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Week in Review

Week in Review: The Two Tales of Volatility

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When it comes to volatility, stocks and cryptocurrencies diverged wildly this week. On the equities front, major selloffs in China and Wall Street were followed by equally large single-day rallies, as investors bought on the dip. For cryptocurrencies, the picture was largely unchanged for most of the week, as bitcoin and the broader market hovered near break-even.

Cryptos Stabilize

Despite experiencing a minor dip on Friday, cryptocurrency prices have held within a remarkably narrow range over the past five days. The cryptocurrency market capitalization, which accounts for all digital assets including bitcoin, has hovered around $210-$212 billion for much of the week. On Friday, the market dipped to around $207 billion as bitcoin fell below $6,500.

Tether on Monday induced heavy volatility in the market as traders cut ties to the controversial stablecoin. The value of USDT not only lost its peg to the dollar, it briefly fell below $0.90. A collapsing USDT triggered a sharp spike in the value of bitcoin, with major exchanges like Bitfinex reporting a large premium on BTC. That’s because Bitfinex, among others, processes a much larger volume of BTC/USDT trades.

Bitcoin’s volatility index, which tracks daily fluctuations in the digital currency’s opening price, is hovering below 1.9% over the last 30 days. Bitcoin’s average fluctuations over the last 120 days are 2.91%, according to bitvol.info.

China Takes the Plunge

Chinese equities resumed their massive selloff this week, as a U.S.-led trade war continued to roil mainland markets. An attempt by the People’s Bank of China to ease capital controls was also met by skepticism by investors who remain critical of the country’s long-term growth outlook.

As of Thursday, China’s benchmark Shanghai Composite Index was down a staggering 12% for the month of October. The index rebounded sharply on Friday, gaining 2.6%, as government officials offered soothing comments about the health of the economy.

The Chinese yuan fell to nearly two-year lows this week after the U.S. Treasury refrained from labelling the country a “currency” manipulator in its biannual report. The Trump administration has called out China for undercutting the yuan as a means of gaining unfair trading advantage over its peers.

Pressure on Saudi Builds

Saudi Arabia is in the hot seat after a known dissident journalist was reportedly drugged, tortured and killed at the Saudi consulate in Istanbul, Turkey. Jamal Khashoggi, the journalist in question, was last seen entering the consulate on Oct. 2.

U.S. President Donald Trump has moved closer to acknowledging Riyadh’s role in the disappearance of Khashoggi amid new evidence indicting Crown Prince Mohammed Bin Salman. A source familiar with the investigation has told CNN that Saudi Arabia’s first secretary was involved in planning the attack.

The Saudis have denied any involvement in Khashoggi’s disappearance but are prepared to admit that he was killed in the consulate. Earlier this week, Riyadh implicitly threatened to use oil as a weapon should Western powers pursue sanctions against it.

The Week Ahead

The crypto bulls failed to show up after Monday’s sudden accumulation, a sign that bear-market conditions are likely to persist for a while longer. A lack of trading catalysts, combined with negative sentiment already present in the market, are clear signals that prices will remain subdued as we head into the final week of October.

The outlook on equities is much more mixed, as investors weigh a new batch of corporate earnings against a backdrop of political and trade-related concerns. It also remains to be seen whether the Trump administration will take decisive action against the Saudis should conclusive evidence link the government to Khashoggi’s disappearance.

On the data front, the U.S. government will release preliminary third-quarter GDP data next Friday. The world’s largest economy is said to have expanded 3.9% between July and September, according to the latest Atlanta Fed GDP Tracker.

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 666 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: Hard Fork, Hash Wars and Crypto Mayhem

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A schism in the bitcoin cash community has unleashed chaos on the cryptocurrency market, threatening to undermine the resolve of long-term holders who may have forgotten what extreme volatility looks like following weeks, if not months, of unprecedented calm. The controversial split, which came into effect late Thursday, has resulted in all-out war between two competing blockchains vying for dominance of the bitcoin cash community.

In the process, bitcoin, altcoins and tokens have experienced one of the biggest selloffs of 2018, dragging the total market capitalization to its lowest in over a year. Although the worst of the selloff appears to have ended for now, uncertainty over the future of bitcoin cash continues to loom large.

Bitcoin Cash Splits

Shortly after 18:00 UTC Thursday, bitcoin cash officially split into two competing blockchains – raising the spectre of all-out war between Roger Ver’s ABC camp and the alternative SV protocol backed by Craig Steven Wright. The controversial split was activated at block number 556,766.

In the hours following the split, Bitcoin.com and Bitmain had already secured a combined hash rate that overwhelmed the mining power of the bitcoin SV side of the fork. In fact, Roger Ver tweeted Thursday that the Bitcoin.com pool “now has more hash rate on it than the entire BCH network had earlier today.”

While bitcoin SV has threatened a 51% attack on the ABC camp, industry statistics suggest this is not currently possible.

