Bitcoin has lost over $1000 during the course of the week, as investors continue to fret over additional regulatory action. The currency has broken some key levels to the downside, and the bears may be smelling blood. Other currencies have also been hit, and the roller-coaster of crypo volatility continues.
According to a recent article from Bloomberg.com, the Justice Department recently launched a criminal probe into Bitcoin price manipulation. According to the article, regulators are looking not only at Bitcoin but other currencies as well, and are taking a look to determine if traders are manipulating prices.
The article stated:
“The investigation is focused on illegal practices that can influence prices — such as spoofing, or flooding the market with fake orders to trick other traders into buying or selling, said the people, who asked not to be identified because the review is private. Federal prosecutors are working with the Commodity Futures Trading Commission, a financial regulator that oversees derivatives tied to Bitcoin, the people said.”
The latest regulatory scrutiny is another step by regulators to gain control of these markets, which some have said are full of misconduct. Crypto trading has already been banned in some jurisdictions, and is also already more heavily regulated in others.
Following Bitcoin’s crazy rise in 2017 to the 20k level, it is not surprising at all that many investors, some far more sophisticated than others, have been drawn to the crypto markets. Many investors, however, may not fully understand the risks involved in trading cryptocurrencies, and could even be putting too much of their investment capital at risk. Not only that, but expectations of another fast climb like last year could cause many investors to sell out before the cryptos potentially make a more sustained rise higher.
Bitcoin: Bitcoin has moved lower by over $1000 this week, declining from over 8.5k to less than 7.5k. The market is quiet heading into the long weekend, however, down some 1.62% on Friday. The currency is in a clear trend lower over the last month or so, and the larger time frames do not look much better. Thus far, the currency has not been able to push through significant resistance around the 9.5-10k level.
Bitcoin Cash: This crypto saw a drop from around $1280 to about $960 this week before seeing a bit of a rebound. Prices are back over the 1k level to finish out the week, however, the market could remain vulnerable to further selling next week. The bigger time frames do not look constructive at this point, and without a significant rally being seen sometime soon, the market could continue lower.
Ethereum: This crypto declined this week from about $720 to a low around $560 before the selling stopped. The currency is actually up by about a half percent to end the week, and appears to be trying to put together a bit of a bounce. Over the last few months, however, the chart could indicate some topping action and further declines may be seen without a significant rally to neutralize recent chart damage.
Ethereum Classic: This crypto dropped from about $18 this week to a low of less than $15 before staging a rebound. The larger charts, however, show what could be a rounded top, and the currency could potentially have to approach the $12 level before finding more solid footing. Like other currencies, the market may need to see some good news in order to bring back the bulls.
Litecoin: This crypto is down 2.75% on Friday, and looks as though it will end the trading week on a sour note. The currency has lost significant ground this week, and after putting a bounce together now seems headed for a retest of the recent lows. Like many other currencies, the longer-term charts are not looking great, and significantly lower prices may be seen before the currency finds a long-term bottom.
Ripple: This crypto was also on the defensive this week, and is down over 3% for the day. Like some of the other currencies, it made a low, rebounded, and now appears headed back to the recent lows. This type of price action could be indicative of further selling pressure in the days ahead. The ongoing lack of any fresh bullish catalyst will also likely weigh on the sector.
Bitcoin is ending the trading week on a sour note, declining by some 6.5%. The currency has broken some key support on Friday, and has fallen back below the 9k level. Some analysts have, however, sounded bullish again in recent weeks. The market may need to see a quick bounce to keep recent bullish momentum going.
Some analysts have suggested that the economics of producing new Bitcoins could have the currency reaching for new highs. In a recent article from Marketwatch.com, this idea was discussed in detail. The article stated:
In a Thursday research note, Fundstrat Global Advisors, one of the markets biggest crypto bulls, said the bitcoin mining price dynamics have the No. 1 digital currency on track to reach $36,000 by the end of 2019.
Mining efficiency is an important facet of the cryptocurrency market, and Fundstrat said that higher hash power—the processing speed required by computers to generate a bitcoin—will propel bitcoin to a new all-time high.
“We believe the current path of hash power growth supports a BTC price of about $36,000 by 2019 year end, with a $20,000-$64,000 range,” wrote Sam Doctor, head of data science research at Fundstrat.
