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Week in Review

Week in Review: Ripple Outpaces Crypto Peers; Santa Claus Rally Eludes U.S. Stocks

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It was a big week for Ripple XRP, as the so-called bankers’ token overtook Ethereum to become the world’s No. 2 cryptocurrency by market capitalization. At the same time, bitcoin stabilized in the mid $14,000 range following another major correction.

On Wall Street, the Santa Claus rally failed to deliver holiday gains as U.S. equities traded lower for the week. Meanwhile, a weaker dollar helped gold prices rise above $1,300 a troy ounce, and also provided the catalyst for U.S. crude’s jump above $60 a barrel.

Ripple Hits $2.00

Ripple (XRP/USD) was the week’s biggest development as far as cryptocurrencies are concerned. The XRP token surged more than 53% on Friday to reach a new all-time high of $1.93. The gain gives Ripple  a market cap of more than $80 billion, enough for the no. 2 spot on the crypto market leader board. By comparison, Ethereum’s native ether token is worth nearly $73 billion.

Cryptocurrency NEM (XEM/USD) also rose to new highs this week, with prices climbing nearly 17% on Friday to $1.05, according to CoinMarketCap. NEM is now a top-ten cryptocurrency, ahead of Dash and Monero.

It was another week of ups and downs for bitcoin (BTC/USD), with values ranging from the mid-$13,000 to the mid-$16,000. At the time of writing, bitcoin was up nearly 4% at $14,413, paring its weekly drop to around 3%.

The total market cap for all cryptocurrencies is $613 billion, which is a huge improvement over last week’s levels. A total of 35 cryptocurrencies are valued at $1 billion or more and 21 of them are worth at least $2 billion. Bitcoin accounts for roughly 43% of the total market share, which is less than half of what it was at the start of the year.

Seasonality Fails to Lift Stocks

The long-awaited Santa Claus rally failed to materialize after Christmas, as U.S. stocks fell for the first time in six weeks. The large-cap S&P 500 Index declined 0.5% on Friday to close at 2,673.61. The Dow Jones Industrial Average was down 118.29 points, or 0.5%, to close at 24,719.22. Meanwhile, the technology-driven Nasdaq Composite Index fell 0.7% to 6,903.39.

Implied volatility, as measured by the CBOE VIX, rose to its highest level in nearly a month, a sign that the Trump-inspired equities rally was losing steam. The VIX closed at 11.04, which is still well below the historic average.

Even with the weekly decline, U.S. stocks closed out a stellar year, with the major indexes returning between 19% and 28%.

Commodities Rally

It was another solid week for the commodity markets. Oil prices rose to their highest level in two-and-a-half years on news of strong global demand and a bigger than expected drop in U.S. crude inventories. A report from Baker Hughes Inc. on Friday also showed the number of active oil and gas rigs declined this week, bringing the total number to 929.

U.S. West Texas Intermediate (WTI) for February delivery climbed 58 cents, or 1%, to $60.42 a barrel on Friday, its highest level since mid-2015. The U.S. futures benchmark added 12.5% for the year, and was up more than 41% from the yearly low. ICE Brent futures gained 71 cents, or 1.1%, to $66.87 a barrel. The international benchmark ended the year with a gain of 17%.

Gold also ended the year on a high note, with the February contract rising nearly 1% Friday to reach $1,309.30 a troy ounce. The yellow metal has gained in ten of the last 11 sessions, and is now trading at its highest since mid-October.

Commodities were partially supported by a weaker U.S. dollar, which declined on Friday to its lowest levels since September. The dollar index (DXY) retreated 1.3% during the week and nearly 10% for the year, rounding out its worst annual performance since 2003.

The Week Ahead

With the new year upon us, market participants are evaluating whether 2018 will be a continuation of the previous 12 months or whether it will present new challenges for cryptocurrencies and equities. Those questions won’t be answered in the first week of the year, as investors return from holiday and zero in on a steady stream of economic data.

Economists at the U.S. Department of Labor will issue their closely watched nonfarm payrolls report next Friday. The data series is expected to show another solid month of job creation for the world’s largest economy.

