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Week in Review

Weekly Recap: Bitcoin – Beaten, but Not Broken

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It was a week of mega selloffs for cryptocurrencies, as the fallout from regulatory indecisiveness and an apparent cash-out of ICOs dragged the market to its lowest level of the year. The total value of crypto assets bottomed near $189 billion on Monday, possibly signaling the death knell for a large segment of tokens listed on CoinMarketCap.

Despite the latest string of dramatic moves, bitcoin has managed to defend – on multiple occasions, we might add – a key support level commonly associated with the bottom threshold of mining profitability. By the end of the week, the bitcoin price was back above the 50-day moving average and looking poised to break-out of its latest rut.

For altcoins, the picture is less clear. Investors are becoming increasingly risk-averse to this asset class, which now represents less than 48% of the total market.

Crypto Investors Seek Refuge in Bitcoin

A non-decision by the U.S. Securities and Exchange Commission (SEC) earlier this month regarding a highly-touted bitcoin ETF triggered a massive selloff of cryptocurrencies. By Monday of this week, the panic sale had morphed into a widespread cash-out of initial coin offerings (ICOs), with altcoins and tokens registering double-digit declines across the board.

Although bitcoin was affected by the market-wide selloff, the leading digital currency emerged with as much as 54.5% of the total capitalization, a sign investors were seeking refuge from more speculative altcoins. The bitcoin price came within $100 of yearly lows, but quickly returned above $6,000 and now sits just below $6,500 on Bitfinex.

Bitcoin’s bullish bias has only strengthened in recent days, a sign that a return to $7,000 is likely in the short-term. Whereas $6,000 has offered a sturdy floor for the bitcoin price, $7,000 has emerged as a psychological barrier amid the recent downturn.

Astonishingly, the bitcoin price is at break-even for the week, with CoinMarketCap even reporting a slight gain compared with seven days ago.

Ethereum, which was down by as much as 36% week-over-week, has trimmed its seven-day loss to 16%. The developer’s cryptocurrency was at the center of the recent selloff, possibly signaling a large-scale exodus from ICOs.

Lira Recovers from Record Lows

The Turkish lira rebounded from record lows this week after Qatar announced an emergency loan package to shore up the country’s struggling financial sector. The lira collapsed earlier this month after the United States doubled down on commodity tariffs against Ankara and imposed fresh sanctions targeting key members of its government.

Turkey was back in Washington’s crosshairs on Friday after the Trump administration threatened to impose more economic sanctions if it does not release a detained American pastor being held on suspicion of espionage.

Turkey’s crisis has triggered widespread selling in other emerging markets amid fears of contagion. Emerging-market stocks and currencies suffered swift blows as a result.

Oil Hits Two-Month Lows

Crude oil is coming off one of its worst weeks in recent memory after U.S. government data showed an unexpectedly large build-up in commercial crude inventories resulting from higher than expected imports. Meanwhile, Saudi Arabia confirmed that it raised crude output in July by an average 200,000 barrels per day.

U.S. West Texas Intermediate (WTI) futures settled at $65.01 a barrel on Wednesday, the lowest since June 6.

Surging Dollar Rattles Gold Price

The price of gold plunged this week to its lowest level in 19 months, as investors parked assets in the U.S. dollar and Treasuries.

Gold futures fell below $1,180 a troy ounce on Friday, marking a 14% reversal from this year’s peak. Silver suffered a similar fate, falling more than 4% this week to its lowest since January 2017.

Precious metals crumbled as the dollar rose to 13-month highs against a basket of its peers. Assets like gold and silver are priced in greenbacks, which makes them less attractive for foreign buyers when the dollar rises.

The Week Ahead

Despite the recent correction in cryptocurrencies, the bulls aren’t out of the woods yet. Although bitcoin has managed to hold key support, the broader altcoin universe faces an uphill battle regaining lost market share. Against this backdrop, investors should be keeping close tabs on Ethereum to gauge the market’s outlook on tokens emanating from the recent ICO boom.

In conventional markets, concerns surrounding Turkey and China will be on the front burner next week. Volatility on both of these fault lines has triggered renewed interest in the U.S. dollar, which is currently trading near one-year highs.

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 604 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 604 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 604 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 604 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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