Weekly Market Performance Report (30th July — 5th August 2018) — Invsta Blog
Written by Abhy Singla
Previous week’s overview (23rd July ’18–29th July ’18)% Change
Last week, Bitcoin climbed to a two-month high, topping $8,000.
During the first 2 days of the week (23rd — 24th July), all the major cryptos surged in the range of 2%-10%, however towards the end of the week the market fell, ending in only a slight increase for the week. BTC which showed signs of recovery and ended the week up by 6%, which was driven by several technical analysts spotting an “inverse head and shoulders” pattern in its price.
Current week’s overview (30th July ’18–5th Aug ’18)
This week, the cryptocurrency fortunes have turned. 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.
Possible reasons for market movement
CCN suggests the possibility that over-the-counter markets for Bitcoin are significantly larger than the exchange market, and that large sell-offs have impacted the market in recent weeks. However, this is just one possibility out of a large list of potential causes for the decline.
Last week, when news broke that the Winklevoss brothers’ proposed Bitcoin ETF had been rejected by the SEC for the second time, analysts speculated that this news might bring about a dip in values. However, given that the momentary dip has continued for several days beyond this headline’s release, cryptocurrency enthusiasts are wondering if there may be something else at play as well.
Developments over the week in Cryptomarket
- Intercontinental Exchange (ICE), the parent company to the NYSE, announced plans to launch a new crypto ecosystem called Bakkt. Among other services, ICE’s new project will provide delivery of actual Bitcoin in its futures contracts; most similar contracts are settled with cash.
- The Bank of Thailand (BoT), the country’s central bank, has reportedly given all local financial institutions permission to launch subsidiaries, which may offer certain types of banking services to cryptocurrency investors.
- Thailand’s banks will now be able to offer brokerage services to crypto-related companies, invest in crypto and blockchain startups, or even operate their own crypto business.
Bitcoin (BTC) Trend
This week, there was a sharp downside move from well above $7,600 in Bitcoin price against the US Dollar. The BTC/USD pair declined and broke the $7,500 and $7,260 support levels to move into a bearish zone. It even traded below the $7,000 level and is currently well below the 100 simple moving average. A new monthly low was formed at $6,881 and the price is currently consolidating and is trading at $7010.94 at the time of writing, a decrease of 14% over the week.
Source: CoinMarketCap
Ripple (XRP) Trend
The price of Ripple (XRP) has decreased over the week and is now trading in the range of $0.40- $0.45. The market cap now stands at $16,922 million. The total week’s performance settled at -3%.
There was a slow and steady decline towards $0.43 in Ripple price against the US Dollar. The XRP/USD pair retested the $0.427 support area, which acted as a significant barrier for sellers. There was no downside break below $0.427, which is a positive sign. The price bounced back and moved above the 23.6% Fib retracement level of the last decline from the $0.460 swing high to $0.426 low.
According to experts, the short-term trend of XRP will likely remain negative in the upcoming days, as the sell-off on July 19 was not sufficient to reverse the Relative Strength Index (RSI) of XRP and create an oversold condition. The Average Directional Index and various momentum indicators show that the downtrend of XRP is simply too strong at the moment to initiate any sort of corrective rally.
Source: CoinMarketCap
Ethereum (ETH) Trend
ETH decreased this week and traded at around the $400 — $450 mark this week. Ethereum has shown a bearish signal with the price struggling to hold gains above $450 and declined against the US Dollar.
This past week, the ETH/USD pair continued to show bear signals, declining and breaking the $430 and $423 support levels. It moved into a bearish zone below $430 and settled below the 100 simple moving average.
The total week’s performance settled at -11%. The price was $457.08 on 30th July and it gradually decreased to $406.25 towards the end of the week (5th August).
Source: CoinMarketCap
Bitcoin Cash (BCH) Trend
There was a crucial failure above the $750 level in Bitcoin Cash price against the US Dollar. The BCH/USD pair started a downside move and broke the $735 and $705 support levels. BCH even traded below the $700 level during the week. It is currently trading well below the $730 pivot level and the 100 simple moving average, which is a bearish sign.
