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Week in Review: Crypto Recovery Runs Into  Hurdles as Market Plummets Friday 

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Friday marked another down week for cryptocurrencies after a series of technical hurdles failed to spur the bullish revival many had hoped would materialize. Surprisingly, the market exhibited relative calm following yet another hack of a high-profile digital currency exchange.

Meanwhile, traditional markets were consumed by trade-war fears and a key production meeting of the Organization of the Petroleum Exporting Countries (OPEC). Monetary policy was also on the radar as the European Central Bank (ECB) hosted a forum in Portugal while the Bank of England (BOE) signaled that an interest rate hike could be on the way this summer.

Crypto Rally Fizzes

Cryptocurrencies lost $22 billion in combined market cap this week, though all the declines were concentrated in Friday trading.

Although there was no immediate catalyst for the Friday selloff, which wiped as much as $29 billion from the market, the declines reflect a continuation of a bearish cycle that re-emerged last month.

EOS, Ethereum and bitcoin cash were the majors’ biggest decliners after recording double-digit losses over a 24-hour period.

Bitcoin also fell sharply after the bulls failed to rally past the technically significant $6,800 level.

The biggest development of the week came out of South Korea after Bithumb confirmed it fell victim to a cyber breach costing $30 million in cryptocurrency. The attack compromised roughly 6% of the exchange’s capital.

It is not yet clear how the perpetrators pulled off the heist. Bithumb has fallen prey to multiple attacks over the past 12 months, prompting management to invest millions more in cyber security and IT staff.

OPEC Agrees to Raise Crude Production

The Organization of the Petroleum Exporting Countries (OPEC) reached a tentative agreement Friday to raise crude-oil production by around 600,000 barrels per day following high-level talks in Vienna, Austria.

The Wall Street Journal confirmed that the deal is only in principle and involves so-called effective barrels, which refers to “real” barrels that will actually reach the market. Saudi Arabia, the group’s de facto head, entered the meeting with the stated goal of boosting output by one million barrels per day.

In 2016, the cartel agreed to limit output by about 2% of global production, which at the time amounted to roughly 1.8 million barrels per day.

After a prolonged bear market for crude, OPEC’s production rollback supported a global recovery in oil prices, with Brent briefly trading above $80 a barrel last month. U.S. President Donald Trump has blamed OPEC for inflating oil prices through its production policies, adding pressure on the cartel to raise outputs.

Monetary Policy in Focus

Central-bank meetings have carried more significance as of late as policymakers in the United States and Europe seek to clarify their positions on monetary policy. This week, the Bank of England held interest rates in check at 0.5% but sent a strong signal that changes could be looming over the horizon.

Andrew Haldane, the Bank’s chief economist, joined two other Monetary Policy Committee members in voting to raise interest rates by 25 basis points following the meeting on Thursday. Although they were offset by six votes in favor of keeping rates unchanged, the split suggests that a shift in policy could be coming.

Meanwhile, European Central Bank (ECB) President Mario Draghi told a central-bank summit in Sintra, Portugal that he will take a gradual approach in raising interest rates once officials wind down crisis-era policies later this year. Last week, the ECB’s Governing Council said it would put an end to bond purchases by the end of 2018.

The Week Ahead

The crypto markets appear to have found a bottom but the near-term outlook remains shaky. This is partly owed to abnormally low trading volumes. Last weekend, daily turnover plunged to its lowest level in over two months. Daily volumes fluctuated between $11 billion and $13 billion for most of the week.

On the economic calendar, investors can expect a steady stream of market-moving data, including revised U.S. GDP, durable goods orders and core personal consumption expenditures.

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 606 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: XRP’s 115% Power Surge Leads Cryptocurrency Market Higher

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XRP was the standout performer in the cryptocurrency world this week. The so-called banker’s cryptocurrency rebounded more than 115% after a Ripple Labs executive teased an upcoming product release that could streamline XRP adoption.

The broader cryptocurrency market followed XRP higher after the U.S. Securities and Exchange Commission (SEC) announced it would delay a ruling on a keenly awaited bitcoin exchange-traded fund (ETF).

In traditional markets, U.S. stocks resumed their record-setting gains as pro-growth optimism outweighed lingering fears of an all-out trade war with China.

XRP Leads Crypto Uptrend

XRP is coming off its best week since the bull market as investors rallied behind the anticipated launch of the first xRapid product.   Ripple’s Sagar Sarbhai told CNBC this week he’s “confident” that a new cryptocurrency product will be released “in the next month or so.”

The value of XRP rocketed 115% between Tuesday and Friday, reaching its highest level in three-and-a-half months. The broader cryptocurrency market gained $25 billion on Friday to reach $224.3 billion, the highest in over two weeks. Altcoins and tokens led the end-of-week surge, dragging bitcoin’s dominance rate all the way back down to 51.8%.

