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Wall Street Strikes Fear? Bitcoin’s Sudden Price Drop

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Bitcoin’s Saturday performance has seen $500 chopped off the coin’s value, with 6.8% losses over twenty-four hours, and a very concentrated dip occurring this afternoon at 13:00 UTC, when just over 5% of BTC’s value disappeared.

Sudden Price Drop

This afternoon’s plunge came suddenly, with the coin price sinking from $7,427 to $7,030 in the space of just over three hours. The majority of the losses had been incurred by around 15:30 UTC, just over thirty minutes ago at the time of writing. The price has since begin to level off, but volumes are currently down on this time yesterday and the movement doesn’t look to be over.

Looking at Bitcoin’s numbers for the week, it has been a story of stepped declines since July 31st. As you can see from the chart below, a new dip has occurred every two days since then, with today’s price marking a return to levels not seen since mid-July, just before BTC went on its mini-bull run of recent days.

Based on the current price, Bitcoin is down 14% for the week, and yet based on the monthly opening price of $6,710 the coin is still up 5% over thirty days. Ultimately, the bulk of July’s gains have been wiped out, and those who thought BTC was free and clear will now be tightening their belts for the long haul.

Wall Street Strikes Fear?

Throughout the day news has started to circulate of the negative predictions forecasted by some big hitters in New York. Goldman Sachs in particular published an mid-year economic outlook report, in the pages of which they said they expect Bitcoin to lose a lot more of its value over the year, and that we were still nowhere near the lows which are yet to come.

“Our view that cryptocurrencies would not retain value in their current incarnation remains intact and, in fact, has been borne out much sooner than we expected. We expect further declines in the future given our view that these cryptocurrencies do not fulfill any of the three traditional roles of a currency: they are neither a medium of exchange, nor a unit of measurement, nor a store of value.”

The story has been picked up by various news outlets throughout the day. Now we’re seeing accompanying reports from Yahoo Finance compounding the negativity, with statements from a NYSE trader declaring Bitcoin unsuitable for the functions which it claims to serve. In the video piece, Alan Valdes said:

“How do you protect your Bitcoin? These wallets seems very iffy at best. If someone hacks into them, it’s like losing cash, you are out. So, I think Bitcoin [has] a long way to go for the average person to get involved. Maybe in some emerging markets you’ll see it take hold with that currency could be a little stronger, it might work. But I think here for trade, I mean, we had at $20,000. Will it get there again? Anything is possible. But I’m not so sure.”

Rough times for Bitcoin… with even rougher ahead?

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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4.4 stars on average, based on 37 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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  1. rauldacool

    August 4, 2018 at 8:21 pm

    I’m not sure, if this is the right place for feedback, but in my opinion Hacked.com recently does not stand up to it’s monthly costs from a content-perspective.

    – Articles are often just copies of other articles, which can be found on many other free crypto websites.
    – Trade recommendations / analysis are average at best and are found on tradingview equally.
    – Since the Workplace was deleted, the content and community has never reached – not even close – the same quality on the ccn network
    – Trading experiments (or classes as once announced by Jonas) are not even a part of this website anymore, instead you opened up a “money makers course” which Is priced at 3000 USD (lol)

    I’m sorry to say, but to me it seems as if the only benefit of the platform recently is to fill your guys pockets. Articles like the one above, which just take up and repeat the FUD information with a closing line like “Rough times for Bitcoin… with even rougher ahead?” do simply no add any value to my investments. I’ve cancelled my membership after almost a year.

    Regards,
    Raoul

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Altcoins

Crypto Psycho: Fear Could Be Our BFF

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Crypto prices continue to confuse.  For all the logic related to supply and demand, the reality these days continues to be that prices are being determined by emotion.  

The fundamental news these days is mixed. For example, take todays mention of Bitmain, one of the most valuable cryptocurrency companies, is expecting a September filing of an IPO for as much as $18 billion. That would eclipse even Facebook back in 2012.  The buzz swirling around Bitmain is about more than just crypto. Even so, $18 billion makes a loud and positive statement about investor interest.

On the other side of the digital coin, we have declarations from guys like Ken Bianco, who happens to be part of the US Treasury Office of Terrorism and Financial Intelligence.  Last week he spoke in threatening terms of how the US intends to enforce its AML/KYC regulations virtually everywhere in the world. If this sounds a little bit like an infamous German gentleman with an odd looking mustache, you have your history right.

In between these two extremes, of course, there has been lots of information each day that correlates closely with theoretical supply and demand for crypto, none of which has made a bit of difference as crypto prices continue to tumble.

Nevertheless, an objective point of view holds that there is a disconnect between what is happening in reality and crypto prices.

So unlike last year when prices were rising for no other reason than the fear of missing out (FOMO), today they are falling in the face of the fear of losing all (FOLA).  Maybe it’s fear that is the key to the future.

FOLA Could Be Our Friend

On many occasions we have mentioned how important traditional investors have used relative value.  We continue to believe that global stock and bond markets are overvalued using metrics like price earnings ratios and other financial measures.  While quantitatively speaking, this point is absolutely right, it hasn’t resonated. Since the beginning of the year, for example, investors in the Nasdaq Composite has enjoyed a 13% gain.

This gain comes even though Facebook, the fourth biggest stock in the cap-weighted Nasdaq Composite, has been a dud.  By comparison, over the exact time last year investors in the Nasdaq Composite experienced a 12% gain on the way to a bountiful 25% full year return. Overall, these folks have had very little reason to be unhappy, or fearful.

Tipping Point Could Come From Trump

Credit Datatrek for keeping a thumb on the pulse of the outside world.  Here are some insights from a recent poll on the fears of institutional money managers.  The two most important issues in late March were: unpredictable political events in Washington DC and Trade/tariff disagreements between the US and China.  Some 70% of respondents were very concerned or somewhat concerned about these issues.

Since then, things have only become more critical.  Washington’s confrontational foreign relations strategy is shaking global currency exchange markets.  In the last two weeks the Russian Ruble has lost 12% against the US Dollar. At the same time the US Dollar has increased over 40% against the Turkish Lira.  

While it can be argued that Turkey is of little importance to the global monetary system, Russia is not. Turkey plays a key role in the Middle East and any instability in that area is enough to strike investor fear that is reflected in energy, inflation and currency markets.

In earlier times, this scenario pointed investors in the direction of gold.  This is not happening. At the time of this writing, gold had just broken through $1,200 having fallen 8% this year.  In the face of the Turkish situation, this signals a loss in confidence for gold in a region of the world with a historic close connection to the metal.

Only Theory So Far  

Now if a strong correction were to take place in stock prices or an equally strong rally in crypto, there would be evidence of investors taking advantage of the relative value here. Unfortunately, at this moment that is not taking place. Bitcoin prices are down marginally but sellers continue to pound most altcoins. Until this changes, crypto prices are being driven down by FOLA.

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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4.4 stars on average, based on 95 rated postsJames Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.




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Analysis

Crypto Update: Ethereum Plunges Below $300 as Bitcoin Fails at $6500

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Despite a weak bounce during the weekend, the cryptocurrency segment continues to trade under heavy selling pressure, with the top altcoins till underperforming Bitcoin. Ethereum is the most obvious laggard, and it fell below the $300 level today, hitting yet another 9-month low and extending the structural bear market with another swing low.

Almost all of the majors are below or near their recent lows, but Bitcoin continues to show relative strength, and a few of the recently weak coins, notably Monero and Litecoin, are trading slightly above their swing lows. The other most important bearish currency, Ripple is also trading at new lows, and with that in mind, we remain defensive on the coins, as despite the deeply oversold momentum readings, there is still no sign of a developing leadership in the segment.

ETH/USD, 4-Hour Chart Analysis

All eyes are still on Ethereum, as the second largest coin is pushed lower relentlessly ever since its break-down below the $400 level last week. The coin continued to lead the way lower so far today, and with the break below the $300 level, the market cap of Ethereum is now just $30 billion, while the total value of the market is close to $200 billion again. The coin is now just above the $275-$280 support zone and it remains on sell signals on both time-frames, with resistance ahead at $335 and $360.

BTC/USD, 4-Hour Chart Analysis

With still no signs of even a short-term bottom in altcoins, Bitcoin is still the only hope for crypto bulls, as the coin continues to clearly hold above the crucial $5850 level. BTC is also trading above the weekend lows, even though it failed at the $6500 level during the bounce and it is now back below the $6275 support.

While the short-term downtrend is still intact and the sell signal is in place, today’s strength could be a start of a trend change, should the coin maintain its resilience. Further resistance is still ahead at $6750 and $7000, while initial support is at $6000, with the next major support zone below $5850 found between $5000 and $5100.

Sellers Still in Control but First Signs of Exhaustion Appear

LTC/USD, 4-Hour Chart Analysis

Although the bearish trend in altcoins is still very strong, and most of the relatively weak majors are also confirming today’s break-down, Litecoin is slightly outperforming the likes of Dash, NEO, and IOTA. While the current relative stability is still no reason to buy the coin, and the short-term sell signal remains intact, further signs of strength would be positive for the whole segment.

XRP/USDT, 4-Hour Chart Analysis

Ripple’s technical situation is still dire, as the coin failed to hold up above $0.30, with no signs of a bottom despite the strong support in the $0.30-$0.32 zone, and the deeply oversold momentum readings. Also today, XRP plunged below its previous low, and it’s now trading just above $0.28. The next major support zone is found near $0.26, and for the sell signals on both time-frames are intact.

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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4.6 stars on average, based on 316 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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Bitcoin

Turkish Lira’s Volatility Rivals that of the Bitcoin Price: Report

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If you think the bitcoin price has taken you on a wild ride of late, it could be worse. The Turkish lira remains in freefall, rocking not only the local economy but spilling over into vulnerable emerging markets as well. In fact, the short-term volatility in the lira versus the U.S. dollar has surpassed that of leading cryptocurrency bitcoin, a report in Bloomberg pointed out.

Source: Bloomberg

Indeed, based on 10-day performance in the lira versus the U.S. dollar, volatility has exceeded that of bitcoin, Bloomberg reported. A Turkish constitutional referendum last year inspired similarly wild swings. Meanwhile, the lira and bitcoin are neck-and-neck for year-to-date declines at 45% and 55%, respectively.

Beating out bitcoin on volatility is not a coveted title, especially when you consider bitcoin’s ride since it’s December 2017 peak, since which time it’s shed more than half of its value. This summer alone, the bitcoin price has gone from approximately $5,800 in June to more than $8,000 in July only to fall back below the $7,000 shortly thereafter to almost $6,700 today. It has fallen through support levels like a hot knife through butter, but the plight of the Turkish lira is arguably worse. Turkey is facing a crisis of confidence in its currency, which is making other forms of payment, most notably bitcoin, more attractive.

Cryptocurrency a Refuge

So what’s a Turkish investor to do? Increasingly they are seeking refuge in cryptocurrencies, where the environment remains relatively friendly compared to other jurisdictions for crypto trading, say India. Bitcoin trading volumes that are up by double-digit percentages across local exchanges Koinim, BTCTurk and Paribu, as reported by Forbes. BTC trading volume on Turkey’s largest crypto exchange Koinim is up more than 60%. Over on BTCTurk, volumes are up by more than one-third and on Paribu it’s reportedly up 100%.

Meanwhile, the trade tensions between the Trump administration and Turkey surrounding steel and aluminum sanctions and tariffs only seems to be escalating, which could push investors and consumers alike further into crypto.

Taken the South American country of Venezuela, for instance. Dash Core has been thrust into the spotlight there as the poverty-fueled Venezuelan economy has been reeling from hyperinflation, as evidenced by hundreds of merchants now accepting the No. 14 cryptocurrency by market cap as a payment method. The same could happen in Turkey, though it’s unclear which cryptocurrency would be the top choice. Dash put boots on the ground in Venezuela to make integration and adoption more seamless and their efforts appear to be working.

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 35 rated postsGerelyn has been covering ICOs and the cryptocurrency market since mid-2017. She's also reported on fintech more broadly in addition to asset management, having previously specialized in institutional investing. She owns some BTC and ETH.




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