Cryptocurrency Weekly Market Performance Report (6th August — 12th August 2018)
Written by Abhy Singla.
Cryptocurrency Market Performance
Previous week’s overview (23rd July ’18–29th July ’18)
All the major cryptos are trading in the red. In recent weeks, it had seemed that digital tokens like Bitcoin were finally coming out of a long-standing slump. BTC, which had tended to float between about $6,000 and $7,000 for many weeks, finally managed to rise up above that upper threshold, even ascending beyond $8,000 last week.
According to data from CoinMarketCap, every one of the top 10 digital currencies by market cap has declined in value across this week. BTC is trading at $7,010.94 at the time of writing.
Around $30 billion has been wiped from the total market capitalization of top 10 cryptocurrencies over the week.
Current week’s overview (30th July ’18–5th Aug ’18)
Like the previous week, this week also brought dismal news for crypto investors. Some of the largest and most popular digital currencies in the world saw declines overall, with nearly all of the top 20 coins and tokens dipping this week. Bitcoin, which just recently ascended the $8,000 mark, dropped below $7,000 on 6th August and further went down below $6500 mark towards the end of the week (12th July).
As of this writing, BTC is hovering just above $6,300. All the other currencies like Ripple, Ethereum and others ended the week in the red as well.
Possible reasons for market movement
Some of that decline was likely the result of news out of the SEC both last week and this week, which signaled trouble with the approval process for the first Bitcoin ETF.
On August 10th, SEC had to reveal its decision on the petition for a Bitcoin-linked ETF by VanEck and SolidX. In spite of recent rejections of Bitcoin ETFs, including a second failed attempt by the Winklevoss brothers last week, many analysts have seen VanEck’s fund as uniquely likely to meet SEC approval. On 11th August, though, the SEC revealed that it was pushing back the decision which further delayed the approval of BTC’s ETF.
Also, a new study from Yale University explained the erratic and unusual price movements of Bitcoin. Although much of the initial hype among the mainstream investment world has settled, the world’s largest digital coin by market cap is still prone to massive volatility. The study, which tracked 7 years’ worth of price movements, suggests that momentum and investor perception are key influencers on the price of BTC. If the price of the currency goes up or down by a significant margin in one week, that movement in and of itself makes it more likely to continue in the same direction the next week. In light of this, last week’s decline in BTC may have also contributed to this week’s movement downward.
Developments over the week in Cryptomarket
- Cryptocurrency exchange platform, Shift Markets announced a new partnership with Lightyear which will be aiming at incorporating Stellar Lumens (XLM) into cryptocurrency markets. The information was passed via Twitter, which confirmed that the new collaboration will make it possible for everyone to access XLM directly without the need for the holders to purchase Bitcoin (BTC) at the beginning.
- On August 9, 2018, IBM and supply chain juggernaut Maersk has added 92 clients to their blockchain platform in a bid to revolutionize global shipping using blockchain technology.
- XRP is gaining a lot of traction as a new base currency. San Francisco-based, DCEX exchange added XRP as the base currency on its crypto-to-crypto trading platform. An Indian exchange Unocoin has also done the same thing. Before this, Bitrue has added XRP as its base currency.
Bitcoin (BTC) Trend
This week, there were heavy losses in Bitcoin price from well above the $7,100 level against the US Dollar. The BTC/USD pair fell and broke many supports like $7,000, $6,830, $6,500 and $6,200. The price tested the $6,000 support zone where buyers appeared. A low was formed at $5,982 and later the price started an upside correction towards the $6,500 level. The pair must stay above the $6,100 level to stay in the positive zone and recover higher.
Bitcoin price has decreased over the week and is trading marginally above $6,300 at the time of writing (12th August). BTC price decreased from $6,952 at the beginning of the week (6th August ) and reached $6,354 by 12th August, a decrease of 9% over the week.
The average transaction value of Bitcoin is $25 million and volume is $4 billion at the time of writing.
Source: CoinMarketCap
Ripple (XRP) Trend
The price of Ripple (XRP) has decreased over the week and is now trading in the range of $0.30- $0.40. The market cap now stands at $12,137 million. The total week’s performance settled at -26%.
There was a slow and steady decline towards $0.31 in Ripple price against the US Dollar. XRP managed to hold the $0.3199–0.3200 low against the US Dollar on 8th Aug’18. The XRP/USD pair later started an upside move and recovered above the $0.3350 and $0.3400 resistance levels. However, the upside move was capped by the $0.3550 and $0.3560 resistance levels.
XRP ended the week in the red with the price falling from $0.41 on 6th Aug’18 to $0.31 on 12th August. The per day number of transaction of XRP stands at 684 million and volume is $208 million at the time of writing.
Source: CoinMarketCap
Ethereum (ETH) Trend
ETH decreased this week and traded at around the $300 — $400 mark. Ethereum (ETH) has shown a bearish signal, declining heavily versus the US Dollar and Bitcoin. ETH/USD remains in a bearish zone as long as it is below $400.
The total week’s performance settled at -19%. The price was $407 on 6th August and it gradually decreased to $328 towards the end of the week (12th August).
This week, there were heavy losses noted in ETH price once it broke the $400 level against the US Dollar. The ETH/USD pair declined sharply and broke many supports such as $380, $350 and $320. The price is just below the $330 level at the time of writing (12th Aug).
The per day number of transaction of ETH stands at 657 million and volume is $1,715 million at the time of writing.
Source: CoinMarketCap
Bitcoin Cash (BCH) Trend
Bitcoin Cash price is consolidating with tiny recoveries against the US Dollar. BCH/USD must break the $620 resistance to recover towards $650. After trading as low as $556, Bitcoin Cash price started a minor upside move above $570 against the US Dollar. The BCH/USD pair managed to move above the $580 and $600 resistance levels on 8th and 9th August. However, the upside move faced a strong resistance near the $620 level. The price is currently moving lower and is trading below the $600 level. On the downside, there is a decent support formed near the $565–570 zone.
The total week’s performance settled at -16%. The price decreased from $693 on 6th August to an intra-week low of $567 on 11th August. BCH is trading at $579 with a total market cap of $9,976 million at the time of writing.
The per day number of transaction of BCH stands at 18 million and volume is $342 million at the time of writing.
Source: CoinMarketCap
Top Ten Cryptocurrencies (29th July — 5th August)
The market cap of cryptocurrencies is a product of the volume of the currency and its price. The top 10 cryptocurrencies comprise almost 85% of the total market cap of cryptomarket at the time of writing. Over the week, the market cap of top 10 cryptos decreased from $213 billion on 5th August to $183 billion on 12th August, a decrease of almost 14%.
*Monero (XMR) has replaced IOTA and entered the top 10 cryptocurrencies at the time of writing. It jumped to 10th spot pushing down IOTA (MIOTA) to the 12th spot with a market cap of $1505 mn. Tron (TRX) holds the 11th spot with a market cap of $1519mn & Monero’s market cap stands at $1551 mn at the time of writing.
Conclusion
The cryptocurrency markets continued to upset investors this week with most currencies registering losses. BTC is down by around 9%, Ripple by 26%, Ethereum by 19%. At the time of writing the BTC price is around $6,300 which is well below the psychological seven thousand dollar mark.
However, over the last couple of days (11th — 12th August), the Bitcoin price has increased marginally, but declined and touched the $6,000 mark at the time of writing.
Ripple also staged a mini-recovery on Thursday (9th August) with the price rising by 5% to $0.35. However, it soon fell back at just over the $0.33 mark on Friday (10th August) and was trading at $0.31 at the time of writing (12th August).
Due to the overly strong downtrend of major cryptocurrencies, in order for the market to engage in a large mid-term bull run, the market would need to bottom out at a lower price range. On August 10, CCN reported that analysts see BTC testing a major support level at around $5,800.
“If the price movement of BTC in the short-term plays out the same way as February, April, and May, BTC will likely fall below $6,000 in the upcoming days, possibly bottoming out at $5,700 to $5,800, as several analysts suggested,” CCN reported.
However, failing to secure strong momentum in the higher region of $5,000 could lead BTC testing $5,500, which may lead to a further drop for the cryptocurrency market.
The vast majority of investors and analysts have struggled to offer specific reasons to support the sudden drop in the price of major cryptocurrencies on August 11. Some have pointed towards the Bitcoin exchange-traded fund (ETF) story, but given that positive development and news in the cryptocurrency sector have barely impacted the exchange market, there is no definite reason why the cryptomarket is giving a roller coaster ride to the investors.
Since February, Bitcoin has demonstrated a weird but an evident pattern. Bitcoin would plummet to $6,000, initiate a corrective rally, test the $10,000 resistance level, and fall back down to $6,000. In the past six months, Bitcoin has repeated this process three times, all within the range of $6,000 and $10,000 and on rare occasions, dipping below $6,000 and breaking above $10,000
Nevertheless, amidst a year of ups and downs, investors and enthusiasts alike are eagerly awaiting the decision on the SEC’s Bitcoin ETF. Some are hopeful that the ETF will boost markets while allowing Bitcoin to reach the coveted trillion-dollar market capitalization.
However, the dramatic fall started after the US Securities and Exchange Commission (SEC) moved the date when it would decide whether to approve a BTC exchange-traded fund (ETF) product. The market sentiment suffered as investors hoped for a regulated Bitcoin ETF to bring in new funds in the industry. Soon after the SEC announcement, Bitcoin started falling and gradually fell to the current level of around $6,300 mark.
There is no certainty which way the market would move as there is too much hype around this space. In these times, the market reacts abnormally. Investors need to understand that the cryptocurrency market is highly volatile and steps are being taken to regulate and bring some stability to the market.
Disclaimer:
This publication is provided by Invsta in good faith for general information purposes only. Information has been prepared from sources believed to be reliable and accurate at the time of publication, but this is not guaranteed. Information, analysis or views contained herein reflect a judgement at the date of publication and are subject to change without notice. This is not intended to constitute advice to any person. This does not constitute advice of a legal, accounting, tax or other nature to any persons. You should consult your tax adviser in order to understand the impact of investment decisions on your tax position. Past performance is not indicative of future results, and no representation or warranty, express or implied, is made regarding future performance. Cryptocurrencies are a highly volatile, high risk investment in which the value can change significantly. Before making any investment you should consider your own risk tolerance level and personal financial situation.
Originally published at blog.invsta.com on August 13, 2018.
