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Cryptos Pivot Sharply Lower After Weekend Rebound; Bitcoin, Ethereum, Ripple All Down

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After a favorable weekend rally, cryptocurrencies were back on the defensive Monday as investors took profits on bitcoin, Ethereum and Ripple. Although it’s still too early to determine if we are starting the next leg of the correction, market participants are still spooked about regulatory uncertainty in South Korea, not to mention the collapse of another notable project in BitConnect.

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Bitcoin Falters

The value of bitcoin was down more than 7% at the start of Monday trading, according to Coinbase, a U.S. exchange that supports more than 13 million accounts. The BTC/USD exchange rate was lasts seen trading around $11,700 for a total market cap of $198 billion.

Bitcoin has had a difficult start to the year, with early gains wiped out over an 11-day period. Prices hit an intraday high of around $13,000 on Saturday before returning lower once more.

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Although bitcoin’s declines are part of a broader market downtrend, it may have also lost some of its luster among new traders who are opting for more affordably priced altcoins. At the time of writing, bitcoin controls roughly 35% of the cryptocurrency market.

Altcoins Retreat

Outside of bitcoin, the picture was more or less similar, as all but two of the top 100 altcoins suffered declines. Starting from the top, Ethereum declined more than 6% to $1,067, Ripple XRP fell 9% to $1.42 and Cardano ADA declined 12% to 61 cents (all figures according to CoinMarketCap.com).

Bitcoin cash, an alternative bitcoin that forked from the original blockchain last summer, was down more than 9% at $1,805.

Behold, the sea of red:

The combined market cap for all cryptocurrencies has fallen more than 7% over the last 24 hours to reach $571 billion. Earlier in the day, the selloff dragged the market cap to a low of $543 billion.

Market Fundamentals Remain Unchanged

There was no apparent catalyst for the retreat on Monday, although the abruptness of the decline points to profit-taking after a weekend of steady gains. Many investors are also alarmed by South Korea’s lukewarm outlook on regulation. The chief concern is that, without South Korea, the cryptocurrency market would lose out on significant volumes, which would undermine the valuation.

A ban on South Korean exchanges would likely impact the market short-term, but this doesn’t guarantee long-term losses. As we saw in China ,a domestic ban will simply lead investors to offshore trading accounts. If regulators want to go after them, they’d need to step up surveillance of internet activity and virtual capital flows. This is a tougher sell in a democratically elected South Korea than it is in neighboring China.

As it currently stands, the prospect of a crypto trading ban is extremely unpopular in South Korea. Governments in democratically elected countries risk severe blow-back when they implement measures that overstep their boundaries.

Overstepping is exactly what a ban would be, according to the chairman of South Korea’s Fair Trade Commission. Kim Sang-Joo was recently quoted as saying that “the e-commerce law does not have the right to close virtual currency exchanges,” and that it is “impossible in reality.”

Until authorities confirm their intention one way or another, regulation will likely remain the market’s chief concern 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 161 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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Altcoins

Crypto Correction Deepens With Bitcoin Falling Below $10,000

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Cryptocurrencies hastened their decline on Thursday, with the total market cap falling to its lowest level in over a week as bitcoin and the major altcoins backtracked.

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Fresh Selloff Hits Crypto Market

Ninety-two of the top 100 cryptocurrencies tracked by CoinMarketCap were trading lower Thursday afternoon. The combined market capitalization for all coins fell 6% to $430 billion, the lowest since Feb. 13.

Bitcoin broke below $10,000 for the first time in nearly a week, and was last seen trading at $9.891. Even with the decline, bitcoin is maintaining its bullish outlook insofar as prices hold above the technically important $9,000-$9,200 region. Although downside is expected to persist in the short term, a bounce back toward $11,000 is expected. This is confirmed by the oversold Relative Strength Index (RSI), which also points to a rebound.

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As the following chart illustrates, the value of bitcoin peaked near $11,800 earlier this week before the recent bout of profit-taking took hold.

Ethereum, the world’s no. 2 cryptocurrency by market cap, fell below $800 for the first time in almost two weeks. At the time of writing, one ether was worth around $793, which represents a decline of 4% from the previous close.

Like bitcoin, ether is also grappling with oversold levels. However, the recent low is much shallower than the one Ethereum experienced in early February when prices fell toward $550.

Meanwhile, Litecoin tumbled to a session low of $188.73, more than offsetting a 50% gain earlier in the week. At the time of writing, the coin was down 6.5% at $192.59.

Elsewhere in the market, Ripple plunged nearly 9% to $0.93, while bitcoin cash fell fell nearly 8% to $1,210.

No Immediate Catalyst for the Decline

Like previous corrective phases, there was no immediate catalyst for the market’s sharp reversal, a sign that technical traders were largely responsible for the downshift. Since peaking above $518 billion on Saturday, the crypto market has declined 17%, all but reversing the previous week’s sharp rally.

On the regulatory front, the French government just announced it will be cracking down on unregulated cryptocurrency trading. In a statement issued by Autorite des Marches Financiers (AMF), the nation’s financial market watchdog, regulators said they had noticed a growing trend in unregulated futures and derivatives trading involving cryptocurrency.

“The AMF concludes that a cash-settled cryptocurrency contract may qualify as a derivative, irrespective of the legal qualification of a cryptocurrency,” the AMF said in the statement, as reported by CCN. “As a result, online platforms which offer cryptocurrency derivatives fall within the scope of MiFID 2 and must therefore comply with the authorisation, conduct of business rules, and the EMIR trade reporting obligation to a trade repository.”