The company notes that the price to break-even cost metric (P/BE) provides an important support level for those mining digital currencies.”
Although the long-term prospects of Bitcoin and other cryptos may still remain bright, investors may need to see more from them before price levels are able to stay elevated at higher levels. The repeated failures of the currencies to make a run back to previous all-time highs may be viewed as cautionary by new investors.
Not only that, but the ongoing rally in stocks as well as the recent bounce higher in the dollar are also likely having a bearish effect on the sector.
Bitcoin: Bitcoin is down some 6.5% on Friday after making a previous run towards the 10k level. The market was not able, however, to get trade above the psychologically important 10k level and has backed off once again. The weakness seen to end the trading week is also not a good sign for the bulls, and could potentially point to further weakness in the sessions ahead.
Bitcoin Cash: This crypto saw a drop of a couple hundred dollars this week and is down sharply on Friday afternoon, declining by nearly 12%. The market has been moving lower since a failed attempt at the $1800 level, and recent lower prices have inflicted some significant chart damage. The currency could be headed back towards the $1200 level before any serious buying interest picks up.
Ethereum: This crypto has been mostly range-bound between the $720 and $800 levels. It is, however, seeing some solid selling to end the trading week, down some 8.5%. Although the currency has been trending higher on the longer time frames, recent bearish price action has done some serious damage to the chart structure. Like other cryptos, the currency could see further selling in the sessions ahead if buyers do not step in quickly.
Ethereum Classic: This crypto is also seeing heavy selling to end the trading week. Although the market has not seen a big range lately, prices are down over 14%. The chart is now pointing lower again, and the crypto may not see any significant buying interest until prices push even lower. The $16 level may be the next potential string area for buyers.
Litecoin: This crypto has shed about $40 over the course of the week, and is also very weak going into the weekend. Longer-term chart structure is poor at this point, and the market could need to dip as low as $120 or so before finding a near-term bottom.
Ripple: This crypto was also on the defensive this week, and the bulls are not showing much interest. Now that the currency has been trading below the $.80 level, lower prices could be in store before finding a longer-term bottom. Prices may need to see $.50 or so before attracting more buying attention.
The volatility in cryptos has yet to slow down, and will likely continue in the absence of any fresh, bullish catalyst. Thus far, failed rallies have been disappointing. Strong buying on any dips could, however, be indicative of underlying market strength.
As Bitcoin once again eyes the 10k level, there seems to be a renewed sense of bullish optimism in the marketplace. A clean and sustained break above 10k could set the stage for another run at the previous all-time highs around 20k. Analysts continue to debate the reason for Bitcoin’s significant pullback, with some feeling that the retracement was simply normal and due to increasing regulation.
A recent article from ccn.com discussed the matter with Mati Greenspan, a senior analyst at eToro and a well-known bitcoin expert. he was quoted in the article as saying:
“I don’t know what’s going to happen in the future. I’m really not a fortune teller or anything like that. I believe that more than fear of regulation that decline from the $20,000 peak was more of just a normal retracement,” Greenspan said, emphasizing that an abrupt increase in value of an asset is often followed up with a retracement.
“Whenever the bitcoin price moves and jumps into a new order of magnitude, we need to see some sort of retracement on that. It’s the same thing that when it jumped up from eight cents to $3.50 then it had a retracement back to a dollar. That’s a very normal thing after that kind of leap. So if we look at it now I believe we are about five or six percent up over the price a year ago,” he added. The article went on to state:
“Several analysts over the past few months have stated that the correction of bitcoin from $20,000 to $6,000 is reminiscent of its slump in 2014, during a period in which bitcoin failed to recover for over 12 months following an initial 80 percent decline in value caused by the now-defunct cryptocurrency exchange Mt. Gox.
However, the market is in a different state and the global cryptocurrency exchange market has a daily trading volume of $30 billion. The liquidity and volume of the market are incomparable to the levels in 2014 and the involvement of institutional investors and large-scale retail traders has led to various public instruments such as bitcoin futures that have allowed the market to mature.
Most recently, CCN reported that Goldman Sachs, one of the largest investment banks in the finance sector, has officially decided to launch a cryptocurrency trading desk after teasing its entrance into the bitcoin market for well over six months.”
