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Week in Review

Week in Review: Carnage Engulfs Cryptocurrencies and Stocks; Bitcoin Mining Difficulty Plunges 24%

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From a risk-on perspective, the global financial markets took a beating this week. Digital assets like bitcoin, EOS and bitcoin cash plunged anew while equity prices slid back into the abyss following a strong end to November. Seasonal influences that normally accompany the holiday season have thus far eluded the market, leaving investors with a considerable loss. Market participants with exposure to cryptocurrencies, stocks and ETFs have likely seen their holdings wither away as a result of the bearish trends taking shape.

Crypto Crash Intensifies

The carnage that has engulfed the cryptocurrencies since mid-November intensified on Friday, as bitcoin and the leading altcoins plunged to new yearly lows. The combined value of all cryptoassets bottomed at $106 billion earlier this morning, according to CoinMarketCap. Over the past four weeks, the market cap has lost more than $100 billion.

Since last Friday, losses among the top-ten cryptocurrencies have ranged between 7% and a staggering 40%. Bitcoin cash occupied the latter, as prices fell below $100 for the first time in its history. Bitcoin SV and Tether’s USDT stablecoin were the only two cryptocurrencies to emerge from the weekly rout unscathed. This led bitcoin SV to briefly overtake bitcoin cash and Tether as the world’s fifth-largest blockchain.

Bitcoin Mining Difficulty Falls

Bitcoin on Friday fell below $3,400 for the first time since September 2017, with price action and trading volume signaling that a bigger pullback toward $3,000 is likely. At this rate, mining bitcoin is a money-bleeding endeavor that offers little return on investment. Bitcoin’s mining difficulty peaked in mid-October but has since fallen by a whopping 24%, according to Blockchain.com. The following chart highlights how drastically mining difficulty has fallen in recent months.

The price collapse since mid-November has reportedly caused hundreds of thousands of bitcoin miners to halt operations temporarily. As Hacked previously reported, most mining operations depend on a bitcoin price of around $6,000-$7,000 just to break even.

The month-long crash began on the eve of the bitcoin cash hard fork, accelerated during the ABC/SV hash war and then somewhat stabilized following the official chain split. The selloff re-emerged on Friday as short-sellers continued to strangle the market.

U.S.-China Tensions Rattle Stocks

U.S. stocks on Tuesday experienced one of their worst drops of the year, as trade tensions between the United States and China resurfaced. The major indexes were on track for another brutal decline on Thursday after it came to light that a senior Chinese executive of Huawei Technologies Co was arrested in Canada following a lengthy investigation by U.S. authorities.

Meng Wanzhou, the chief financial officer of the China-based tech giant, was apprehended in Vancouver Dec. 1. According to various news outlets, she risks extradition to the United States amid allegations of money laundering and sanctions violations.

The Dow Jones Industrial Average fell 800 points on Tuesday. It was on track for a more than 500-point drop on Thursday before paring losses in the final hour of trading. U.S. stock markets were closed on Wednesday to mourn the death of former President George H.W. Bush.

OPEC and Russia Come to Terms

On Friday, the Organization of Petroleum Exporting Countries (OPEC) secured an agreement with Russia to slash crude production by 1.2 million barrels per day. According to Bloomberg, the 15-member cartel will shoulder 800,000 barrels of the burden and its partners will be responsible for the remaining balance.

The cuts follow marathon negotiations between OPEC, Russia and their allies on how to best distribute the cuts following two months of bear-market conditions. Oil prices are down more than a third since early October.

U.S. President Donald Trump has criticized OPEC’s production policies and has called on Saudi Arabia and its allies to refrain from manipulating prices. The United States could be well on its way to becoming a stable net exporter of crude by the end of the president’s first term. As Hacked recently reported, the world’s largest economy became a net exporter last week for the first time in 75 years.

The Week Ahead

It’s difficult to imagine a scenario where bitcoin and cryptocurrencies stage a meaningful recovery this month. The digital asset class is expected to remain under pressure for the foreseeable future as short-sellers continue to dominate market flows. That being said, investors can expect an upward consolidation over the next seven days before profit-taking knocks prices back a couple of notches.

Against this backdrop, it’s important to remember that the fundamental picture on bitcoin has not changed as drastically as the price suggests. If anything, market developments have been overwhelmingly positive now that derivatives and custody solutions have taken center stage. 2019 is shaping up to be a big year for bitcoin; new futures products, regulated exchanges and the push for the first U.S.-based ETF product will likely shape the outlook moving forward.