XRP does risk a pullback at some point in the foreseeable future as markets contend with overbought levels. Traders also routinely “buy the rumor and sell the fact,” which explains price declines that occur after an anticipated positive event has occurred.

SEC Weighs Bitcoin ETF Decision

Washington’s securities regulator has announced it will seek further comments on a highly touted bitcoin ETF, a sign that officials were still grappling with a proposed rule change that would make it easier for issuers to securitize cryptoassets. The ETF in question – the VanEck SolidX Bitcoin Trust – was initially filed on June 6.

In a notice published on Thursday, the SEC outlined 18 key issues that require more input from the public. In particular, regulators are weighing the assertion that physically-backed bitcoin is less susceptible to manipulation than other commodities available in exchange-traded products.

From the notice:

“The Commission is instituting proceedings to allow for additional analysis of the proposed rule change’s consistency with Section 6(b)(5) of the Act, which requires, among other things, that the rules of a national securities exchange be ‘designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade,’ and ‘to protect investors and the public interest’.”

U.S. Stocks at Record Highs

The Dow Jones Industrial Average and S&P 500 Index notched record highs this week, as investors shrugged off an escalating trade war between China and the United States. Gains were largely driven by a rebound in technology shares as well as optimism that the U.S. economy is on solid footing.

Labor market data confirmed that outlook on Thursday as initial jobless claims fell to nearly five-decade lows. Last week, the Department of Labor reported a stronger than expected jump in hourly wages, a sign that plentiful jobs and declining unemployment was leading to higher pay.

The U.S. economy is coming off its best quarter of growth since 2014. Unlike 2014, the Q2 upsurge didn’t follow a ‘polar vortex,’ which had temporarily disrupted economic activity four years ago. According to the Atlanta Federal Reserve, the economy is forecast to grow at an even faster rate in the third quarter. Current estimates peg Q3 growth at 4.4% year-over-year.

The Week Ahead

Is this the end of the dreaded crypto market downtrend? It’s too early to be sure but the latest rebound in XRP and bitcoin suggests that the bears have relinquished their grip on the market, at least in the short term. Stepping back, however, bitcoin remains in a protracted bear market that could continue for the foreseeable future. For investors, this means lateral moves and tighter trading ranges are to be expected.

Monetary policy is back on the agenda next week as the Federal Reserve meets in Washington. The Federal Open Market Committee (FOMC) is widely expected to raise interest rates on Wednesday and may signal for one additional hike this year. The FOMC policy statement will be accompanied by quarterly projections for GDP, unemployment and inflation, as well as the ‘dot-plot’ summary of interest rate expectations.

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 606 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: Ethereum Returns from the Abyss

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The cryptocurrency Ethereum took a steep dive this week, culminating in a fresh 16-month low on Wednesday. Concerns over scalability, ICO cash-outs and future growth of the sector all fueled the declines. The selloff, which mirrored a wider slump in the cryptocurrency market, was eventually picked up by bargain hunters, triggering a 22% rebound in ether’s price over two days.

Bitcoin’s trajectory has been much more predictable relative to its peers. The leading digital currency by market capitalization has virtually broken even for the week, with the technical charts showing the potential for bigger upside in the near future.

Ethereum Crashes

It has been a rollercoaster week for Ethereum. On Wednesday, the developer’s cryptocurrency dived below $170 for the first time since May 2017 amid signs that initial coin offerings are offloading their raised funds. Ether-based tokens spent 157,700 ETH over a seven-day stretch in what was the biggest selloff since March. Presumably, startups are cashing out their ether for fiat money after a large-scale transfer to digital currency exchanges during the month of August.

Ether’s price experienced a sharp reversal on Thursday as traders swept up oversold tokens at a discount rate. The cryptocurrency would soon return above $200, eventually hitting a high of $223. The rebound helped ether pare its weekly decline to just under 6%.

ERC-20 tokens also recovered significant losses but double-digit declines weren’t uncommon. Vechain, ICON, Zilliqa and several others reported weekly declines of at least 10%.

Bitcoin Holds Steady

With altcoins and tokens in meltdown mode, bitcoin charted an entirely different path this week, as prices returned tot heir stable and predictable trading range. BTC is virtually unchanged compared with seven days ago, with prices returning to the $6,500 range. By Friday, bitcoin’s trade volume had returned above $4 billion on global exchanges, a sign that capital was flowing back into the market.

Bitcoin’s dominance rate swelled to 58.1% during the height of the Ethereum/token crash, according to CoinMarketCap. That was the highest since December. By Friday, bitcoin’s share of the overall market was roughly 56%.

Bitcoin’s technical indicators suggest that a short-term uptrend is likely. Prices have moved above the 50-day moving average and are fast approaching the longer-term average.

ICOs are Securities, Says Federal Judge

A U.S. federal judge has ruled that ICOs may be treated as securities following a criminal case involving a former cryptocurrency promoter. The decision, which was handed down Tuesday by U.S. District Judge Raymond Dearie, affirms the SEC’s position that it has authority over token offerings.

