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Christmas Dip: EOS, ADA, BCH Down 20-24%

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The cryptocurrency market lost 14% in the twenty-four hours leading up to christmas day, amounting to approximately $21 billion of the global market cap.

Bitcoin lost just over 10% in the process, while the major altcoins underwent the biggest corrections after more than a week of extravagant growth. EOS (EOS), Cardano (ADA) and Bitcoin Cash (BCH) all lost between 20% and 24% of their value.

EOS Price – EOS/USD

EOS sunk 20.9% from yesterday’s high of $3.10 down to Tuesday morning’s low of $2.45. EOS had previously increased 23% in value since Saturday, December 22nd, but today’s correction has wiped out that three day growth in one fell swoop.

Over 50% of daily trades came against Tether (USDT), while overall volume has fallen 50% since the start of the week, from $1.5 billion down to $1 billion.

The return to the $2.45 range places EOS block producers at roughly the break even point in terms of profitability, and is 57% higher than the thirteen-month low that was struck in mid-December.

EOS is the only major altcoin to be operating at a loss for the week, likely owing to the fact that it took its turn to pump a week or two earlier than most.

Bitcoin Cash Price – BCH/USD

The BCH coin price lost 24.2% during the dip – its larger losses in line with its larger gains earlier in the month. From Monday’s high of $205.15, BCH’s dollar value dropped to $155.40. That’s still 106% up from December 15th’s low in the $75 range.

Bitcoin Cash trade volume is down from last week’s high of $2.1 billion, to today’s total of $600 million. Over 20% of trades came from the eastern markets, shared between KRW, JPY and CNY trades.

One of the largest investors in Bitcoin Cash, the mining giant Bitmain was recently reported to be laying off 50% of its staff by the end of the week. Speculation suggests the sinking of the BCH coin price and the continued shockwaves from the recent Bitcoin Cash hardfork are the underlying causes.

Cardano Price – ADA/USD

The Coinbase speculation that kept Cardano afloat during much of early December appears to have dissipated. By Christmas morning Cardano had lost over 20% of its value since the day before, falling from $0.049282 down to $0.039260.

Over 60% of daily trades came from USDT trades – a common sign across the board following December 24th’s spike which looked like it would continue into the 25th, but failed to do so.

Ledger, the hardware wallet manufacturer, recently announced that Cardano support would be active in its products following the next firmware update, expected for January.

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 147 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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Cryptocurrencies

The Sad Story of QuadrigaCX: What it Means for Crypto

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QuadrigaCX Collapse

It has been all over the news recently and has shocked both crypto evangelists and newbies alike.

It is the seemingly unlikely story that a cryptocurrency exchange can lose access to C$190m ($143m) of its customer’s money.

How did we get here? Who is to blame? And what does this mean for the cryptocurrency industry going forward?

I will attempt to answer all of this in the post below.

What is QuadrigaCX?

For those people who have still not heard of QuadrigaCX, they were a large Canadian cryptocurrency exchange that was based in Vancouver. Prior to their collapse, they were one of the largest.

Although the exchange was not one of the most efficient or technologically advanced, it was trusted by over 100,000 Canadian crypto users as their fiat gateway of choice. They handled an impressive amount of volume for such a basic exchange.

QuadrgiCX banner

The exchange did run into some trouble and there were a few warning signs that the operation was not being run with business best practices in mind.

Indeed, they even had C$25m frozen in their CIBC bank account in the middle of 2018. The CIBC was concerned that they were unable to identify whether the funds did, in fact, belong to Quadriga. While these funds were eventually unfrozen, the exchange faced a backlog of withdrawal requests.

These problems came to a head towards the end of the year as customers started complaining about not only Fiat withdrawal requests taking forever but also crypto withdrawals being held up.

There was something going on and that Crypto canary in the coal mine was long dead.

So What Happened?

The founder and CEO of QuadrigaCX was an individual by the name of Gerald Cotten. He was quite well known in the Canadian cryptocurrency scene and started QuadrigaCX back in 2013.

Gerald was quoted several times in the press as saying that the firm employed cold storage when it came to managing their vast supplies of cryptocurrency. For those who do not know, cold storage is keeping the coins in an offline and secure state such that it is out of the reach of hackers.

Gerald Cotten Quadriga
Gerald Cotten, QuadrigaCX CEO. Image Source

When most people heard this explanation of “Cold storage” they assumed that QuadrigaCX employed a multi-signature wallet scheme with at least a 2 of 3 key authentication. This would mean that Gerald held one of the keys and two other people at Quadriga held the remaining.

This would have the benefit that even if one of those keys was lost, the other two keys could be used to unlock the funds. It is a pretty standard operating procedure at any cryptocurrency business.