Bitcoin: The king of cryptos dominated much of the headlines again this week, as its recent bullish price action took the market to within earshot of the 10k level. Since moving from below the 9k level to over $9600 during the week, the market has been trading sideways for the last few sessions. This could simply be the market consolidating before it takes a serious run at 10k.
Bitcoin Cash: This crypto also saw gains this past week, moving from around $1,360 to nearly $1520. The market saw some significant buying later in the week, and may also be moving sideways before taking a run at higher prices. The market is looking very bullish on the longer time frames, and a fresh leg higher could be seen in the sessions ahead.
Ethereum: This crypto has also put in a solid showing this week, having moved higher from $640 to nearly $800. Like some of the other currencies, Ethereum is looking a lot more positive on the longer time frames. prices are trending higher, and any bullish developments could set the stage for a fresh leg higher.
Litecoin: This crypto still seems unable to mount another sharp rally, although price action this past week was constructive. The bigger time frame is starting to look more constructive, and the $160 to $165 area could be an important level of resistance that the bulls need to take out. A move above that level could see increasing bullish interest and a run higher.
Ripple: This crypto also saw some bullish buying this week, but has still not seen any exciting rallies. The market seems comfortable right now between $.75 and $.95, and has thus far not been able to retake the psychologically important $1.00 level. Without any fresh news of its own, this currency may need a broad and significant rally across the sector in order to draw more buyers into the market.
There has been a renewed sense of optimism in the cryptocurrency space this week, as some key currencies have made significant moves to the upside. Bitcoin is leading the charge higher, having retaken the key 9k level.
Some indications point to an increasing interest in trading Bitcoin and other currencies. A recent article from investopdia.com alluded to this as it discussed record-breaking Bitcoin futures volume on the CBOE Exchange. The author stated:
“The popularity of trading bitcoin futures contracts (XBT) continues to scale new heights. On Wednesday, CBOE, the dominant U.S. derivatives exchange providing bitcoin futures contracts, saw its highest-ever trading volume for bitcoin futures since the launch of trading in December. (See also: How to Invest in Bitcoin Futures.)
A total of 19,000 bitcoin futures contracts belonging to different expiry dates exchanged hands on CBOE on Wednesday. Some 18,210 bitcoin futures were traded for the next month May expiry, another 703 that exchanged hands belonged to the midmonth June expiry cycle, while the rest 87 were of the far month July expiry. No contracts belonging to August expiry were traded Wednesday.
Wednesday’s record volume was three times higher than the average daily trading volume (ADTV) of 6,600 XBT Bitcoin Futures. Since ADTV indicates liquidity, it has an indirect impact on the price of the security. Thinly traded instruments are usually avoided by the active traders, leaving only a few to deal in them with wide spreads visible in the quoted prices. Increasing ADTV indicates more market participants are interested in trading the security, leading to tighter spreads and better price discovery.”
A convincing move back higher in cryptocurrencies could potentially fuel even more interest, as both traders and investors look to ride the next wave higher. For now, the 10k level in Bitcoin could be a make or break level for the space.
Bitcoin: Bitcoin remains the center of attention in the cryptocurrency market, having recently moved back above the 9k level. The currency could now be eyeing key resistance in the $9800 area. A test of this level could set the stage for price action over the next several weeks or months. A clean break above could potentially fuel enough buying interest to see a move back to previous all-time highs or even beyond.
Bitcoin Cash: This currency is seeing a solid end to the trading week, moving higher by nearly 5.5%. The currency seems to like the $1200-$1440 range, and is nor far from testing the top of the recent range. Further buying pressure could send the currency back to recent highs over the $1500 level.
Ethereum: This cryptocurrency is up nearly 7.5% in early action Friday, looking to finish the trading week on a good note. After seeing a drop from over $700 to around $600 earlier in the week, the currency has been trending higher as the sector has gained some steam.
Ethereum Classic: Like its counterpart Ethereum, Ethereum Classic is also seeing some upside to end the week. The currency is up over 10% and could be poised to challenge recent highs around $22.50 in the sessions ahead. The larger charts for the currency are also looking more constructive.
Ripple: This cryptocurrency has traded in about a $.15 range this week. The chart is improving, but the currency has yet to put together a convincing rally that could draw further buying interest. recent price action has done a lot to negate the currency’s downtrend, however, and the next several weeks could be important if the currency is going to stage a major reversal.
Litecoin: Litecoin also spent much of the week trading mostly sideways, holding a range of about $20. The market bottomed out for less than $120 a few weeks ago, but has since shown some positive signs and is looking to improve its technical chart posture. Like several other cryptos, however, it has still lacked a significant rally that may draw buying attention.
The next few weeks could be key for the crypto space, as investors look to build upon recent gains. There will likely be some key technical tests ahead that the markets must overcome for the rally to continue.Perhaps the biggest test will be the 10k level for Bitcoin. A move above could potentially fuel buying across numerous currencies.
Bitcoin has had a nice run back to the upside in recent trade, and seems to have its sights set on the 10k level. The question likely being pondered by longs right now is: is the rally legit or is it simply a bull trap?
The answer to that question remains unclear, but a swift move to 10k or above may put investors at ease. Given the currency’s recent volatility, there has been more discussion about diversification recently, and why it may make sense to add other currencies in addition to Bitcoin.
A recent article from forbes.com highlighted the need for currency diversification. The article stated:
“Investors looking to venture into the cryptocurrency market may want to set their sights on buying alternative crypto assets as opposed to just buying Bitcoin. Bitcoin is coming off of an all-time high of just under $20,000 and currently trades at a price of $8,200. Should Bitcoin return to its previous all-time highs, investors that purchase today will receive an ROI of 140%. That’s not bad if you’re comparing this return to the average returns in the equities market, for example.
But there are many other crypto assets that have the potential for greater ROI should they return back to their original all-time highs. Investors may want to take a closer look at Ripple’s XRP, a blockchain solution that has the potential to revolutionize the banking system as we know it. Currently trading close to $0.70 coming off on an all-time high of just over $3.30, XRP has the potential to gift investors with a whopping 300% return, if the asset makes its way back to its peak. It’s very well possible!”
Bitcoin: This crypto has been trending higher and the bulls may have their sights set on the 10k level. Trade at or above this level would represent a vindication of sorts for the bulls, and could potentially pave the way for a return to previous all-time highs. Such a climb may, however, be at a slower pace this time around. That could be a good thing, however, as the market may not appear to be as “bubbly” as it did previously.
Bitcoin Cash: Bitcoin Cash is up over 12% in early action Friday, and looks poised to end the week on a high note. The market has shown some strong bullishness this week, making a rapid move from around the $800 level to nearly the $1100 level.
Ethereum: This crypto has also been moving higher as buyers seem to be excited once again. The currency has covered nearly $100 to the upside in recent days, and a strong finish to the trading week could set the stage for further gains next week.
Ethereum Classic: The classic has been seeing some upside as well, but thus far the bulls have not been able to put together an exciting rally. The market has traded mostly between the $14 and $20 levels, without any sharp moves higher. That being said, however, the market does look like it could be forming a rounding bottom on the longer-term charts. A nice pop in volume or a big sector-move higher could potentially see a nice bullish breakout.
Litecoin: This crypto looks ready to end the week on a high note as well, and is challenging the $150 level. Like some other cryptos, this currency has not been able to mount a very convincing rally in recent months. The bigger charts do, however, show what could be considered bottoming action. This could lead to higher prices in the weeks and months ahead.
Ripple: This crypto is up almost 17% in early action on Friday, and appears headed for a very nice finish to the trading week. Granted the currency is still trading for less than $1.00, but recent price action looks bullish. A strong move above the $1.00 level could attract a lot more buying attention.
The past week has been a big win for most cryptos, and could point to higher prices in the sessions ahead. You could make the argument that perhaps, at this point, the cryptos have worked out much of the “froth” that was seen previously. This could potentially point to a slower, yet more sustainable move higher in price.
Price action in Bitcoin and other key currencies next week could provide some important clues as to whether or not the recent upside is sustainable.
Some of the cryptocurrencies have seen renewed buying interest this week. Bitcoin, in particular, has had a great week, moving back above the 8k mark. The buying this week has some analysts suggesting that the currency will be back at 10k in no time.
Numerous geopolitical concerns could be playing a role in the recent surge in cryptos, and the dollar index is also still on weak footing. Despite many of the ips and downs seen in the cryptos over the last few months, some investors remain steadfast in their bullishness, looking for significantly higher prices in the months and years ahead.
The idea of Bitcoin even reaching a level of $250,000 was recently floated by billionaire Tim Draper. In an article from ccn.com, Draper alluded to such a level being reached by 2022. The article stated:
“Tech billionaire Tim Draper, an avowed cryptocurrency bull, has set a $250,000 bitcoin price target for 2022.
Draper made the bold prediction April 12 at the 2018 Block (Chain) Party at his self-named Draper University in San Mateo, California.
“I’m thinking $250,000 a bitcoin by 2022,” Draper said (via Reddit). “Believe it. They’re going to think you’re crazy, but believe it. It’s happening and it’s going to be awesome!”
Draper has a fairly good track record for predicting bitcoin price movements, so market observers aren’t taking his bullish forecast lightly. In 2015, the venture capitalist accurately predicted that bitcoin would top $10,000 by the end of 2017. BTC prices soared above $13,000 on December 31, 2017.”
A recent article from marketwatch.com also discussed what could be an improving outlook for Bitcoin. The article stated:
“Thursday’s action also marked the biggest intraday move since Feb. 6, when the cryptocurrency saw a move of 29.4%. Around 3 a.m. Eastern on Friday, bitcoin went from $7,813.41 to $8,171.58 over the space of an hour, and has held on to the bulk of that move up.
Bitcoin had spent the best part of the two weeks in tight sideways trading, up to Thursday. For the week, the cryptocurrency is looking at a gain of 21.33%. Some said the sharp move higher on Thursday was due to the fact that investors who had shorted bitcoin, betting on it to fall, got squeezed and were forced to buy it back.
“Analysts consider that there is a positive feeling among traders for the past few days which could open room for higher grounds. We see the case for bitcoin to continue to rise, as long as positive headlines reel in,” said Peter Iosif, senior research analyst at IronFX, in a note to clients.”
Bitcoin: The king of cryptos dominated much of the headlines this week, as it saw a strong rebound this week. Prices started the week off around the 6.5k level before seeing string buying enter the market late in the week. The currency is set to finish the week on a strong note, at nearly $8100.
Bitcoin Cash: This crypto also saw strong gains on the week. The currency was moving sideways around the $640 level before buyers stepped in, fueling a rally up to over $762. The market is up nearly 8% on Friday, and could see further upside next week.
Ethereum: This crypto also followed the general trend higher, staging a sharp rally from less than $375 to over $500. Like the other currencies, a strong week could potentially point to further upside in the next several sessions.
Ethereum Classic: This crypto has not seen as much upside this week, and seems to be like it around the $14.40 level. The currency did see a bit of a lift as the sector took off, but has not been able to put together much in the way of follow-through.
Litecoin: This crypto has moved up from the $115 area to over $130, but still can’t seem to put together a significant and convincing rally. After trending lower for some time, the market does appear to have found a bottom around the $120 level. Perhaps this area will prove to be a long-term bottom.
Ripple: This crypto is up over 20% on Friday and has moved from around $.50 to nearly $70 this week. Like many of the other currencies, the gains seen may be more a function of rising sentiment than anything else. A very strong finish to the trading week could point to more upside in the sessions ahead.
Bitcoin has remained under pressure for some time now, and the currency recently failed to hold some key levels that suggest even lower prices may be in store. In fact, Bitcoin is now potentially setting its sighs on the 6k level, a long ways from last year’s highs near 20k.
One of the themes that has been discussed with increasing frequency is that Bitcoin and other cryptos are currently undergoing a major shift. That is to say that many of the wanna-be crypto millionaires have finally given up, and short-term traders may have largely thrown in the towel as well.
In a recent article from Marketwatch.com, some have suggested that such a shift may be a good thing for the long-term prospects of the industry. The article stated:
“The days of overnight bitcoin millionaires are coming to a close. As the price of the No. 1 digital currency continues to fall — declining more than 40% in the first quarter — the crypto hall of fame is fast becoming a hall of shame.
