, its share of the cryptocurrency market fell from around 39% to roughly 33%. A mere 12 months ago, bitcoin was more than 85% of the market.

Although BTC remains the undisputed leader in terms of volume, Ethereum and Ripple turned over more than $100 billion each over the last 31 days. In the case of Ethereum, monthly trade volumes hit $150 billion, according to data provider CoinMarketCap.

Bitcoin’s most recent drop below $10,000 exposed the digital currency to further downside risks, with traders eyeing fresh support levels near January lows.

Forecasters say bitcoin enthusiasts have a lot to be optimistic about, as the digital currency continues to attract retail investment and institutional interest. However, scalability issues and regulatory uncertainty present considerable risk over the medium term. Although many of these issues are expected to be resolved, volatility will be a staple of the market for the foreseeable future.

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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4.5 stars on average, based on 165 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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Analysis

Technical Analysis: Majors Stage Rally but Strong Levels Still Ahead

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The cryptocurrency segment has recovered from a broad correction today in early trading, with the most valuable coins all turning into green during the session, despite the bearish start to the overnight session. With bottom-to-top gains of up to 15%, the rally helped in easing the worries of bulls, especially in the case of the relatively weaker coins.

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Bitcoin and most of the largest altcoins remained stable during the selloff, and BTC recaptured the $10,000 level quickly after trading as low as $9600 overnight. The initial rally topped out near $10,400, and the coin is trading back near the $10,000 level, as the bullish momentum faded away somewhat.

BTC/USD, 4-Hour Chart Analysis

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That said, we expect the uptrend to continue even if the correction could still carry Bitcoin lower. Further strong support is found between $9000 and $9200, while targets are ahead at $11,300, $13,000, and $14,250.

ETH/USD, 4-Hour Chart Analysis

Ethereum showed strength during the bounce again after yesterday, together with the early leaders of the rally, and although the coin dipped below the $845 level in the second half of the session, the signs remain positive for bulls. Support levels are now found at $780, $740, $625 and $575, while resistance is ahead near $910 and $1000.

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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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4.7 stars on average, based on 115 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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Analysis

Crypto Update: Encouraging Bounce before the Weekend

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The correction that started out in the major lagging altcoins and spread to the leaders of the market yesterday is weakening, with a nice rally today in early trading in most of the majors.  Although the segment is not out of the woods just yet, the bullish signs which have been present ever since the lows three weeks ago still persist.

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Bitcoin stayed clear of the key $9000-$9200 support zone, for now at least, which would be an ideal bottom for the correction, but as we noted long-term investors should accumulate the coin during the correction, as the short-term momentum is already back to neutral. The $10,000 level is still in the focus, while the next major resistance is found at $11,300 and the prior rally high near $11,750 is also ahead as an obstacle.

BTC/USD, 4-Hour Chart Analysis

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The early leaders of the rally, Litecoin and Ethereum Classic are once again showing strength and that could signal that the next leg higher already started. That said, with several coins still stuck in broader downtrends, investors should still expect a bumpy road, with the occasional volatile sell-off.

Litecoin got very close to the $180 support that we have been monitoring throughout the correction, but it quickly bounced above the $200 level again, as the broad bounce started after testing the previously dominant declining trendline. So far, the price action in the coin is consistent with a new uptrend and we still expect LTC to lead the market higher.

LTC/USD, 4-Hour Chart Analysis

Ethereum Showing Positive Signs Again

ETH/USD, 4-Hour Chart Analysis

After yesterday’s early signs of relative strength, the second largest coin is now clearly showing evidence of accumulation, as it quickly recovered above the $845 level following the selloff after the US close. The coin established a new support near $780, and as the MACD is close to providing a bullish cross, it might signal the bottom of the correction.

Despite the bullish price action across the board, even in the recently lagging XRP and IOTA, the correction could still continue, but we still advise traders and investors to look for entry points as we expect the recovery to continue, although traders should still use smaller positions in the relatively weaker coins.

Stay tuned for our detailed technical analysis later on today.

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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4.7 stars on average, based on 115 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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Analysis

Technical Analysis: Correction Continues but Coins Remain Stable

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It’s been another mixed session for cryptocurrency investors as judging by only the price action, the segment suffered losses across the board, but comparing the current sell-off to the January plunge reveals that the majors are much more resilient this time around.

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The largest digital currencies are holding on to most of the gains of the recent weeks, and the price action near the crucial support zones is also encouraging. With all that said, the correction is not over yet, and further losses are still in the cards, but barring a substantial change in price action, the coins will likely continue the rally.

BTC/USD, 4-Hour Chart Analysis

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Bitcoin has been trading around the key $10,000 level all day long, and, so far, a clear break-down has been averted. The short-term momentum indicators are now in neutral territory regarding the most valuable coin, and that could mean that a bottom is close, and investors should already add to their holdings here. Further strong support is found between $9000 and $9200, while targets are ahead at $11,300, $13,000, and $14,250.

XMR/USDT, 4-Hour Chart Analysis

Correlation between the majors has increased during the sell-off, but there are still clear outperformers and laggards, adding to the bullish case. Monero remains among the strongest coins from a technical perspective, trading right at the lower boundary of the bullish consolidation pattern, with the $280 price level holding up for now. The coin faces strong resistance near $300 and $335, but we expect the uptrend to continue with the next target being ahead at $400, while further support is found at $240.

(more…)

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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4.7 stars on average, based on 115 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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