It was another tough week for Bitcoin, with the cryptomarkets getting hit by regulatory chatter for a second week in a row.
While Bitcoin managed to recover to $13,000 levels going into the week, the South Korean government’s second U-turn on its views on the cryptocurrency markets and the exchanges weighed heavily, leading to Bitcoin sliding 32.4% from Monday’s open to Wednesday’s $9,222 low.
The negative sentiment towards the cryptomarkets was reflected in the market’s total market cap, which plunged by more than $300bn to $432.494bn on Wednesday, well below the 7th January $832bn high. Bitcoin’s market cap slumped to $166bn in the sell-off having come close to breaking above $300bn on 6th January.
A shift in investor sentiment saw a broad based cryptomarket recovery from Wednesday’s lows through to Friday’s close, which saw Bitcoin rally 36% to Friday’s closing price of $11,612.5, leaving Bitcoin down just 14.9% for the week. Bitcoin prices are steady at the beginning of the week, trading at 11,810 at the time of writing.
Bitcoin’s market cap recovered to $192.26bn by the end of the week, as investors returned, though there was still plenty of investor money on the side lines, as uncertainty over government intentions across major cryptomarket jurisdictions continued to peg back a more cryptocurrency like rally that was often seen during 2017.
Through the weekend, sentiment was somewhat better, with Bitcoin managing to hit a weekend high $13,052.12, with no Bitcoin futures market to peg back more sustainable Bitcoin rallies, as has been the case in recent weeks.
At the time of writing, Bitcoin is up at $11,810.00, with Bitcoin’s market cap up at $195.07, whilst continuing to sit at sub-$200bn at the time of writing.
Bitcoin Hourly Chart
Bitcoin Weekly Chart
For the week ahead it’s likely to be another choppy week, as more negative news feeds through the cryptomarket news wires. News of the North Korean government hacking a South Korean cryptocurrency exchange, stealing millions of Dollars, will certainly not help the cause.
On the Bitcoin Futures market, the Cboe’s February contract is up $250 to $11,650 for the day, with March’s contract up $275 to $11,730, neither of which are going to be supporting a Bitcoin rally back to $15,000 levels any time soon.
The market panic may be over, but sensitivity to any negative chatter will be heightened until the dust settles and the South Korean government’s review of the exchanges and their money laundering and KYC procedures have been completed.
Things were not much better for Ethereum last week, with Ethereum sliding to a week low $757 on Wednesday, coming off its 13th January high $1,419.96. For the week, Ethereum was down 23.7%, in spite of a 2nd half of a week 37.6% rally.
Despite the slide, Ethereum’s market cap has held on to $100bn levels, sitting at $102.6bn at the time of writing, recovering from Wednesday’s low $76.25bn. Ethereum is expected to see continued support as the ICO market continues to heat up, with the number of cryptocurrencies in existence now sitting at 1,465, up by almost 100 through the first few weeks of the year.
ETH Hourly Chart
ETH Weekly Chart
At the time of writing, Ethereum has managed to recover to $1,000 levels, up 1.04% to 1058.01, easing back from a weekend high $1,164.97, with the weekly ahead likely to be a more favourable one for Ethereum than the last.
We will expect the markets to begin to settle and start playing closer attention to the blockchain technology that’s on offer. Market access to the cryptocurrencies will continue to be of material importance however, with a lack of availability of cryptocurrencies a negative, as Ripple investors have discovered.
While Ripple’s challenge for the number 2 spot has come and gone for now, a new challenge could come from Bitcoin Cash, with a number of the cryptomarket experts forecasting a Bitcoin Cash rally through 2018.
There’s a long way to go for Bitcoin Cash, with a market cap of $29.89bn at the time of writing and with miners continuing to favour Bitcoin over Bitcoin Cash but, if the team can make some progress on getting Bitcoin Cash accepted as an alternative payment platform to compete with Bitcoin, things will likely change rapidly. Bitcoin Cash has far more favourable transaction speeds and transaction fees that make it far more of a viable competitor to fiat money than Bitcoin.
It’s going to be a choppy week, but for now, the cryptomarket has shown some resilience and may have cast a darker shadow over its doubters, who continue to call all of this a bubble that is ready to burst.
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