While the story of Erik Finman, who became a millionaire after buying bitcoinBTCUSD, -2.25% with a cash gift from his grandmother in 2011, is nice, for those fundamental believers in the decentralized technology, the fewer day traders flipping digital currency for a quick profit, the better.
“It has been this correction that’s been mainly responsible for an evolution in investor attitude. I believe that now the overwhelming majority of investors do not view cryptocurrencies as a way to make a fast buck, as perhaps previously many more might have done,” said Nigel Green, founder and chief executive at deVere Group, in an email to MarketWatch.
“Rather, they are now investing in Bitcoin, Ethereum, Ripple, Dash and Litecoin, among others, as they can see the core value over a longer time horizon.”
It’s a “seismic shift,” according to Green.”
The recent weakness in the currencies could potentially pave the way for more long-term buying interest, the only question may be at what price levels.
Bitcoin: This cryptocurrency spent the week moving mostly sideways between 6.5 and 7.5k. After another major decline lower, the currency is still looking to find a bottom. According to some analysts, such a bottom may not be found until the currency reaches 4k or less.
Bitcoin Cash: This crypto has moved between $600 and $720 and thus far has not shown any significant signs of a turnaround. The currency remains in a firm downtrend on the long time frame as well, and could see prices below $500 before finding a long-term bottom.
Ethereum: This crypto is under some moderate pressure on Friday, down over 4% on the session. The market could be headed considerably lower before finding more solid footing. The currency did spend a lot of time around the $250 level previously, and could target a return to that level.
Ethereum Classic: This crypto had traded between $16 and $32 for a period of time, but now seems to be breaking down into a lower price range. Like other cryptos, the currency has been weighed down by the notion of tighter regulation and has simply lacked any significant bullish inputs to fuel a sustainable rally higher.
Litecoin: This crypto saw prices range from $132 to $116 this week, and is now moving slightly lower to close out the week, down nearly 5% on the day. This crypto originally broke out from the $80 level, and it could be headed back to that level before finding a more sustainable bottom.
Ripple: This crypto has also been under pressure, and is down several percent on Friday to finish the trading week. The currency has not been able to put anything together in terms of upside price action since out climbed to over $3 a few months ago. Like other cryptos, the ongoing lack of any bullish catalyst has weighed on the currency, and the notion of further regulatory scrutiny has also been a factor.
Although there has not been much to cheer about in the crypt space recently, the currencies could be another major step closer to finding a long-term bottom from which they may make a more sustainable climb higher. In addition, as more and more uses are discussed in the cryptocurrency space, the currencies may start to garner more interest from long-term investors.
Cryptocurrencies continued to see selling pressure this week, and with the technical picture growing even more bearish, further selling may be seen in the sessions ahead. Bitcoin in particular is having a rough year thus far, and it seems to be dragging down other cryptos along with it.
According to an article by money.cnn.com, Bitcoin has shed about 50% of its value so far this year. The article states:
“The digital currency has slumped roughly 50% since the start of the year, dropping below $7,000 on Friday morning in Asia. Less than four months ago, it was trading close to $20,000.
The latest losses follow moves to step up regulation of cryptocurrencies in Europe and Asia.
In Japan, two virtual currency exchanges closed down this week amid increasing scrutiny from the country’s financial services watchdog. The trading platforms, Mr Exchange and Tokyo Gateway, both failed to secure a license from Japan’s Financial Services Agency.
The “regulatory clampdown in Japan is a massive negative,” said Stephen Innes, head of Asia-Pacific trading at currency broker Oanda.”
The heavy selling seen in Bitcoin and its epic fall from the highs seen just a few months ago has been a major weight on the asset class as a whole. It is quite likely that cryptos will not be able to mount much of a turnaround unless Bitcoin is able to turn the tide. One positive from the ongoing selling, however, is that the market has now likely driven out many of the speculators that helped fuel a rapid price rise to 20k. With many of the speculators out of the market, it may potentially be able to find a bottom and begin a more sustainable ascent higher.
Bitcoin: The king of cryptos dominated much of the headlines this week, as its recent sell-off continued. The market declined over the last week or so from around the 9k area to less than 7k. Some previous key technical levels have now been broken, and the deteriorating technical picture could invite even more selling before a long-term bottom may be found. On the flip side, however, Bitcoin may be closer to to such a bottom now that many of the specs and weak longs have likely been shaken out of the market.
