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Week in Review

Week in Review: Epic Selloff Hit Cryptos, Stocks as Volatility Reaches 2016 Levels

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It was a sea of red across multiple asset classes this week, with stocks and cryptocurrencies experiencing epic-style collapses. The crypto market slump was largely driven by fears of regulatory bottlenecks after India sounded the alarm on illicit financing. On Wall Street, concerns over rising interest rates put the major indexes on track for their worst weekly performance in two years.

Carnage Hits Crypto Market

The violent selloff that has rocked cryptocurrencies since January continued this week, as bitcoin and the major altcoins shed hundreds of billions in market cap. The market appears to have bottomed on Friday at roughly $348 billion, which was the lowest since early December.

At press time, the total market capitalization for all coins was roughly $417 billion.

Bitcoin led the massive reversal, falling 21% over five days to trade as low as $8,530. The world’s top cryptocurrency by market cap was last seen trading around $8,780. Its share of the total market increased slightly toward the end of the week, reaching a high of 37.5%.

Digital currencies have been on edge ever since South Korea announced plans to introduce stricter regulations on the market. Those efforts amounted to a ban on anonymous trading accounts, which went into effect Jan. 30.

Earlier this week, India’s Finance Minister said his government will scrutinize more closely black market activity involving cryptocurrency. Media outlets erroneously took this to mean that the government was “killing” the crypto market.

Even if we ignore fake news, investors still have reason to be alarmed. The cryptocurrency market continues to be infested by cyber criminals targeting exchanges as well as ICOs. On Thursday, Bee Token became the latest crowdfunding campaign to get attacked (this time, it was a phishing scam targeting emails and Telegram).

Rising Interest Rates Trigger Equity Rout

U.S. stocks posted heavy losses on Friday, with the Dow Jones Industrial Average recording its first 600-point drop in two years. Though slumping all week, equities sold off more intensely Friday after government data showed a surprise pickup in wages.

Average hourly earnings for U.S. workers climbed 2.9% annually in January, the Labor Department reported Friday in its monthly nonfarm payrolls data series. That was the fastest increase in more than eight years, a tangible sign that inflationary pressures are building and that the Federal Reserve will move to raise interest rates more intently.

The report also showed that overall employment rose by a faster than expected 200,000 as joblessness held steady at 4.1%.

Stocks are reversing sharply from their best start to a year in decades. The CBOE VIX, a measure of 30-day volatility, rose on Friday to its highest level since 2016. The VIX closed the week at 17.31, where it was seen inching closer to its normal historic range.

Monetary Policy

U.S. monetary policy was left unchanged this week, as the Federal Reserve concluded its final rate meeting under the guidance of Janet Yellen. Beginning this month, the central bank will be headed by Jerome Powell. He will chair his first Federal Open Market Committee (FOMC) meeting in March.

That’s when the central is expected to raise interest rates again, based on the 30-day Fed Fund futures prices, which gauge the market’s outlook on monetary policy. The Fed is keeping a close eye on inflation, and will likely press forward with additional rate hikes to ensure price growth doesn’t overstep its 2% target.

Policymakers use the core personal consumption expenditure (PCE) index to gauge inflation. On Monday, the Commerce Department said the inflation measure fell to 1.7% annually in December, down from 1.9% the previous month.

The Week Ahead

The major question heading into next week is whether cryptos and stocks are experiencing a momentary correction or a more protracted downturn. For cryptocurrencies, it appears to be the former. Market fundamentals haven’t changed very much since the start of the year, when the total capitalization blew past $800 billion.

Investors are cautioned against reading too much into the media hysteria. As we wrote on Thursday, the mainstream media outlets have successfully talked down cryptocurrencies on several occasions. This is unlikely to change anytime soon as more governments consider regulating the crypto sphere.

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 546 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 546 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 546 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 546 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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