MiFID stands for Markets in Financial Instruments Directive, a harmonized regulatory framework for the European Union’s financial markets. MiFID 2 was launched earlier this year to provide more transparency on traders and go after non-compliance more aggressively.

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 161 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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Altcoins

Cryptocurrency Market Enters Corrective Phase as Majors Retreat from Recent Highs

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The cryptocurrency market declined across the board Thursday, as bitcoin, Ethereum and the rest of the major altcoins retreated from recent highs.

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Crypto Market Backpedals

After peaking above $518 billion on Saturday, the market capitalization for all cryptocurrencies has fallen to $469 billion, based on latest data from CoinMarketCap. That represents a decline of more than 9%. Trade volume across all digital assets approached $24 billion over the past 24 hours.

The latest drop in total coin value seems to have coincided with broader uptake in bitcoin, the world’s most popular cryptocurrency both in terms of market cap and trade volume. Bitcoin now accounts for more than 39% of the total market,  a near seven-point increase over last month’s lows.

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Bitcoin made a strong move above $11,000 on Wednesday, eventually hitting a three-week high of $11,329. As we wrote Wednesday, bitcoin in particular seems to be benefiting from a myriad of market forces ranging from favorable regulations to improved investor sentiment.

At the time of writing, the cryptocurrency was worth $10,901.

Other major cryptos were also down at the start of Thursday trading, with Ethereum slipping 3.6% to $864.83. Ripple’s XRP token declined 2.7% to $1.04, while bitcoin cash fell 4.3% to $1,336.50.

Even Litecoin, a currency that has witnessed a 50% surge this week, fell more than 3% to $219.43.

Paul Singer Calls Cryptocurrencies a Huge Scam

Elliot Management, a multi-billion-dollar hedge fund headed by Paul Singer, recently came out with a report calling cryptocurrencies “one of the most brilliant scams in history.” It added that “FOMO (fear of missing out) has solidly trumped WTHIT (what the hell is this??).”

In the cryptocurrency world, talk is incredibly cheap, and arguments from authority don’t hold much credence. Although Elliott dedicated three pages to cryptocurrencies, there doesn’t seem to be a strong argument against cryptocurrencies. (Calling cryptos “nothing except the marketing power of inventors, financiers and others who love the idea of buying a black box…” is not an argument.)

That being said, the fund’s comments may have resonated with speculators who are already on the fence about re-entering the market. After all, the daily news headlines play a huge role in shaping investor sentiment, regardless of whether those headlines are true. This has been demonstrated time and time again by regulatory developments in nations such as South Korea and India.

As Singer’s comments clearly show, there’s still plenty of FUD (fear, uncertainty and doubt) driving the cryptocurrency market. This is unlikely to change soon even as bitcoin and the technology that underlies it enjoys greater mainstream adoption.

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 161 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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Altcoins

Litecoin Touches New Five-Week High in Wake of Hard Fork

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litecoin

Litecoin hit fresh five-week highs Tuesday, as the coin continued to generate momentum in the wake of a hard fork that produce Litecoin Cash (LCC). Although holders of the original Litecoin were credited with the new token, project founder Charlie Lee has warned investors that LCC has nothing to do with the original cryptocurrency.

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LTC/USD Price Levels

Litecoin jumped around 9% to a session high of $244.11, putting it on track for its best close since Jan. 15. At press time, the LTC/USD exchange rate was valued at $240 for a gain of 8%. The currency has added more than 53% over the past five days, but is still trailing its year-to-date high by about 25%.

With recent gains, Litecoin has moved back into fifth place on the active list of cryptocurrencies with a market cap of $13.5 billion. The coin was previously overtaken by Cardano, a lesser known altcoin that has seen huge gains this year.

The latest rally has also been accompanied by an upsurge in trade volumes involving LTC. More than $1.1 billion worth of Litecoin trades were placed over the past 24 hours, according to data provider CoinMarketCap.

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Hard Fork Produces Litecoin Cash

Litecoin Cash came into existence on Sunday following a hard fork of the original LTC protocol at block 1,371,111. The official split occurred around 11:00 p.m. GMT. Investors who held the original Litecoin at the time of the hard fork received the new LCC at a ratio of 10:1.

The hard fork introduces bitcoin’s SHA-256 algorithm into the blockchain. The original uses Scrypt to verify transactions.

Earlier this month, Litecoin founder and chief visionary Charlie Lee warned investors that the planned hard fork was not affiliated with his company. In a Feb. 4 tweet, Lee issued the following statement from his @SatoshiLite handle:

“PSA: The Litecoin team and I are not forking Litecoin. Any forks that you hear about is a scam trying to confuse you to think it’s related to Litecoin. Don’t fall for it and definitely don’t enter your private keys or seed into their website or client. Be careful out there!”

A hard fork is generated when the original cryptocurrency splits into two, usually as a result of changes to the original blockchain’s code. Bitcoin went through two hard forks last year that produced bitcoin cash (BCH) and bitcoin gold (BTG).

As for the newly created Litecoin Cash, prices surged more than 400% following the Sunday fork. At the time of writing, LCC was valued at $7.63 for a gain of 150%. The coin peaked at $9.25.

Though largely influenced by the LCC fork, Litecoin’s recent bullish streak has also benefited from the planned launch of LitePay, a new payment processor that will help e-commerce businesses accept cryptocurrency payments. LitePay is scheduled to go live Feb. 26.

Litecoin’s popularity is also growing on the dark web and among those who are more concerned with privacy. A recent study published by Recorded Future found Litecoin to be the second-most popular cryptocurrency among criminals, behind bitcoin.

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 161 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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