Bitcoin Cash: This crypto also saw declines over the last week, dropping from over $900 to less than $700. Friday as a nasty day for the currency, as it saw a decline of nearly 9% as the selling accelerated. Certainly the pressure on Bitcoin has been a part of the negative sentiment in this and other cryptos, but it is also simply lacking any fresh bullish inputs currently to mount a significant rally.
Ethereum: This crypto declined from around the $550 level to less than $400. Price action this past week was definitely bearish, but the bigger picture is also likely alarming to investors. The market remains in a firm downtrend, and has thus far shown few signs of a possible turnaround.
Ethereum Classic: This crypto also saw selling as broad-based pressure took the sector lower. This crypto did, however, break lower from its previous trading range of $16-$22. The market ended the week around the $14 level, and looks as if it could be on the verge of another significant leg lower in value.
Litecoin: This crypto seems unable to mount another sharp rally, and recent action could suggest more weakness ahead before a market bottom may be found. The currency is in the midst of a strong downtrend, and the ongoing lack of any fresh bullish inputs may fuel further selling.
Ripple: This crypto is now trading at less than $.50, and the chart looks weak. Given how far prices have fallen and the fact that the currency is valued at a low level, it simply does not have much further to fall. Although the currency could technically go to zero, it may find buyers willing to scale into long positions as prices continue to decline.
The past several weeks have been very challenging for the cryptocurrency markets. Despite the significant declines in price, however, some of the current price levels could potentially represent an excellent long-term value for the patient investor. In addition, with much of the market’s “frothiness” now removed, prices may be able to begin to build a long-term base from which values may potentially begin to climb again.
Bitcoin and other cryptos continue to have a difficult time breaking out above key resistance levels. Bitcoin has stubbornly remained under the 10k mark, and seems to have found some equilibrium around the $8500-$9500 range.
Concerns over a global trade war have been significantly exacerbated this week, as the Trump Administration imposed tariffs on Chinese goods. China, in turn, fired back, listing 128 U.S. products that could potentially see a duty imposed. The potential for a global trade war has called into question Bitcoin and other cryptos’ role as a safe haven asset.
Bitcoin has not exactly had a stellar week, in which it could potentially have seen much stronger buying interest given the current geopolitical climate. A recent article from forbes.com After discussing how Bitcoin behaved following some other crises, the article questioned why it is not acting as a flight to safety instrument currently. The article stated:
“So if the digital currency’s price benefited from these crises, why has it been pushing lower as concerns of a trade war circulate?
The simplest answer to this query me be this: while Bitcoin has acted as a safe haven at some points, it isn’t functioning that way now.
This situation may largely be the result of Bitcoin not having the same liquidity as gold, another safe haven asset, said Mati Greenspan, senior market analyst for social trading platform eToro.
“Traditional assets like gold have a lot more liquidity Bridges and gateways that facilitate flows to and from stocks, bonds, and ETFs,” he noted.
“Bitcoin doesn’t have that framework in place just yet,” which makes it more difficult for investors to take money out of stocks, for example, and put them in to the digital currency. ”
The issue of market liquidity is certainly a big one. Investors who look to pull money from equities during periods of high volatility or crisis tend to look to put that capital to work elsewhere, and in a hurry. Bitcoin and other cryptos simply do not yet have the necessary infrastructure to facilitate such rapid and easy movement of capital. Until they do, they may not benefit from rapid flight to safety buying.
Bitcoin: After seeing a decline to less than 7.5k earlier in the week, Bitcoin has rebounded, moving over the 9k mark at one point. The market had a difficult time maintaining upside momentum one again, however, and has since dipped back down to under $8600. The currency appears to be comfortable in its recent range, and may need to see considerable buying strength in order to break above recent resistance.
Bitcoin Cash: This crypto saw a decline early in the week to nearly the $840 level, before seeing a strong rebound back towards $1080. Like Bitcoin, however, it has failed to maintain recent strength, and is trying to hold above the $1k mark going into the weekend.
Ethereum: After a brief dip to less than $480, this currency seems to have found some equilibrium in the $520-$550 range. It is down about 1% on Friday, and is trying to maintain trade above the $500 level. A break below this key area could signal a fresh and possibly significant leg lower in price.