That said, the race for control of the bitcoin cash community is not over yet. Just five hours ago, Wright reminded the community via Twitter that the final marathon had not yet begun:

“In our hash competition, we have seen the ABC team bring on their strongest sprinters. We are just at the trials and not yet on the finals to Marathon and they have made a remarkable burst to do a 9.9 second 100m (unfortunately in the wrong direction).”

Crypto Market Plunges

Despite controlling a tiny fraction of the cryptocurrency market cap, bitcoin cash has had an oversized influence on how assets behaved this week. The value of all coins in plummeted by as much as $37 billion over two days, with all major assets in the top-20 recording double-digit percentage losses.

The crypto market bottomed around $175 billion, the lowest in over a year. Bitcoin’s price briefly traded below $5,200, its lowest since October 2017, following its biggest selloff since March. By Friday, bitcoin and the major altcoins had rebounded from their recent lows, though bitcoin cash was still nursing losses.

XRP and XLM are leading in the recovery on Friday; the former is trading more than 4% higher at the time of writing while the latter added nearly 8%. Outside the top-10, basic attention token jumped 15% and 0x added nearly 10%. Both assets were recently added to Coinbase, which allows traders to purchase them directly via fiat currency.

Trade Hopes Fade

U.S. stocks came under renewed pressure Friday after President Trump’s Commerce Secretary Wilbur Ross said a new China trade deal by January was virtually impossible.

In a Thursday interview, Ross tempered expectations that upcoming negotiations between President Trump and Chinese counterpart Xi Jinping would yield a new trade agreement. At best, the trade negotiation would result in a common “framework” that would guide both sides in resolving tensions. The face-to-face meeting will be held at the sidelines of the G20 Summit in Buenos Aires, Argentina Nov. 30-Dec. 1.

The S&P 500 Index finally managed to snap a five-day losing skid on Thursday, but markets were once again subdued at the end of the week. Plunging oil prices, risks to global economic health and a rollover in technology shares have placed downward pressure on markets this week.

The Week Ahead

The so-called hash war engulfing the bitcoin cash community is set to rage on next week, as the competing chains battle for market dominance. At the time of writing, bitcoin ABC remains in the lead with the SV camp failing to deliver on Wright’s egregious threats. However, things can change fairly quickly given Wright’s supposed control of large swathes of the network’s hash rate. Recent commentary by Roger Ver suggests that Bitcoin.com now has more hash rate than the entire BCH community had just hours before the hard fork was implemented.

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 666 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 Rally Runs into Resistance as Bitcoin Cash Hard Fork Nears

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Bitcoin fork

Cryptocurrency markets engineered an impressive rally through the midweek, with bitcoin cash and XRP posting massive gains on positive speculation concerning hard forks and business adoption, respectively. Over the past 48 hours, markets have lost a combined $8 billion in value, as profit-taking and overbought resistance tempered growth.

In traditional markets, Wall Street’s bulls re-emerged after a disastrous October selloff, with the S&P 500 gaining 3.5% so far this month. A divided Congress has fueled speculation that the Republicans won’t be able to implement sweeping reforms that could impact big business.

Crypto Rally Softens

The crypto markets were a sea of red Friday, extending a 48-hour retreat that knocked the majors from overbought territory. After gaining as much as 53% week-on-week, bitcoin cash had pared its seven-day advance to 27%, according to CoinMarketCap. BCH was last seen trading at $566, down sharply from a peak near $640 earlier in the week.

XRP also witnessed broad declines in the latter half of the week, paring its seven-day gain all the way down to 9%. The so-called banker’s cryptocurrency is back below $0.5000 at the time of writing.

Bitcoin was late to the BCH-inspired rally but still managed 18-day highs on Wednesday. The largest cryptocurrency by market cap has given back most of those gains and currently resides below $6,400.

The cryptocurrency market cap is currently valued at $212.2 billion, down from highs near $221 billion on Wednesday but well above week-ago levels. Daily trade volumes are back below $14 billion after hitting highs of $17 billion on Wednesday.

Stock-Market Bulls Make Their Return

U.S. stocks made big gains this week, adding to an already impressive November start that has contrasted sharply with the previous month. As of Friday, the large-cap S&P 500 Index was on track for a weekly gain of 3%.

Most of the gains occurred on Wednesday following the U.S. midterm elections, which saw the Republicans widen their majority in the Senate but give up control of the House. A divided Congress, it is believed, could force the Trump administration to compromise on a number of issues ranging from trade to immigration.

Stocks are coming off their worst month in at least seven years as mixed corporate earnings, elevated trade risks and slowing global growth undermined the bull market. The dramatic selloff pushed the major indexes to the brink of overt correction, with the CBOE VIX Volatility Index reaching its highest level in eight months.

Oil Enters Bear Market

Crude prices hastened their decline this week, with the U.S. futures benchmark Friday tracking its tenth consecutive down session on fears that global supplies will offset demand even with Iran sanctions in place.

