Bitcoin Volatility, Tron Founder Debacle Highlight Active Week for Crypto

Bitcoin’s long-winded correction from 17-month highs continued this week, with the leading digital currency dropping another 5% against the dollar. As one would expect by now, altcoins and tokens quickly followed suit, with most of the majors posting weekly losses.

The downtrend had a few notable exceptions as EOS, Cardano, Tezos and Ontology posted sizable weekly gains. As a result, bitcoin’s dominance rate fell to its lowest level in over two weeks.

Aside from technical trading, the cryptocurrency market this week was dominated by bizarre headlines concerning Justin Sun, who abruptly suspended his scheduled lunch with billionaire investor Warren Buffett. As the saga unfolds, it seems like Buffett is the least of Sun’s worries.

Bitcoin Volatility on the Rise

Volatility swept the cryptocurrency market this week, knocking bitcoin back below $10,000 and dragging most of the major altcoins into negative territory. Although volatility is nothing new for bitcoin, the intensity of the price fluctuations has increased sharply over the past month.

Bitcoin’s 30-day volatility index, which measures the degree to which BTC fluctuates over that period, peaked at 6.94% on July 21. That’s the highest reading since February 2018. The volatility tracker has moderated somewhat, but remains well above levels seen during the depths of crypto winter all the way back in November-December.

Bitcoin volatility: A double-edged sword for crypto traders. | Source: bitvol.info

As of Friday, bitcoin’s price was down more than 5% for the week to trade at $9,812, according to CoinMarketCap. The cryptocurrency is down more than 25% from its most recent high of $13,200. The price has corrected 29% from last month’s peak of around $13,900.

BTC/USD: Weekly chart. | Source: CoinMarketCap.

Bitcoin is still trading well above its most recent swing low of around $9,049 set on July 17.

Altcoins With the Most Shine

Taken as a whole, the cryptocurrency market shed $10 billion in combined market cap this week. Bitcoin, Litecoin, Stellar, Tron and Monero were among the most notable decliners. The likes of Ethereum, XRP and Binance Coin broke even for the week.

On the opposite side of the ledger, EOS headed for a weekly gain of 16.7%, bringing its market cap back above $4 billion. There was no apparent catalyst for the rally, although Hacked speculated earlier this week that bearish sentiment toward EOS was beginning to fade. It also helps that EOS was extremely oversold for long stretches in July.

At least check, EOS was worth $4.65.

EOS/USD: Weekly chart. | Source: CoinMarketCap.

Cardano’s ADA also headed for a weekly gain after testing a critical support zone. The eleventh largest cryptocurrency was last seen trading at $0.0608.

ADA/USD: Weekly chart. | Source: CoinMarketCap.

Bitcoin SV shot up 17.1% this week to trade at $161.10. It ranks ninth among active blockchains.

Looking further down the market-cap rankings, Tezos rose 7.2% this week to retake the $1.00 handle. Ontology climbed 15.5% to $1.07.

Justin Sun: The Saga Continues

Tron CEO Justin Sun was in the spotlight this week after he abruptly cancelled a lunch-date with billionaire investor Warren Buffett. The Tron Foundation tweeted July 22 that the company’s founder was battling kidney stones, forcing him to reschedule the planned meeting.

As news of Sun’s apparent ailment went public, rumors began to circulate that it was the Chinese government and not kidney stones that prevented him from meeting the Oracle of Omaha.

China’s 21st Century Business Herald claims that the Tron founder was being investigated for several charges, including illegal fundraising and money laundering. This led Caixin to speculate that the Chinese government had barred Sun from leaving the country.

China’s Sina Finance also claimed that the Tron founder was barred from leaving China – not because of an investigation, but because his upcoming meeting with Buffett had put him on regulators’ watch list.

According to The Block, Sun has been stuck in San Francisco the whole time. He chose to scrap the meeting with Buffett to avoid drawing any further attention to himself. If that’s the case, Chinese authorities would put him on the no-exit list upon his return.

As the dust was settling, CCN reported that Bram Cohen, the creator of BitTorrent, had accused Sun of failing to make a scheduled payment for the acquisition of the file-sharing network. Cohen speculated that Sun might be “hard up for cash.”

The Week Ahead and Things to Consider

As the Justin Sun saga unfolds, investors can expect Tron to see significant volatility in the short term. As of Thursday, TRX was in danger of giving back all of its 2019 gains.

For the cryptocurrency market as a whole, the picture is more favorable. Technical analysis of the Ethereum-Bitcoin cross suggests that bullish rotation into altcoins is underway. Although it’s still too early to declare ‘altcoin season,’ the outlook has clearly improved. As Hacked reported last month, the ETH/BTC exchange rate is one of the best proxies for altcoin demand.

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. Charts via CoinMarketCap. 

Author:
Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi