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Week in Review

Week in Review: Bitcoin’s Improbable Surge Continues, Dollar Posts Best Week This Year and Stocks Hit New Records

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Bitcoin has been the talk of the town lately, as volumes spiked and prices surged in anticipation of the CBOE futures contract. Altcoins also rose sharply before reversing course later in the week.

Stocks also rose this week, with Wall Street returning to record territory. Meanwhile, the U.S. dollar index also put up strong gains on upbeat domestic data and uncertainty overseas.

Bitcoin’s Earth-Shattering Volumes

BTC/USD went through the roof this week, as prices crossed $19,500 in an incredible show of strength. At its peak, the world’s no. 1 cryptocurrency was valued at roughly $310 billion.

By the end of the week, bitcoin was trading at roughly $16,000 for a five-day gain of $5,000.

Bitcoin’s 24-hour transaction volumes reached a staggering $29 billion Thursday, a five-fold increase over month-ago levels. On Friday, daily volumes reached $21 billion, with BitMEX, Bithumb and Bitfinex accounting for more than a third of the turnover.

Altcoins also surged this week, bringing the total market cap to $452 billion. The global cryptocurrency market shed $50 billion on Friday in a broad correction before prices stabilized within $10 billion of the record high.

CBOE Announces Bitcoin Futures Launch Date

Underpinning the latest rally in cryptos was CBOE’s surprise announcement that it will begin offering bitcoin futures this Sunday. The new contract, which will be traded under the ticker symbol “XBT,” will be offered free through December.

“Given the unprecedented interest in bitcoin, it’s vital we provide clients the trading tools to help them express their views and hedge their exposure,” CBOE chairman and CEO Ed Tilly said.

By launching its derivatives contract Sunday, CBOE becomes the first major exchange to venture into bitcoin. CME Group is expected to launch its own bitcoin futures contract Dec. 18.

Stocks Return to Record Territory

Stocks returned to record highs this week, with the S&P 500 Index gaining 0.6% to close at 2,651.50. Ten of 11 sectors contributed to the rally, with telecom, healthcare and energy leading the way higher. Energy experienced a broad retreat earlier in the week along with information technology stocks.

The Dow Jones Industrial Average added 117.68 points, or 0.5%, to close at 24,329.16 on Friday. Meanwhile, the technology-heavy Nasdaq Composite Index gained 0.4% to 6,840.08.

A measure of 30-day volatility known as the CBOE VIX declined for four straight days on Friday to close at its lowest level in over a month. The so-called “fear index” settled at 9.58 on Friday, on a scale of 1-100 where 20 represents the historic mean.

European equity markets also rallied Friday after Britain and the European Union announced a breakthrough in Brexit negotiations, paving the way for future trade talks. The Eurozone blue-chip Stoxx 50 Pr climbed 1.8% for the week to end at its highest level since Nov. 29.

Japanese stocks finished a volatile week on a high note, with the Nikkei 225 adding 2.9% over a two-day period. The benchmark gauge plunged through the first half of the week.

Tax Reform on the Horizon

The Trump administration is moving closer to implementing its long-awaited tax plan after Senate Republicans passed a sweeping overhaul of the legislation earlier this month. The president now believes Congress will come together quickly to reconcile differences in time for Christmas. Trump has stated that the new plan will come into effect Jan. 1, 2018 if Republicans can iron out differences between two versions of the bill.

Analysts say that the new tax provisions would be retroactive in the event that a deal is reached in the new year.

Dollar Hits Its Stride

The U.S. dollar wrapped up its best week of the year, as upbeat economic data and expectations of higher interest rates drove the world’s most active currency higher. The U.S. dollar index (DXY), which tracks the greenback’s performance against a basket of six peers, rose 1.1% this week to close at 93.90.

U.S. employers added 228,000 workers to payrolls last month, following a downwardly revised gain of 244,000 in October, the Labor Department reported Friday. Analysts in a median estimate called for a November increase of 198,000. The jobless rate held steady at 4.1% on month, while average hourly earnings rose at a smaller than expected 2.5% annual rate.

The Week Ahead

The Federal Reserve’s policy board will hold its final meeting of the year next week. Policymakers are widely expected to raise interest rates for a third time this year, according to the CME Group’s FedWatch tool. The rate announcement will be accompanied by a quarterly summary of economic projections covering GDP, unemployment and inflation.

Federal Open Market Committee (FOMC) members will coalesce in Washington on Tuesday, with the official rate announcement scheduled for the following Wednesday afternoon.

Global data flows will also make headlines next week, including reports from China and the United States.

In other policy news, the Bank of England, European Central Bank and Swiss National Bank will each deliver interest rate verdicts. No change on either front is expected.

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 551 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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Week in Review

Weekly Recap: Bitcoin – Beaten, but Not Broken

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It was a week of mega selloffs for cryptocurrencies, as the fallout from regulatory indecisiveness and an apparent cash-out of ICOs dragged the market to its lowest level of the year. The total value of crypto assets bottomed near $189 billion on Monday, possibly signaling the death knell for a large segment of tokens listed on CoinMarketCap.

Despite the latest string of dramatic moves, bitcoin has managed to defend – on multiple occasions, we might add – a key support level commonly associated with the bottom threshold of mining profitability. By the end of the week, the bitcoin price was back above the 50-day moving average and looking poised to break-out of its latest rut.

For altcoins, the picture is less clear. Investors are becoming increasingly risk-averse to this asset class, which now represents less than 48% of the total market.

Crypto Investors Seek Refuge in Bitcoin

A non-decision by the U.S. Securities and Exchange Commission (SEC) earlier this month regarding a highly-touted bitcoin ETF triggered a massive selloff of cryptocurrencies. By Monday of this week, the panic sale had morphed into a widespread cash-out of initial coin offerings (ICOs), with altcoins and tokens registering double-digit declines across the board.

Although bitcoin was affected by the market-wide selloff, the leading digital currency emerged with as much as 54.5% of the total capitalization, a sign investors were seeking refuge from more speculative altcoins. The bitcoin price came within $100 of yearly lows, but quickly returned above $6,000 and now sits just below $6,500 on Bitfinex.

Bitcoin’s bullish bias has only strengthened in recent days, a sign that a return to $7,000 is likely in the short-term. Whereas $6,000 has offered a sturdy floor for the bitcoin price, $7,000 has emerged as a psychological barrier amid the recent downturn.

Astonishingly, the bitcoin price is at break-even for the week, with CoinMarketCap even reporting a slight gain compared with seven days ago.

Ethereum, which was down by as much as 36% week-over-week, has trimmed its seven-day loss to 16%. The developer’s cryptocurrency was at the center of the recent selloff, possibly signaling a large-scale exodus from ICOs.

Lira Recovers from Record Lows

The Turkish lira rebounded from record lows this week after Qatar announced an emergency loan package to shore up the country’s struggling financial sector. The lira collapsed earlier this month after the United States doubled down on commodity tariffs against Ankara and imposed fresh sanctions targeting key members of its government.

Turkey was back in Washington’s crosshairs on Friday after the Trump administration threatened to impose more economic sanctions if it does not release a detained American pastor being held on suspicion of espionage.

Turkey’s crisis has triggered widespread selling in other emerging markets amid fears of contagion. Emerging-market stocks and currencies suffered swift blows as a result.

Oil Hits Two-Month Lows

Crude oil is coming off one of its worst weeks in recent memory after U.S. government data showed an unexpectedly large build-up in commercial crude inventories resulting from higher than expected imports. Meanwhile, Saudi Arabia confirmed that it raised crude output in July by an average 200,000 barrels per day.

U.S. West Texas Intermediate (WTI) futures settled at $65.01 a barrel on Wednesday, the lowest since June 6.

Surging Dollar Rattles Gold Price

The price of gold plunged this week to its lowest level in 19 months, as investors parked assets in the U.S. dollar and Treasuries.

Gold futures fell below $1,180 a troy ounce on Friday, marking a 14% reversal from this year’s peak. Silver suffered a similar fate, falling more than 4% this week to its lowest since January 2017.

Precious metals crumbled as the dollar rose to 13-month highs against a basket of its peers. Assets like gold and silver are priced in greenbacks, which makes them less attractive for foreign buyers when the dollar rises.

The Week Ahead

Despite the recent correction in cryptocurrencies, the bulls aren’t out of the woods yet. Although bitcoin has managed to hold key support, the broader altcoin universe faces an uphill battle regaining lost market share. Against this backdrop, investors should be keeping close tabs on Ethereum to gauge the market’s outlook on tokens emanating from the recent ICO boom.

In conventional markets, concerns surrounding Turkey and China will be on the front burner next week. Volatility on both of these fault lines has triggered renewed interest in the U.S. dollar, which is currently trading near one-year highs.

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 551 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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Week in Review

Week in Review: As Cryptos Sell-Off, Bitcoin Approaches Major Inflection point

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A decision by the U.S. Securities and Exchange Commission (SEC) to delay a ruling on a keenly awaited bitcoin ETF triggered a fresh selling wave across all major cryptocurrencies on Tuesday. Three days later, the market has yet to engineer a meaningful recovery, with bitcoin eyeing a major inflection point that could dictate its short-term future.

Cryptos See Red

The cryptocurrency market bottomed near $219 billion on Tuesday, the lowest in a year, according to CoinMarketCap. The ensuing recovery only managed to tack on $13 billion in market capitalization as the bears maintained their control of the market. By Friday, the market was worth roughly $226.6 billion, down $37 billion from last week.

With the exception of Tether, the so-called dollar-backed stablecoin, all major cryptocurrencies in the top-ten reported heavy losses over the past seven days. In fact, Cardano’s ADA was the only major not to report double-digit percentage losses.

IOTA declined by a staggering 35% amid fresh controversy at the Berlin-based Foundation. Ripple XRP plunged more than 23% while EOS fell 22%.

Increasingly, the fate of these and other currencies is being dictated by bitcoin, whose share of the overall market swelled to 49.2% on Friday, the highest since December.

Bitcoin: Where Next?

As the market’s most important bellwether, bitcoin’s precipitous decline over the past three weeks has been especially painful. On Tuesday, BTC completed a 28% reversal from the July 24 swing high, pushing prices into oversold territory.

The leading digital currency rallied to a high near $6,630 on Bitfinex Thursday but has since backed off those levels. What’s more, a shaky defense of the most recent swing low ($6,126.50) has raised the specter of a more protracted breakdown below $6,000 – a move that would expose the June low of $5,755.

Based on the above scenario, a return to the previous day’s high is likely needed to engineer a sustainable short-term recovery. Short-term momentum is on the side of the bears, according to the relative strength index (RSI). That being said, daily trading volume of $4.6 billion remains well above the minimum threshold typically reuired for a corrective rally.

U.S. Dollar Hits One-Year High

In traditional markets, the U.S. dollar surged to one-year highs Friday after the collapse of the Turkish lira fueled fresh demand for the greenback. At its lowest point, the lira was down almost 16% against the dollar and 47% in the past 52 weeks, according to The Wall Street Journal.

The U.S. dollar index (DXY), which tracks the performance of the greenback against six currencies not including the lira, piked 0.7% to 96.20. The world’s leading currency has returned more than 4.4% in 2018 despite one of the worst starts to a year on record.

Meanwhile, the months-long devaluation of the yuan renminbi continued Friday, as the Chinese currency headed for its ninth consecutive weekly losing streak. The decline comes even after the People’s Bank of China made it costlier to short the yuan.

The Week Ahead

The digital currency market is entering a period of heightened uncertainty as bitcoin eyes a major technical inflection point. As the BTC dominance index clearly demonstrates, wherever bitcoin goes the market will follow.

The market’s 12-month low suggests that crypto psychology is damaged, with investors discounting the wave of positive fundamental developments concerning bitcoin custody. Intercontinental Exchange and Boerse Stuttgart, two of the world’s largest stock exchange operators, have recently announced big plans to bring crypto trading mainstream investors.

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 551 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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Week in Review

Week in Review: Crypto Rally Loses Steam as Bitcoin Falls Below 100-Day MA

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The cryptocurrency market swung sharply lower this week, as bitcoin entered a short-term bearish cycle following a series of technical breakdowns. On Friday, the leading digital currency fell below the 100-day moving average, erasing the prospect of an imminent recovery.

Bitcoin’s liquidity issues were also on display Friday after Hong Kong-based OKEx injected $18 million worth of BTC into an insurance fund to cover losses in the futures market. Exchange volumes have declined steadily over the past two weeks, raising the prospect of more volatile moves in the short term.

Bitcoin Leads Crypto Market Downturn

Bitcoin’s sudden reversal on Tuesday triggered a market-wide decline in asset prices, with altcoins ending the week sharply lower. Digital currencies lost a combined $24 billion in market value over the past seven days. Roughly 68% of the total loss was concentrated in altcoins and tokens.

After a failed recovery attempt, the bitcoin pricep bottomed at $7,281 on Friday, according to Bitfinex. The coin would later recover at $7,400, where it was trading below the 100-day moving average.

In terms of percentage losses, bitcoin is down nearly 8% for the week. Ethereum, bitcoin cash, EOS, Stellar and Cardano were each down double-digits.

As of Friday, the combined value of cryptocurrencies was $264 billion, according to CoinMarketCap. The market peaked above $304 billion last month.

OKEx Initiates “Clawback”

Traders in North America awoke on Friday to news that OKEx, a leading Hong Kong-based exchange, was initiating a “clawback” after a wrong-way bet on bitcoin futures left an unidentified user unable to cover losses.

In a statement released on Friday, OKEx announced it had moved to liquidate the position earlier in the week. The long position on bitcoin futures had a notional value of roughly $416 million, according to Bloomberg data. The exchange said it injected 2,500 bitcoins ($18 million) into an insurance fund to help minimize the impact on clients.

The bitcoin whale responsible for the trade was identified by the ID number 2051247. The wrong-way bet was initiated at 2 .m. Hong Kong time on Tuesday.

“Our risk management team immediately contacted the client, requesting the client several times to partially close the positions to reduce the overall market risks,” OKEx said. “However, the client refused to cooperate, which lead to our decision of freezing the client’s account to prevent further positions increasing. Shortly after this preemptive action, unfortunately, the BTC price tumbled, causing the liquidation of the account.”

Apple’s Record Valuation

Apple Inc. made history on Thursday after it became the first U.S. company to be valued at $1 trillion, highlighting the iPhone maker’s explosive growth over the past two decades.

Shares of the Cupertino, California-based company briefly crossed $207 on Thursday, catapulting its market cap above the trillion-dollar mark. Apple’s share price has exploded 22% this year, with the latest rally fueled by another stellar earnings report.

Rebounding technology stocks generated an impressive recovery for the Nasdaq. The tech-laden index rose 2.3% between Tuesday and Thursday.

The Week Ahead

The debate over cryptocurrency regulation will rage on next week as investors eye an SEC decision on the latest bitcoin ETF application submitted by VanEck and SolidX. Based on existing timelines, the agency could deliver a ruling as early as Aug. 16. However, many believe the matter will drag on for many more months.

In traditional markets, the threat of all-out trade war between the United States and China appears more imminent now that Beijing has applied retaliatory tariffs. The ongoing trade spat has been a source of concern for much of the year.

On the data front, Chinese trade and inflation data will make headlines next week. The U.S. Department of Commerce will also report the latest on consumer prices.

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.

Rate this post:

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4.6 stars on average, based on 551 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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