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 704 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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Week in Review

Week in Review: EOS Goes Against the Grain, VanEck Blasts Allianz Over Crypto

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The crypto crash of the last six weeks has widened the chasm between early adopters of digital assets and those who believe they are a scam and should be outlawed. This debate is now raging within institutional circles, with the CEO of VanEck taking Allianz to task over calls to ban cryptocurrencies outright.

In terms of market dynamics, not much has changed in the last week. Bitcoin succumbed to new yearly lows Friday, capping off a relatively uneventful week of lower highs and lower lows. EOS emerged as a net gainer while bitcoin SV registered the biggest percentage drop among the majors. Since breaking off from bitcoin cash, SV has shown a propensity to move inversely with its peers.

Bitcoin Extends Slide

The bitcoin price on Thursday set new lows for the year, capping off a disappointing week that failed to generate higher bids for the leading digital currency. At its lowest point Thursday evening, BTC/USD traded around $3,204 on Coinbase Pro. Over the past seven days, bitcoin’s average price fell 2.8%, according to CoinMarketCap. Aggregate data currently show an average price of $3,300.

Accounting for 55.1% of the entire cryptocurrency market, bitcoin’s slide had a gravitational pull on altcoins and tokens. The combined market cap of all coins fell by $4 billion this week to $104.5 billion.

Long-term holders of bitcoin have been advised by Weiss Ratings that now is the best time to increase their positions. The Florida-based rating agency told its audience via Twitter that crypto is “here to stay,” and that bitcoin’s current price represents its “least speculative investment.”

EOS’ Incentive Spiral

Losses among the major cryptocurrencies this week ranged from 0.5% (Ethereum) to 28% (bitcoin SV), but EOS managed to string together a gain of 10.6% following a devastating stretch that dragged prices to $1.50. The rebound this week appears to be technical in nature after prices reached extreme oversold territory. The cryptocurrency last traded around $1.86.

As Hacked reported earlier this week, EOS’ block producers are struggling to stay alive amid the downtrend. A new survey by altShiftdev, the creator of My EOS Wallet, showed that the EOS break-even point for block producers is $4.14. While EOS can easily adjust the fee it pays producers, the reward is essentially meaningless when the coin is valued at less than $2.

Mediocre incentives and cyclical bear markets present difficulties for the EOS network. What’s more, some people are convinced that the U.S. Securities and Exchange Commission (SEC) will bring the hammer down on the project over its year-long crowdfunding campaign. This warning came from none other than Charles Hoskinson, the founder of Cardano. More on that story can be found here: EOS Price Analysis: Cardano Founder Charles Hoskinson Warns of Regulatory Action Against EOS.

VanEck Tells Allianz to “Shut the Fuck Up”

It didn’t take long for VanEck’s chief executive to take Allianz to task over claims that the cryptocurrency industry should be outlawed. The war of words, which was reported by CCN, basically goes like this: Allianz CEO Andreas Utermann told a panel in London that regulators should “outlaw” cryptocurrencies. A few days later, VanEck’s Gabor Gurbacs told Allianz to “shut the fuck up on anything crypto or insurance” (the latter is a reference to Allianz’s poor handling of an insurance claim submitted by Gurbacs’ mother).

Gurbacs’ reaction came via Twitter, though the thread has since been deleted.

The exchange is significant when we consider the players involved. Allianz is one of Europe’s biggest asset managers. VanEck is no slouch, either, with nearly $50 billion in assets under management. Gurbacs’ company is pushing hard for a bitcoin exchange-traded fund (ETF), and is working with CBOE and SolidX to make that happen.

Gurbacs lashed out against the insurance industry as a whole. From CCN:

“Insurance companies regularly mislead investors, their disclosure systems are questionable and leave clients behind when they most needed. Insurance companies need more regulation, not crypto…The state by state regulation of insurance companies, and inconsistencies across the board, make it practically impossibly for policy buyers to understand what the heck they are buying. Buying insurance is like intending to buy bread but getting horse-shit instead.”

Interestingly enough, the blockchain revolution is proposing to upend the way insurance companies do business. It’ll be interesting to see how firms like Allianz react.

The Week Ahead

December is shaping up to be another disappointing month for cryptocurrencies. Investors in search of a silver lining may take solace in knowing that the worst of the downtrend appears to be over. This doesn’t mean new lows aren’t over the horizon; it simply means that weekly declines of 30% are less likely now that bitcoin is testing a critical long-term support.