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 603 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 603 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 603 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 Is Getting Bullish

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Cryptocurrencies’ long road to recovery took a positive step this week, as bitcoin’s newfound stability resonated with the broader market. BTC clocked highs north of $7,100 on Wednesday, having recovered roughly $1,200 from its recent low. The leading digital currency has faded somewhat in the latter half of the week but continues to show signs of a bullish breakout, based on the technical charts.

On the adoption front, Yahoo Finance rolled out trading with three cryptocurrencies, giving laypeople easier access to bitcoin, Ethereum and Litecoin. Meanwhile, mobile payment processor Square secured a patent with the U.S. Patent and Trademark Office to develop a new cryptocurrency payment network.

Bitcoin’s $7,000 Test

Bitcoin is on track for a 6% gain this week, offering compelling evidence that the worst of the August bear market had passed. The leading digital currency first crossed $7,100 on Tuesday and continued on to fresh three-week highs on Wednesday. In doing so, BTC crossed the overbought threshold on the RSI, sending prices back down to the $6,800 range. It was there that bitcoin’s price found support near the 200-day moving average, based on the 4-hour chart.

Looking ahead, bitcoin is generating positive price action, with the 50-day moving average inching closer to the 200-day MA. A crossover could generate additional bullish momentum in the near term.

At current values, bitcoin is capitalized at $120 billion, which represents 53.3% of the entire cryptocurrency market.

Yahoo Finance Integrates Three Cryptocurrencies for Trading

Yahoo Finance this week integrated three cryptocurrencies into its online trading platform, a move that could hasten adoption of digital assets at the retail and institutional levels.

In addition to looking up vital statistics, users can now buy and sell bitcoin, Ethereum and Litecoin on the Yahoo Finance platform.  Although the announcement flew under the radar of major news outlets, its significance cannot be overstated. That’s because Yahoo Finance is the most popular personal finance website in the United States, based on monthly visits.

According to Statista, the website received 70 million visitors during the month of May, well ahead of MSN MoneyCentral, CNN Money and Google Finance. Sites like Motley Fool and Investopedia receive only a fraction of Yahoo Finance’s monthly visits.

Square Secures Patent

Mobile payments processor Square Inc. has secured a new patent that would allow merchants to accept payments in cryptocurrencies, possibly opening the door to wider acceptance of digital assets.

Square, which filed the patent in September 2017, was approved by the U.S. Patent and Trademark Office to begin developing the new system. To be sure, the patent is not just crypto focused but allows merchants to accept payments in any currency, including bitcoin and altcoins.

“The disclosed technology addresses the need in the art for a payment service capable of accepting a greater diversity of currencies … including virtual currencies including cryptocurrencies (bitcoin, ether, etc.)… than a traditional payment system in a transaction between a customer and a merchant, and specifically for a payment service to solve or ameliorate problems germane to transactions with such currencies,” the patent said.

Stocks Forge Ahead

U.S. stocks are rounding out their best August since 2014 thanks to strong earnings, pro-growth optimism and signs of easing trade tensions with China.

The S&P 500 Index returned to record highs for the first time since January, culminating in the longest bull market in U.S. history. The Nasdaq Composite Index also traded at fresh records, while the Dow notched new seven-month highs.

Wall Street and global stocks continue to trade in the opposite direction, as emerging-market risks weigh on key markets in Asia and Europe. All of Europe’s benchmark indexes registered heavy losses for the month of August, with the Euro Stoxx 50 Pr falling 3.5%. Mainland China’s CSI 300 Index plunged 5.2%.

The Week Ahead

Bitcoin’s road to recovery will likely see better days in the near future as the market shakes off its bearish bias. Activity in the futures market, coupled with the sharp decline in volatility, suggests that the worst may be over for the leading digital currency. However, investors shouldn’t expect linear gains quite yet.

Over time, August and September have been the worst months for stocks. Although Wall Street defied the August trend, a repeat performance in September will be more difficult to justify as trade volumes return to normal. The Federal Reserve’s rate-hike path is sure to spook some investors at a time when home sales are crumbling.

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 603 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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