There is only one real problem with this…

Gerald Cotten ran a single key authentication scheme and he was the sole holder of this key. He was also the only person who knew the password or seed words to access these wallets.

Gerald also decided to take a trip to India in December of last year while long suffering with the Crohn’s disease. While on the trip, Gerald fell ill and was admitted to hospital. Unfortunately, he passed away from complications to the disease without anyone knowing how to access the cold wallets.

He, quite literally, took the money to his grave.

What Followed

As one could expect, the news was shocking to most.

At first it hit the cryptocurrency news outlets that the company had filed for creditor protection and had gone offline. Then news got out that the CEO had died with the private keys. The reaction from some industry veterans like the Binance exchange CEO is quite telling.

How could an exchange of this size operate such an amateurish wallet management protocol? How can a CEO with over $130m in easy-to-steal cryptocurrency travel to India holding the primary key?

Indeed, there were a number of theories around whether he actually did die and whether Quadriga was facing issues prior to his death. There were also questions around the other founders at Quadriga and what part they played.

I won’t go into all of these theories for the moment, but there is one thing that is clear from this debacle: It has harmed crypto adoption.

The coverage exploded onto all of the major news outlets. Across the globe people were alerted to the fact that an unregulated cryptocurrency exchange does not really have government mandated cold storage protocols.

For those who were thinking of investing in cryptocurrency, they will most likely think twice. For those that were convinced that cryptocurrency was a “scam” now have further fodder to play with.

Not your keys, not your crypto?

While most crypto users know the dangers of leaving funds on the exchange, there were many who thought that QuadrigaCX could be trusted. There were some who merely looked at an opportunity to move funds and were caught in the mess.

As more and more victims start to come forward with the stories of their losses, it is sure to further impact on the mindset of those considering an investment.

What Will Happen?

Given that QuadrigaCX was unregulated, it is hard to see exactly how the Canadian government agencies will get involved.

The British Columbia Securities Commission (BCSC) says that it falls outside of their oversight because the firm did not sell registered securities. The Ontario Securities Commission says they are looking into it but there is no clarity on exactly what they could do to recover funds.

OSC Commission Logo
Image Source

In terms of any potential for investigation by the Federal Police, the exchange says that they are not the subject of any inquiries by the RCMP.

Indeed, this legal vacuum has created a few issues for those who lost funds on the exchange. There are a number of civil claims that have opened up against QuadrigaCX but given the creditor protection granted to them, it will be an uphill battle.

Some of the most important things that may come out of this debacle is what it could do for long-term common-sense exchange regulation.

Potential Regulation?

While regulation is often considered a dirty word to many of crypto’s most ardent supporters, it could have helped prevent the circumstances that led to this.

If there was more oversight into the actual operations at the exchange then it is unlikely that the CEO would have been so blasé when it comes to the management of the company. There would have been more transparency as to their funds and reserves.

There would have been penalties that came from non-compliance and there would have been clearly defined protocol to follow when the CEO died.

Moreover, if there was any sort of suspicious business going on at the exchange prior to its collapse, then a governmental regulator would have been able to spot it and take corrective action before users got harmed.

Most crypto maximalists like to think that they do not need the government to look after them in the wild west markets. However, if you were merely caught up in the QuadrigaCX mess by mere circumstance, your view would likely change pretty quickly.

Silver Lining to Crypto Clouds

While it does appear as if this is bad for the crypto industry in the short term, it could herald in some much-needed change to the industry in the long term.

Common sense regulations will likely clean up the sector, remove the numerous “questionable” exchanges and other opaque entities that operate in the space. These could also be coupled with other regulations that are being proposed in the STO space for example.

If the regulators are able to create a sense of control over a sometimes-lawless industry then it is likely to assuage lingering fears of potential users. There are millions of users who are sitting on the fence and are looking for confirmation to jump into the crypto waters.

This is actually something that has happened in Japan in the fallout from the Mt Gox. hack. The regulators there set out to make a number of laws around the registration of a crypto exchange. The result is a booming cryptocurrency industry.

As it relates to the current Quadriga users, one can only hope that they are able to recover some funds. The civil lawsuits could start pursuing the operators or they could attempt to recover funds from Gerald Cotton’s estate.

There are also quite a bit of funds that are tied up with a few payment processors. If the courts are able to prove that these funds are Quadriga’s, they can be recovered.

This story will no doubt go down in the annals of Bitcoin history similar to that of Mt Gox et al. And, something tells me that just like Gox, we have only heard the beginning of it…

Featured Image via Fotolia and QuadrigaCX

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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5 stars on average, based on 10 rated postsNic is an ex Investment Banker and current crypto enthusiast. When he is not sitting behind six screens trading Bitcoin, he is maintaining his numerous mining rigs. Twitter: @nicrypto




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Ethereum Price Analysis: ETH/USD Using Recent Bottom as Launch Pad for Potential Rocket Moves

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  • ETH/USD has gained a big 38% over the past 6 days now.
  • The key thing to note is bulls have more to deal with in this run higher, in comparison to 2017.