The total week’s performance settled at -15%. The price decreased from $816.08 on 30th July to an intra-week low of $694.13 on 5th August. The total market capitalization of Bitcoin Cash is close to $11,994 million at the time of writing
On August 1, BCH proponents celebrated the ‘Bitcoin Cash Independence Day’ which marks the anniversary of the blockchain split that took place a year ago. On August 1, 2018, the Bitcoin Cash network processed 687,000 on-chain transactions showing the power of blockchain technology.
The current market trend of BCH is not permanent and investors should keep an eye for further developments in BCH.
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 83% of the total market cap of cryptomarket at the time of writing. Over the week, the market cap of top 10 cryptos decreased from $247 billion on 29th July to $214 billion on 5th July, a decrease of almost 14%.
*Stellar (XLM) has replaced Litecoin and moved one place above in the ranking table. It jumped to 6th spot pushing down the Litecoin (LTC) to 7th spot. It is holding the 6th spot for over a month now.
Conclusion
This week, Bitcoin has fallen drastically. At the time of writing the price is at $7,010 which is well below the eight thousand dollars psychological level. The currency still reaches daily highs beyond 8,000 every now and then, but the overall performance remains inconsistent if we go by data provided by Coinmarketcap.
Over the last couple of days (3rd — 4th August), the Bitcoin price has dropped by more than 6% from $7,500 to $7,000, despite having seen some of the most positive developments in the history of the crypto market.
With every new low, there is a saturation of theories — flimsy and authoritative. It would appear as though the entire cryptocurrency space is reacting to recent news suggesting another denial by regulators of a Bitcoin ETF. Unquestionably, this was impactful news, but this drastic fall should not be completely blamed upon the SEC news. There are several other reasons which are bringing hustle bustle in the crypto market.
CCN suggests the possibility that over-the-counter markets for Bitcoin are significantly larger than the exchange market, and that large sell-offs have impacted the market in recent weeks.
The vast majority of short-term traders and casual investors utilize cryptocurrency exchanges such as Coinbase, Bitfinex, Binance, OKEx, Huobi, and UPbit to buy and sell major digital assets. Developments in the cryptocurrency sector pertaining to merchant adoption, the institutionalization of cryptocurrencies, and technical breakthroughs can have a significant impact on the cryptocurrency exchange market.
However, according to Tabb Group’s report, the over-the-counter (OTC) market of Bitcoin is incomparably larger than its exchange market, by at least two to three-fold. Hence, if the cryptocurrency exchange market only accounts for 25 percent of the global market’s liquidity or volume, it is more likely that large-scale retail traders in the OTC market are manipulating the price of Bitcoin, rather than individual investors in the public exchange market.
It is plausible that the OTC market has substantially increased the volatility of the market with the liquidation of large buy and sell orders, and in a period like this, it can be said that developments and news are not solely affecting the cryptocurrency market and its valuation.
Currently, the market and community are generally optimistic, mostly due to the strong performance of Bitcoin for the last couple of weeks.
Politicians all around the world have started noticing cryptocurrencies and that has affected prices. South Korea, for instance, is one of the most critical places in the world for digital assets because of the many exchanges it hosts and the high trading volume it has, especially for Bitcoin. The South Korean government is pondering whether to start taxing cryptocurrency exchanges which have enjoyed tax benefits until now.
Then there was the news about Ledger Connect, a blockchain-based software that is going to start trials in nine of the world’s most prominent financial institutions (Barclays and Citigroup, for instance). This software is backed up by IBM, whose reputation is still tremendous within the technology industry, in partnership with CLS, a currency trading utility.
However, given the volatility of the cryptocurrency market, the price movement of cryptocurrencies can change drastically based on market conditions. As such, it is important to actively observe the market to find any irregularity and change in trading conditions.
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 6, 2018.