The ruling was delivered against Maksim Zaslavskiy, a fraudulent ICO promoter accused of raising money for assets that never existed. The Brooklyn-based businessman was charged with conspiracy and two counts of securities fraud related to ICOs purportedly backed by investments in diamonds and real estate.

“Per the indictment, no diamonds or real estate, or any coins, tokens, or currency of any imaginable sort, ever existed — despite promises made to investors to the contrary,” Dearie said. “Simply labeling an investment opportunity as a ‘virtual currency’ or ‘cryptocurrency’ does not transform an investment contract – a security – into a currency.”

The Week Ahead

The cryptocurrency market appears to have reached rock bottom, though it’s unwise to rule out further declines in the near future. Ethereum’s protracted selloff has raised red flags about the future of ICOs and whether the long-awaited token mass extinction event is nearing.

Bitcoin, on the other hand, is charting an entirely different path as prices appear to have formed a solid bottom near $6,000. This is an encouraging sign for the bulls and the broader mining industry.

For traditional markets, monetary policy and trade negotiations top the agenda next week. The Federal Reserve on Wednesday is expected to raise interest rates for the third time this year. Meanwhile, China and the United States will likely provide greater clarity on upcoming trade negotiations after Beijing accepted the Trump administration’s offer to resume talks.

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 606 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: From Economic Abstraction to Fake News, Cryptocurrencies Plunge $35 Billion

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The cryptocurrency market declined suddenly and sharply on Wednesday, with Ethereum and its ERC-20 contingency leading the decline after a prominent crypto investor cast serious doubts about the protocol’s future. Meanwhile, bitcoin plunged by as much as 14% from its recent high after Business Insider reported that Goldman Sachs is abandoning its plans to open a cryptocurrency trading desk. This is nothing but fake news, according to a top Goldman executive.

Bitcoin Falls $1,000

After reaching its highest level in a month, bitcoin suffered a fresh selloff in the latter half of the week as negative headlines and profit-taking spurred a mass exodus from the cryptocurrency market. The bitcoin price bottomed near $6,300 on Thursday after reaching a high above $7,400 earlier in the week.

Prior to the latest skid, bitcoin had exhibited newfound stability defined by narrower trading ranges and incrementally higher prices. This eventually led to a bullish crossover of the 50-day moving average the 200-day moving average.

The selloff wiped $16 billion off bitcoin’s market cap, bringing its total value to around $111 billion. However, BTC now accounts for 54.7% of the cryptocurrency market’s total value. Bitcoin’s dominance rate peaked at 55.3% on Wednesday, according to CoinMarketCap.

Goldman Sachs Responds to “Fake News”

Bitcoin’s sudden reversal this week was accompanied by a report from Business Insider suggesting that Goldman Sachs has decided to ditch its forthcoming crypto trading business. Cryptocurrencies shed a combined $35 billion in market capitalization within 24 hours of the report being released.

Shortly after the report went viral, a Goldman Sachs executive sought to clear the air about the bank’s bitcoin ambitions.

“I never thought I would hear myself use this term but I really have to describe that news as fake news,” Goldman Sachs Chief Financial Officer Martin Chavez said on stage at the TechCrunch Disrupt Conference, as quoted by CNBC.

“The next stage of the exploration is what we call non-deliverable forwards, these are over the counter derivatives, they’re settled in U.S. dollars and the reference price is the bitcoin-U.S. dollar price established by a set of exchanges,” Chavez said.

Economic Abstraction

Ethereum was this week’s biggest loser as prices fell 20% to new yearly lows. Ether’s collapse was accompanied by a rapid selloff of ERC-20 tokens, which mirrored last month’s cash-out.

Ethereum is the center of a growing debate over economic abstraction, a term used by some members of the community to describe gas payments in a non-ETH asset. Simply put, economic abstraction is basically paying smart contract fees through an ERC-token rather than Ethereum. According to cryptocurrency entrepreneur Jeremy Rubin, abstraction will eventually render Ethereum obsolete and drive its price down to zero.

According to Vitalik Buterin, Rubin’s claim is partially correct if one assumes that economic abstraction is going to happen. However, developers are currently tendering two proposals – modified fee market and storage maintenance fees – that would make ether-based gas fees mandatory. This means block proposers will need to “cough up” ETH regardless of what happens at the user level.

The Week Ahead

As the events of the past week demonstrated, crypto prices can rise and fall on the turn of a speculative dime. The latest selloff has pushed major assets into oversold territory, making a short-term recovery likely. However, with the long-term bull market negated, cryptocurrencies will struggle to regain their footing as debates over regulation and ETFs continue.

Emerging markets will remain in the spotlight next week as Turkey and Argentina battle a brewing currency crisis and South Africa contends with a new economic recession. These factors will likely keep emerging-market stocks under pressure 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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4.6 stars on average, based on 606 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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