There’s no denying that the recent skid is positively correlated with the hard fork of bitcoin cash on Nov. 15 (after all, prices began to plunge on the eve of the highly anticipated event). However, the longer we have been able to evaluate the trend, the more apparent it has become that the capitulation was triggered by multiple technical selloffs after bitcoin fell below $6,000 – a critical support that represents the long-term breakeven price for miners. With this view in mind, the outlook for the remainder of the year remains overwhelmingly bearish, and investors shouldn’t add to their positions until a definitive bottom has been reached.

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 704 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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Week in Review

Week in Review: Have We Reached Crypto Bottom?

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The search for an elusive ‘crypto bottom’ may have finally come to an end this week. Between Sunday and Thursday, the combined market cap of all cryptocurrencies witnessed a peak-to-trough swing of $27 billion in favor of the bulls, with bitcoin and the major altcoins engineering double-digit rallies. The recovery engine lost steam on Friday, putting coin values on track for a weekly loss of around $10 billion.

In traditional markets, U.S. stocks staged a large relief rally this week as investors turned optimistic about the prospect of a new trade agreement between the United States and China. Oil prices notched fresh yearly lows as oversupply concerns continued to weigh.

Cryptocurrencies Bounce

Cryptoassets recovered as much as $27 billion in lost market cap this week, as bitcoin and the broader altcoin universe staged double-digit rallies across the board. The market peaked at $142 billion on Thursday after setting a new 14-month low of $115 billion over the weekend.

Bitcoin rose more than $1,000 peak-to-trough, as the leading digital currency broke through $4,500 during the height of the recovery. A technical selloff on Friday drove price back toward the $4,000 support level, where it now resides.

Tron was among the top performers this week, registering a peak-to-trough gain of more than 55%. Despite falling out of the top-ten, TRX has been aided by positive fundamental drivers and a bullish Justin Sun, who recently advised market participants to check back on prices in two years’ time.

Interestingly, TRX was one of a small handful of cryptocurrencies to report a gain over the seven-day cycle. Compared to last Friday, TRX is up 4%. By comparison, bitcoin is down more than 6% and XRP 12% over that stretch.

Bitcoin SV Cracks Top-10

The bitcoin cash hard fork of Nov. 15 created a permanent split in the BCH community, resulting in a new coin entering circulation. Bitcoin cash ABC, which was widely regarded as the primary implementation of the upgrade before the fork, retained the BCH symbol after winning the hash war against the rival SV chain.

Bitcoin SV entered circulation as the no. 9 cryptocurrency by market cap, overtaking the likes of Cardano, Monero and Tron. SV was the only cryptocurrency in the top-ten to avoid the market correction on Friday. Prices were last seen trading steady just north of $94.

The hard fork had a devastating impact on the cryptocurrency market. It not only diverted hash power away from mining bitcoin, but undermined investor sentiment. Calvin Ayre, one of the primary backers of bitcoin SV, offered a peaceful resolution to the hash war last week by urging both sides to abandon the BCH moniker. In his view, bitcoin cash no longer exists and has instead been replaced by two new cryptocurrencies.

Stocks Recover, Oil Slides

U.S. stocks staged a large relief rally this week, as investors turned their attention to a high-profile G20 summit in Buenos Aires on Friday. A planned meeting between U.S. President Donald Trump and Chinese counterpart Xi Jinping will be the highlight of the conference as both sides look to resolve a bitter trade dispute. The Dow Jones Industrial Average surged more than 600 points on Wednesday, returning to positive territory for the year.

The rout in oil prices intensified this week, as U.S. futures fell below $50 a barrel for the first time in over a year. Prices were down again on Friday as investors continued to doubt OPEC’s ability to drain the market from excess supply. The 15-nation oil cartel will meet in Vienna, Austria Dec. 6 to set new production limits.

The Week Ahead

Cryptocurrencies like bitcoin, XRP and Ethereum remain firmly entrenched in bear-market territory, and this reality is unlikely to change in the near future. The main question is whether the bottoming process has been completed or whether a new round of fresh lows can be expected. The resolution of the bitcoin cash hard fork is promising from the perspective of the bulls; however, a fractured community is likely

Economic data are also on the docket next week, culminating in the keenly awaited U.S. nonfarm payrolls report on Friday. The U.S. labor market remains on solid footing, though weekly jobless claims have risen in consecutive weeks, signaling the potential for a slowdown in the months ahead.

