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Week in Review

Week in Review: Cryptocurrencies and Stocks Fall Deeper into Correction as Volatility Spikes

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The global financial markets are wrapping up a highly volatile week of trade, with widespread losses reported across multiple asset classes. Cryptocurrencies plunged by as much as $550 billion from their record peak, while stocks narrowly avoided their worst week since the financial crisis. The narrative underpinning the Trump rally is slowly unraveling with rate-hike jitters threatening the sustainability of the global economic recovery.

Cryptocurrencies Stabilize After Massive Correction

After a chaotic week, the global cryptocurrency market settled above $400 billion on Friday, with bitcoin and major altcoins recovering. The market’s total value bottomed near $276 billion on Tuesday, as regulatory uncertainty triggered a panic sale across virtually all major assets. This would later fuel a major technical reversal sending bitcoin below $6,000.

By Friday, bitcoin’s value recovered above $8,500, accounting for roughly 36% of the market’s total capitalization.

The rout in cryptos immediately followed a prolonged buying frenzy that pushed the market north of $830 billion. The sharp correction has many traders searching for a bottom. Prognosticators haven’t been very helpful, with experts predicting anything from a zero-bound crash to multi-trillion-dollar gains.

On the regulatory front, U.S. securities agencies struck a cautiously optimistic tone about the future of cryptocurrency trading. In prepared testimony before the Senate Banking Committee, the heads of the Securities and Exchange Commission and Commodity Futures Trading Commission made no mention of a major regulatory shakeup.

Highly Volatile Week for Stocks Ends Positive

U.S. stocks were on track for their biggest weekly drop since the financial crisis before a late-session surge Friday pared some of the losses. Even with a 330-point Friday rally, the Dow plunged 5.2% for the week, its worst showing in two years.

The broader S&P 500 Index also lost 5.2% following a brief stint at three-month lows.

A measure of implied volatility known as the CBOE VIX spiked above 40 on Friday after reaching a high of 50 earlier this week. The spike in volatility is perhaps the clearest signal yet that smooth gains under President Trump are no longer guaranteed.

As Hacked reported earlier this week, products that short volatility shed billions this week, with the VelocityShares XIV ETN falling from $1.9 billion in assets to just $110 million.

The Wall Street selloff triggered broad declines globally, with Chinese stocks leading the declines and Japan’s Nikkei 225 falling into correction territory.

The Week Ahead

The biggest question heading into next week is whether equities and cryptos will fall deeper into correction, or whether the market will rebound from its recent bottom. The general decline of pro-growth optimism has left Wall Street worse off than it was at the start of the year.

The cryptocurrency market has also entered a period of uncertainty, as investors continue to fret about possible regulatory action against digital currency exchanges. So far, these fears have been overblown, with South Korea adopting only limited measures to control the market and the United States expressing cautious optimism about the future of regulation.

In terms of economic data, the middle of February offers up several high profile releases, including U.S. CPI and Eurozone GDP. The final batches of Q4 earnings are also 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 544 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 544 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.

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4.6 stars on average, based on 544 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: Bitcoin’s Bull Run Tempered by Winklevoss ETF Miss; Facebook Makes Wrong Type of History

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Bull pattern

Bitcoin’s bullish revival continued this week, as prices crossed the $8,500 plateau for the first time in two months. The gains sparked a $20 billion rally in the overall market, with the likes of Stellar and VeChain posting double-digit returns.

The rally came under pressure Friday after the U.S. Securities and Exchange Commission (SEC) rejected a second application for a bitcoin ETF by Cameron and Tyler Winklevoss. Once again, the agency cited consumer protection and market manipulation in its decision to block the application.

Cryptocurrency Market Crosses $300 Billion

Bitcoin’s latest milestone had a tailwind effect on the broader market, as total coin values crossed $300 billion for the first time since June 11. The market’s $304 billion peak on Tuesday marked a $70 billion reversal from last month’s swing low.

Crypto-market values briefly dipped to around $286 billion on Friday before rebounding sharply to $295 billion. For the week, the market added more than $12 billion.

In terms of strongest weekly performers, VeChain spiked 48% after Binance announced the completion of the cryptocurrency’s mainnet swap. VeChain now trades under the symbol VET, which stands for VeChain Thor.

Stellar Lumens gained 11% week-on-week as XLM continued to benefit from high-profile business partnerships. Meanwhile, the Zcash price jumped 15% after BitGo announced full support for the privacy coin.

Bitcoin rounded out the week’s top performers with a gain of more than 9%.

SEC Rules (Again) on Winklevoss ETF

A second attempt by Tyler and Cameron Winklevoss to register their bitcoin ETF with the SEC was rejected Thursday after the application failed to prove that underlying markets were “resistant to manipulation.”

The June application from the BATZ BZE Exchange included a proposed rule change that, if approved, would pave the way for the first crypto-backed ETF.

“Despite today’s ruling, we look forward to continuing to work with the SEC and remain deeply committed to bringing a regulated bitcoin ETF to market and building the future of money,” Cameron Winklevoss, co-founder of the Gemini exchange, said in a statement.

Investors believe that another bitcoin ETF proposed last month by VanEck and SolidX stands the best chance of gaining regulatory approval. An SEC ruling on the matter could be handed down as early as Aug. 16.

Bitcoin initially wavered on the news, with prices falling below $7,900. The bitcoin price would eventually recover around $8,150, according to CoinMarketCap.

Facebook’s $119 Billion Collapse

Facebook Inc. (FB) made the wrong type of history Thursday after posting the biggest-ever loss by any company in U.S. stock market history. On a market cap basis, the Mark Zuckerberg-led social media titan plunged $119 billion following a disastrous quarterly report.

Of course, context is key whenever Wall Street throws around terms like “disastrous.” On the face of it, Facebook posted solid earnings and revenue growth for the second quarter. In fact, the company’s profitability was higher than expected. However, it was the top line that investors were concerned about.

For the first time since 2015, revenue growth failed to live up to expectations, which exposed a litany of issues facing the company. As Hacked reported Thursday, Facebook is facing investor backlash over revenue growth, Instagram Stories and new privacy laws. Some investors have even called for Zuckerberg to relinquish his position as Facebook Chairman.

The Week Ahead

With the lion’s share of S&P 500 companies yet to report their Q2 results, corporate earnings will remain in the spotlight next week. Despite Facebook’s revenue miss, Corporate America remains on track for its second best quarter since Q3 2010.

Cryptocurrency traders will be keeping close tabs on the latest rumblings from the SEC concerning the VanEck SolidX Bitcoin Trust. The securities regulator made it clear in the Winklevoss decision that the rationale for rejecting yet another crypto ETF rests on consumer protection and not on bitcoin’s value as an investment.

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 544 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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