Weekly Cryptocurrency Market Performance Report (3rd September — 9th September 2018)
Written by Abhy Singla
Previous week’s overview (27th Aug ’18–2nd Sep ’18)
Nearly all of the top 10 digital currencies (by market cap) finished this week in the green with an upward price motion. Bitcoin Cash posted gains of more than 15% over the week, compared with its flatline result from last week.
Bitcoin’s price climbed by 5% over the week and ended the week above $7,000 mark, a critical threshold in the minds of some investors.
The only cryptocurrency in the top 10 which traded sideways or slightly down at the end of the week is Tether, according to Coinmarketcap, which is not uncommon for this digital coin.
Current week’s overview (3rd Sep — 9th Sep ’18)
It was a tough end of the week for many of the world’s leading digital currencies, with nearly all of the top 10 coins and tokens down entering the weekend. Bitcoin has plunged in the past two days (7th -8th Sep), erasing previous gains and falling back to the mid $6,000 — $6500 level.
Ethereum has been falling for weeks with only slight improvements along the way. This second-largest cryptocurrency by market cap is trading just below $200, the lowest level that it has been at in months.
Other top coins like XRP, Bitcoin Cash, and EOS have all plummeted along with the biggest names in the market. Tether, linked to the U.S. dollar, has made slight gains over the week, but most of the other tokens remain coupled with Bitcoin, falling as the crypto leader does.
Possible reasons for market movement
After months of speculation and hints, Goldman Sachs appeared to put to rest the idea of it launching a cryptocurrency trade desk in the foreseeable future. However, a senior-level Goldman executive, Martin Chavez, later indicated that the report of the bank’s plans to shift away from a crypto desk was “fake news.” Despite the original news of Sachs not launching a crypto trade desk sending the cryptocurrencies spiraling for the week, the “fake news” claim did not seem to have caused a resurgence in value.
It is clear that the presence of institutional investors is paramount to bring stability in the market, considering the market reacts so violently to the unverified news.
Developments over the week in Cryptomarket
- Crypto.com, formerly known as Monaco, has applied to issue cryptocurrency Visa debit cards in Hong Kong. Crypto.com plans to ship over 100,000 cryptocurrency Visa Debit Cards to customers globally.
- Brisbane startup, TravelbyBit, has been given a grant by the Queensland government to turn the city into a crypto haven. According to reports, the firm’s cryptocurrency point-of-sale system has been deployed to over 200 merchants nationwide, with at least 60% located in the state of Queensland.
- This week, local news sources in Iran announced that the government, through its own High Council of Cyberspace (HCC), had legitimized cryptocurrency mining as an industry.
Bitcoin (BTC) Trend
This week, the BTC/USD pair traded close to the $6,240 level and formed a low at $6,249. Later, the price started an upward move and corrected above the $6,300 and $6,420 levels. Bitcoin price recovered above the $6,420 level but again fell over the weekend and was trading below $6,300 level at the time of writing.
BTC fell 15% over the week, with the average number of transactions per day stands at 0.204 million and volume is $3.8 billion.
Source: CoinMarketCap
Ripple (XRP) Trend
XRP like most other cryptocurrencies, seen its value fall against the US dollar this week and is now trading in the range of $0.27- $0.33, a total week’s performance of -18.0%. The market cap now stands at $10,959 million.
XRP/USD is now facing key resistances near the $0.3100 and $0.3120 levels. After trading towards the $0.2700 level, Ripple’s price found a strong buying interest. The XRP/USD pair started a solid recovery and moved above the $0.2850 resistance. The upside move was solid as the price broke the $0.2900 resistance. The price even traded a few points above the $0.3200 level. In the last couple of days, XRP has fallen and traded below $0.30 level.
On 8th September, the per day number of transaction of XRP stands at 0.405 million and volume is $174 million.
Source: CoinMarketCap
Ethereum (ETH) Trend
There was a sharp decline in ETH price from the $289 swing high against the US Dollar. The ETH/USD pair declined below $250, 100 hourly simple moving average and $225. It traded as low as $209 and later, it started an upside correction and traded above the $215 level. However, over the last couple of days, ETH fell below $200 mark and was trading at $191 at the time of writing. If the price moves higher, it could test the $235 and $240 resistances.