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 704 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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Week in Review

Week in Review: Crypto Carnage Intensifies; Bitcoin Cash ABC Retains BCH Ticker Symbol

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Airplane crash

Cryptocurrency prices sold off anew this week, as bitcoin and the altcoin universe crashed to lows not seen since September 2017. The hash war over bitcoin cash continued despite an early lopsided victory for the ABC chain, which retained the BCH ticker symbol on major exchanges. Calvin Ayre, one of the biggest proponents of the competing bitcoin cash SV chain, acknowledged that the opposing side cheated its way to victory and proposed a mechanism by which the war can be resolved peacefully.

Volatility in traditional markets intensified this week, as U.S. stocks turned negative for the year and oil prices crashed to new yearly lows.

Cryptocurrencies Continue to Bleed

The combined value of all cryptocurrencies in circulation bottomed near $136 billion on Friday, having declined a staggering $48 billion over the course of the week and $73 billion since Nov. 12, when the downturn began.

With the exception of USDT and TUSD, two dollar-backed stablecoins, all major cryptocurrencies in the top-30 recorded doubled-digit percentage losses over the past week. Bitcoin’s price plunged more than 22% to reach a low below $4,100 on Bitstamp Friday. Bitcoin cash lost roughly half its value and briefly traded below $200 for the first time in its history.

Ethereum sold off more than 31%; Stellar XLM lost 25%. EOS, Litecoin and Cardano were each down more than 22%. XRP managed to outperform the market but still lost 13% of its value over the seven-day period.

Hard Fork Matters

The hash war between bitcoin cash ABC and the competing SV chain intensified this week, though most major exchanges recognized the former as being the primary implementation for the BCH upgrade. As such, bitcoin cash ABC has retained the BCH ticker symbol, with CoinMarketCap integrating both data streams in its calculation of aggregate prices and overall market valuation.

CoinGeek founder and casino mogul Calvin Ayre released a statement on his website acknowledging that bitcoin cash ABC had won the hash war, but did so only by cheating. In his view, the SV chain would have prevailed had bitcoin.com not diverted its entire mining pool to mining BCH. As Hacked previously reported, bitcoin.com put a freeze on its BTC operations to free up capacity to mine BCH exclusively.

Although Ayre believes the hard fork is permanent, he said a prolonged war could be averted if both sides abandon the BCH label. In his view, bitcoin cash has already been replaced by ABC and SV.

Kraken CEO Jesse Powell said the biggest issue behind bitcoin SV are the “grandiose personalities” that have fractured the BCH community. In a Wednesday tweet, he issued the following statement:

“Never had anything against Calvin Ayre but this approach is anathema to the community you hope to have adopt your technology. The merits of BSV are overshadowed by the alienating threats of a few grandiose personalities. Longer chain != adoption. Victory may be pyrrhic.”

Kraken was one of a handful of exchanges that came out in support of bitcoin cash ABC.

Stocks, Oil Plunge

U.S. stocks declined sharply in the first half of the week, as a selloff in the technology sector drove the S&P 500 and Dow Jones Industrial Average into negative territory for the year. The tech rollover was later accompanied by a sharp drop in energy stocks, as oil prices resumed their months-long correction. As of Friday, both the S&P 500 and Dow were down more than 1% for the year.

The rout in oil prices intensified Friday, as investors turned their attention to an upcoming summit of the Organization of Petroleum Exporting Countries (OPEC). U.S. crude futures plunged to a low of $50.60 a barrel on Friday, marking the second time this week that prices fell more than 7%. Brent crashed to a low near $59 a barrel. Both contracts were trading at their lowest levels in over a year.

While OPEC is widely expected to announce new output cuts next month, it might not be enough to account for the anticipated drop in demand in 2019 and beyond. A slowdown in global economic growth is expected to limit crude consumption for the foreseeable future.

The Week Ahead

The crypto downturn shows no signs of relenting anytime soon, which means further losses are likely in the near term. Bitcoin tested the $4,000 support on Friday, which suggests the bears are firmly in control. This is further highlighted by the upsurge in futures trading over the past two weeks.

While the downturn has been severe, bitcoin has grown accustomed to large value swings during its brief history. This may be somewhat surprising to new traders, especially those who entered the market during one of the leas volatile periods in bitcoin’s history. As Hacked recently reported, bitcoins nearly 80% collapse is the fifth worst stretching back to 2011.

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 704 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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