Ethereum Classic: This crypto seems to be just fine trading between the $16 and $22 levels. The market has been trending lower on the larger time frames, however, and a break below the $16 level could trigger another fresh leg lower in price
Litecoin: This crypto seems stuck under the $200 level, and has spent much of the week oscillating between $160 and $170. On the larger time frame, recent market action does not look very encouraging. The market has spent the better part of three months moving sideways, and thus far has not shown any significant strength.
Ripple: This crypto has also been mostly range-bound, and has lacked any major rallies since it traded to about $3.20 a few months back. The longer-term charts do not look very constructive, either, as the last several weeks have seen mostly sideways action.
All of the cryptos seem to be lacking any significant bullish catalyst to take prices sharply higher from recent levels. The markets may simply have to trade sideways for a period of time, until more is known about potential regulation and there are more indications that economic use will continue to grow.
Bitcoin and numerous other cryptocurrencies have had another trying week, with Bitcoin set for a weekly drop in the double digits. The markets are being weighed down by many of the same influences that have brought prices lower in recent months. The idea of further and tighter regulation has been a major catalyst for the selling seen in recent months, and there could be more downside to go before the cryptos find a long-term base.
According to a recent article from wsj.com, the IRS last year took steps to clamp down on crypto investors. The article stated:
“Pay your taxes on bitcoin…or else.
Late last year, the Internal Revenue Service persuaded a federal judge to require Coinbase, a San Francisco-based digital-currency wallet and platform with about 20 million customers, to turn over customer information. Driving the IRS’s decision was its belief that few bitcoin investors appear to be paying taxes due on sales. The court order is one of the agency’s first moves as it clamps down on cryptocurrency scofflaws.”
It is important for long-term investors to keep in mind that regulatory action as well as interest from the IRS should come as no surprise. In fact, these steps are necessary for cryptos to eventually become a widespread, mainstream and legitimate form of currency.
In addition,the recent downside and volatility in crypto prices may even shake out some of the larger speculators in these markets, paving the way for a more sustainable run higher in price. Although holding currencies through such volatility may not be the most pleasant thing, long-term investors must view the market with patience and “see the forest through the trees.”
On the plus side, a recent article from nbcnews.com suggested that cryptos may take on a much larger role. It stated:
“As popular as they have become, virtual currencies may soon play an even bigger role in our financial lives. In part over fears that existing cryptocurrencies (which operate independently of governments) will make it harder to detect tax evasion, Sweden, Canada, China and other nations have announced plans to launch their own official virtual currencies. In the case of Sweden, that could come as soon as 2020.
Though recent research suggests there’s not yet a shift away from cash, experts say a mix of independent and national cybercurrencies could eventually displace the coins and paper notes that people have been using for thousands of years.”
Bitcoin: Bitcoin is down some 10% on the week, but is seeing a nice bounce on Friday to end the trading week, up nearly 5%. The market seems to have found a range between 8k and 10k, and has been oscillating between these two levels. Eventually, however, the market will breakout one way or the other, and when it does it could potentially see a substantial move.
Bitcoin Cash: This crypto has been on a roller-coaster ride this week. The market saw a decline from well over $1100 down to about $880 before seeing a substantial bounce higher. The market is up over 14% on Friday, trading around the $1050 level. Today’s powerful move could potentially be indicative of more buying next week.
Ethereum: This crypto saw a drop from over $730 to around the $600 area, where it has spent the last few sessions. The currency is up slightly on Friday, but has thus far not put together a powerful rebound like some other cryptos. A lack of buying could keep it vulnerable to further selling pressure next week.
Ethereum Classic: This crypto declined from almost $23 to about $16 before finding some buyers. The market has since bounced back to over the $18 level, but is not showing much excitement.
Litecoin: This crypto has seen more of a slow downtrend this week, finding a bottom under $160 before seeing a bit of a bounce. It is having a decent showing on Friday to end the trading week, back near $170 and up nearly 5%.
Ripple: This crypto has spent much of the trading week moving sideways, first around the $.80 level then around the $.70 level. Although it is up over 4% on Friday, there does not appear to be a lot of enthusiastic buying taking place. The currency may stay sideways to lower in the next few sessions.