The total week’s performance settled at -34.00%. On 8th Sep, the per day number of transaction of ETH stands at 0.543 million and volume is $1,613 million.
Source: CoinMarketCap
Bitcoin Cash (BCH) Trend
There was a sharp downside move from the $630 swing high in Bitcoin Cash price against the US Dollar. The BCH/USD pair tumbled and broke many supports like $560, $540, $500 and $480. The decline was such that the price even settled below the $550 pivot level and the 100 simple moving average (4-hours). Moreover, the price broke a key horizontal support near the $490 level. Ending the total week’s performance at -25% with a total market cap of $8,121 million at the time of writing (9th Sep’18).
On 8th September, the per day number of transaction of BCH stands at 0.021 million and volume is $303 million.
Source: CoinMarketCap
Top Ten Cryptocurrencies
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 $202 billion on 2nd September to $163 billion on 9th Sep, a decrease of almost 19%.
*Monero(XMR) has replaced IOTA and entered top 10 crypto table with a market cap of $1,688 million. It jumped to 10th spot pushing down the IOTA (MIOTA) to 12th spot whose market cap was $1,457 million at the time of writing.
**Tether(USDT) has replaced Cardano to move one position above in the market cap table. It now stands strong at 8th position with a market cap of $ 2,764 million.
Conclusion
Following weeks of a short-term recovery, which saw Bitcoin bounce off a $5,800 low to a high of $7,400, the cryptocurrency market saw a violent sell-off this week. Even though there wasn’t a clear catalyst that drove prices lower, the total market capitalization of all crypto assets fell by 20%, moving from $240 billion to $190 billion.
This fall may have been the reaction to news that Goldman Sachs will no longer be setting up their crypto trading desk. However, it seems this was unverified news and what Goldman Sachs plans are is to hold off on the trading desk for the time being.
Currently, the cryptocurrency market has a wide range of regulated exchanges in the likes of Coinbase, Gemini, and UPbit that can be used by retail traders to invest in the cryptocurrency market. However, it lacks trusted custodianship and solutions that can break the barrier between cryptocurrencies and institutions.
It can be argued that Goldman Sachs is working on a more urgent issue that needs to be addressed in order to convince the broader financial market and governments to acknowledge cryptocurrencies as an emerging asset class.
The cryptocurrency market has been in a similar trend over the last few months, unable to break out of the $8,000 resistance level with solid volume and momentum. Bitcoin is not considered a sufficiently liquid market, especially considering the fact that its exchange market is open to any individual investor and retail trader in the global market. While cryptocurrency market data providers estimate the daily volume of Bitcoin to be around $5 billion, studies have shown that most major cryptocurrency exchanges inflate their volumes through wash trading.
As Cointelegraph reported on Sept 7, BlackRock and Coinbase are in talks to develop a cryptocurrency-based exchange-traded fund (ETF) to bolster market activity and facilitate growing demand from institutions for cryptocurrencies.
The entrance of VanEck and the Chicago Board Options Exchange (CBOE) has already increased the probability of the approval of the first Bitcoin ETF by the U.S. Securities and Exchange Commission (SEC). The involvement of BlackRock will create more competition in the Bitcoin ETF space among U.S.-based regulated financial institutions, which may lead to more contenders filing with the SEC to improve the liquidity of the dominant cryptocurrency.
Variables like Bakkt, the Coinbase-BlackRock ETF and positive regulation-related developments in Japan and South Korea could contribute to the recovery of the cryptocurrency in the short-term.
Recently, Coinbase CEO Brian Armstrong predicted that the number of people in the crypto ecosystem will grow from the current 40 million to 1 billion in the next five years, claiming that tokens would operate together with equity as an alternative investment system.
However, nothing could be said with conviction and the true underlying reason for the moment of the market is still unknown. Investors are advised to invest money carefully after researching and studying market sentiments.
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 September 12, 2018.