ETH/USD is on one serious mission to recovery. The bulls have been surging over the past six days now, minus the small pullback on Wednesday. It does very much appear, that the bottom has been observed across the cryptocurrency market, given the sheer power and momentum behind the current moves.

The Downfall of ETH/USD

ETH/USD weekly chart. The price had been falling for five consecutive weeks.

As a brief recap, the price has been falling throughout the year of 2018. Downside pressure did pick up some serious pace and became very devastating in November. ETH/USD fell for five consecutive weeks, accumulating big chunky losses. This was the longest run to the downside seen since October-November 2016.

The price was seen down around 95% from the peak high in January of this year. Just on the 7th December, the lowest level since May 2017, at $83. ETH/USD bears forced a retest of this on the 15th. This sparked a revival in the market bulls. Leading the price into its current run observed, having gained 38% at the time of writing, since that bounce.

Upside Targets

ETH/USD daily chart. Bulls have surged 38% in the past 6 days of trading.

The next potential barrier of obstruction for the bulls is eyed at around $130, an area the price consolidated for a brief period at the back end of November – early December before then resuming its move lower. Outside of this, another small barrier seen within the $170 area, last traded here mid-November during the midst of the fall.

Other than the above-mentioned, it could be a very fast return for ETH/USD in firmly reclaiming the psychological $200 mark. Between September right up to November, the price was stuck within a very narrow range. This may prove to be the sticky challenge for the bulls, depending on momentum levels.

Furthermore, eyes will then be on $300. The key thing to note is that during the huge bull run of 2017, there was little in the way of historical levels. This helped in providing a clean run to the north, at heights that were reached. However now, during this bearish trend, levels of resistance have been formed, which will be new to the bulls in tackling.

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 126 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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Crypto Update: Bear Market Lows in Jeopardy After Latest Failed Bounce

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The cryptocurrency segment switched directions yet again, as, after a weak bounce on Wednesday, the major coins are headed back towards their recent bear market lows today. While the losses are not significant, for now, given the bearish long-term picture and the vicinity of the lows, another leg lower in the downtrend could soon begin, despite the deeply oversold long-term momentum readings.

The majors are all in the red amid the broad selloff and only a few of the battered altcoins are showing some relative strength in the face of the apparent selling pressure. The total value of the market is back below $110 billion, and a dip below the $100 billion mark is possible as soon as the coming days, with Bitcoin being among the weakest top coins in the past few days.

Volatility has been steadily decreasing ever since last week’s breakdown, but we expect trading activity to pick up somewhat ahead of the weekend, and traders should remain cautious here given the still broadly negative technicals.

BTC/USD, 4-Hour Chart Analysis

Bitcoin is trading just above its recent lows despite yesterday’s rally attempt, and the coin is showing relative weakness hinting on an imminent test of the lows. That said, with the long-term momentum readings clearly being oversold, we could still be in for a larger scale bounce in the coming weeks, but traders should wait for signs of short-term strength before entering new positions.

Our trend model remains on sell signals on both time-frames, with strong resistance levels zones ahead near $3600 and between $4000 and $4050, and with key long-term support found near the $3000 level.

ETH/USD, 4-Hour Chart Analysis

Ethereum is still stuck below the key $95-$100 zone as yesterday’s bounce faded but the coin is trading above its bear market low, performing in line with Bitcoin and the majority of the segment. ETH is still in short- and long-term downtrends, and our trend model is on sell signals on both time-frames as well, despite eh oversold long-term picture.

Odds still favor a move towards the next key support zone between $73 and $75, and traders and investors shouldn’t enter positions here, with further strong resistance zones ahead near $120 and $130.

Altcoins Drift Lower Across the Board

IOTA/USD, 4-Hour Chart Analysis

We are still not seeing signs of meaningful relative strength even among the smaller altcoins, as although some of the most oversold currencies are, in fact, holding up well above their recent lows. IOTA is still a prime example of the long-term weakness, as it got stuck below the resistance zone surrounding the $0.24 price level despite the recent bounce attempts, while also remaining in a clear broader downtrend. For now, the prior low just above $0.20 is safe, but new lows are still likely in the coming weeks.

XRP/USDT, 4-Hour Chart Analysis

Ripple has been trading with very low volatility in the last couple of days, hovering around the $0.30 level. The coin failed to show relative strength amid the bounce attempts, and break below last week’s lows and a test of the bear market low near $0.26 still seems likely, with the sell signals being in place in our trend model on both time-frames.  XRP faces strong resistance near $0.32, $0.3550, and $0.3750, while primary support is found at $0.28

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 470 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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