Crypto Downturn Shows Signs of Bottoming Ahead of Pivotal Week

Cryptocurrencies drifted lower on Sunday, with leading altcoins extending a recent pullback from overbought levels ahead of what’s expected to be an active week for the market. The upcoming bitcoin cash hard fork, timelines for Ethereum 2.0 and increased federal scrutiny are likely to dominate the headlines.

Market Update

A majority of cryptoassets in the top-20 reported losses on Sunday, though downside pressure was relatively subdued as investors turned their attention to the news ticker. The combined crypto market cap bottomed near $210 billion on Sunday and was last seen hovering north of $212.6 billion.

Bitcoin consolidated just above $6,400 after seeing little upside during the weekend. Ethereum is down 0.5% at $211. Losses in XRP were contained to just 0.3% and the currency was last trading at $0.5057. Bitcoin cash fell 3.9% to $533, as prices continued to retreat from last week’s exorbitant highs.

On the opposite side of the spectrum, Stellar Lumens booked a solid session, gaining 5.5% to $0.2739, ahead of a large airdrop of XLM tokens by crypto wallet platform Blockchain. Cardano also rose 1.9% on Coinbase listing speculation. ADA is currently trading at $0.0765.

Market-Moving Headlines

Crypto traders are keeping tabs on several high-profile developments that could influence the market’s performance in the near term.

Bitcoin Cash Hard Fork

Bitcoin cash’s keenly awaited upgrade is scheduled to take place Nov. 15, placing markets on high alert for excess volatility. While most movers and shakers are expected to back the Bitcoin ABC implementation,  a contingency led by Craig Steven Wright is planning to part ways via Bitcoin SV.

As Hacked recently reported, BitPay has become the latest entity to back Bitcoin ABC. Crypto exchanges Binance and Coinbase, which also back Bitcoin ABC, will implement mandatory downtime leading up to the hard fork. As we saw last week, BCH price volatility could influence the broader market.

Ethereum Development Timeline

Ethereum’s core developers have laid out a new timeline for the much anticipated Constantinople upgrade. The timeline was communicated via meeting minutes of the latest developer meeting that took place on Friday. Those minutes, which are available on Github, show two possible dates for the proposed implementation of Constantinople: Jan. 16, 2019 and Jan. 12. The Jan. 16 date is the one preferred by most core developers.

The core developers also provided an update on the so-called difficulty bomb, which refers to the ever increasing difficulty level of the mining algorithm used to reward miners. According to the minutes, block times will begin increasing in January, with key milestones anticipated for April at the earliest.

SEC Crackdown

Crypto markets are on high alert after the founder of EtherDelta was charged by the U.S. Securities and Exchange Commission (SEC) for operating an unregistered securities platform. Zachary Coburn, the executive in question, has agreed to pay $388,000 in penalties, disgorgement charges and prejudgement interest.

The decision rattled investor confidence because it was the first time the securities regulator took action against a decentralized exchange. This likely stems from the sheer quantity of ERC-20 tokens currently available on EtherDelta. The SEC has stated before that it makes no distinction between security tokens and those that claim to have a “utility” function.

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.

Chief Editor to and Contributor to, 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