U.S. West Texas Intermediate (WTI) broke below $60 a barrel Friday for the first time since February and is down 22% from last month’s multi-year high. With the loss, WTI has officially entered bear-market territory, which is defined as a loss of 20% or more from the most recent high.

Members of the Organization of the Petroleum Exporting Countries (OPEC) are meeting in Abu Dhabi this weekend to review current production strategies and decide whether a shift in output levels is warranted. Saudi Arabia and Russia, which is not part of the cartel, have already expressed plans to raise output to account for the loss of Iranian barrels.

The Week Ahead

The hard fork of bitcoin cash is scheduled to take place Nov. 15, with several exchanges already announcing support for the split. BCH holders on Coinbase, Binance and others can expect a one-for-one distribution of the new BCH token relative to their holdings 1-2 hours before the hard fork takes place.

Economic data are also in the spotlight next week, with the U.S. Department of Labor scheduled to report on the latest inflation numbers. The annual consumer price index (CPI) is forecast to reach 2.4% in October, up from 2.3% the month before. Higher inflation all but guarantees that the Federal Reserve will continue raising interest rates in December. The Fed implied as much Thursday when it voted to keep interest rates on hold but acknowledged broad improvements in the labor market.

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 666 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: Institutions Pivot to Crypto and Tron Outshines Its Peers

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After a noticeable setback on Monday, cryptocurrency markets stabilized later in the week as bitcoin returned to its predictable trading range and major altcoins pared losses. The institutional pivot toward crypto was perhaps the biggest newsmaker of the week. Not only are there signs that Goldman Sachs may finally launch a bitcoin trading operation, fellow Wall Street bank Morgan Stanley heralded cryptocurrency as a “new institutional asset class.”

Institutions Flocking to Crypto?

As Hacked reported this week, Goldman Sachs could be nearing the launch of a new bitcoin trading product, with early reports indicating a limited rollout of the new offering. According to The Block, Goldman has already signed up new customers for a non-deliverable forward product that will provide cash-settled exposure to bitcoin.

While Goldman appears to still be on the fence about bitcoin, Morgan Stanley issued a bold statement earlier this week declaring crypto to be the new asset class for institutional investors. In a report titled, “Bitcoin Decrypted: A Brief Tech-In and Implications,” the bank says blockchain technology has made surprise developments in recent years, paving the way for new crypto funds that are making it even easier for investors to enter the market.

Although the bear market is showing little signs of letting up, institutions are beginning to recognize the utility of digital assets and are likely to broaden their involvement in the sector moving forward.

Tron: The Standout Performer

Tron’s TRX token managed to break even during the month of October, defying a broad market downtrend that saw the likes of Ethereum, XRP and bitcoin cash post double-digit percentage losses. As it turns out, Tron’s hype machine is turning out favorable results following several key partnerships and acquisitions being announced.

That being said, Justin Sun was recently the center of controversy yet again after the Tron founder teased another high-stakes partner. That “partner” turned out to be Baidu, one of China’s largest cloud computing companies. However, as CCN reported, Tron is just a client of Baidu and not a partner in the conventional sense of the term.

While truth twisting appears to be the norm for Sun, his project is gaining steam. One of Tron’s largest decentralized applications, TRONbet, announced first-week payouts in excess of 300 million TRX. According to Tron’s official website, the platform has onboarded dozens of decentralized applications since launching the Tron Virtual Machine.

TRX recently secured a listing on CoinSuper, a Hong Kong-based digital currency exchange, a move that induced heavier than usual volatility for the token. As Hacked reported on Thursday, TRX’s sudden and sharp rally followed by an equally large drop has all the characteristics of a pump-and-dump.

Relief Rally on Wall Street

After their worst month in seven years, U.S. stocks are rising again thanks to a series of positive earnings calls and signs of a potential breakthrough on the U.S.-China trade rift. Bargain hunters have also rushed in to snatch up tech stocks pummeled by the month-long correction.

Investor sentiment was lifted on Thursday by a tweet from U.S. President Donald Trump, who said he had a long, productive dialogue with Chinese counterpart Xi Jinping. Both sides are attempting to bridge the gap on trade ahead of a face-to-face meeting in Buenos Aires, Argentina later this month. The Trump administration is pushing to get a new trade deal done by early December and a failure to do so would lead to new tariffs being issued.

Q3 is shaping up to be another positive quarter for U.S. earnings despite several disappointing results. As of last Friday, more than three-quarters of S&P 500 companies had reported better than expected profit results. More than half said third-quarter sales were better than expected.

The Week Ahead

From the perspective of trade volume and volatility, crypto markets remain on ice. Investors’ collective lethargy is unlikely to let up any time soon as debates over securitization and regulation continue to swirl. A lack of new buyers in the market will keep prices subdued until new fundamental developments inspire capital flows back into the crypto space. At present, there’s no sign of that emerging.

That being said, long-term holders of bitcoin have grown accustomed to longer market cycles. After all, the last bear market lasted several years. The difference this time is there are more people watching and more users invested.

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 666 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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