The massive drop in crypto prices continues. We are currently in the midst of the second largest correction of all time, and the strongest since 2012. For veterans in crypto, the correction is reminiscent of the downward correction at the end of 2013, when Bitcoin reached its all-time high then – around $1200. Yet was followed by a painful and continuous correction to the $200 area where it stopped for long accumulation.
Today the rules have changed; the number of crypto exchanges have increased, trading volumes have doubled, and there is much more diversification. In 2014, one major exchange, MT GOX, which controlled the majority of the trading volume at that time, was hacked and disappeared one day. The effect was almost devastating: many investors lost all their money and even worse, they lost faith in the future of Bitcoin. Of course, even if today one of the exchanges suddenly disappears, the market will get affected, but it will not be as painful as before.
Interestingly, gold prices rose on the days Bitcoin’s price went down. Is Bitcoin taking the role of the gold? 2018 began a little lame, and the winter has just begun … even in days of such declines, in crypto you can always make a profit: the shorts on Bitcoin have been very rewarding since the 20K levels. Daily trading due to recent volatility is really hard to profit from. Keep in mind that it’s important not to involve emotions in trading, especially when dealing with panic, in a bear market like we have.
In the short term, the price gets supported at the $10,000 area, which may change overnight. Although, let’s look on the bright side, the fees had decreased to 30-50 Satoshi. Kinda nice.
Compared to the dollar, almost all the Altcoins are going down. Similar to the months of the meteoric rise of Bitcoin, where the alcoins went up Dollarwise.
Coins such as VEN CND were featured the past week on Binance exchange. This exchange, although really young among the crypto markets, have already managed to grow in terms of volume and impact on the entire market. Against the dollar, the whole market suffered last week. Yesterday we saw a light recovery which brings some optimism for what’s to come.
The cycle of the market continues and prices are similar prices in the past: whether it is the increase of the Altcoins, against Bitcoin, at the beginning of each of recent years, or whether it is the correction in Bitcoin every January, which occurred in the past few years.
The Bitcoin dominance level is still at 34% over the crypto market. The daily trading volume still stands at tens of billions USD and the size of the crypto market is still over $500 billion. Still, this is a huge year-to-year growth. In the ICO sector, we see significant growth after the disappointing months at the end of 2017. By the beginning of 2018, lots of ICOs have raised 100% of the funds and reached their hard cap. Now is the time to wait and see the usability of the technologies that the new ICOs bring. Today, most of the crypto trading is yet very speculative and mainly reflects future potential.
News from Asia
Japan’s largest bank and the fourth largest Bank in the world, the Mitsubishi UFG financial group, announced its plan this week to offer conversion services between FIAT currencies and crypto currencies, and even plans to launch its own crypto coin, the MUFG Coin.
In South Korea, in response to the laws of the country, the Anguk Law Offices filed a petition with the Constitutional Court in the state on the grounds that there is no legal basis for the regulation of crypto in South Korea. The petition accumulated more than 200,000 signatures in less than a month, and another petition that was written in the wake of even tougher regulation since the beginning of the month has gained more than 215,000 signatures this week.
In addition, the South Korean authorities announced that the “real-system system“, which will not allow the use of anonymous accounts in the exchange, will be integrated into the six largest banks in the country next month. Now transactions such as trading, withdrawing or placing money in the country’s crypto exchange will only be available for accounts opened by one of the banks through the new system.
One South Korean chairman from the Financial Authority, the Financial Supervisory Commission, said that some of the members of the Financial Authority were trading in crypto currencies, and some of them may have sold a portion of their coins before the government announced its tougher regulation. He stated that it is not appropriate for civil servants to hold crypto-coins, even though there is currently no legal prohibition on it.
In China, anonymous reports indicate that the government intends to block access to domestic and foreign trading exchanges for its residents. Additionally, the e-commerce company, Alibaba, launched a platform for the mining of crypto – “P2P Nodes”.
Indonesia – The country’s central bank has issued a statement that any use of crypto in the country is prohibited. In other words, crypto-coins are considered illegal means of payment in the country. Furthermore, the Central Bank, in cooperation with the local police, began an investigation to uncover more information about citizens involved in such transactions, especially in Bali.
In India, four of the country’s largest banks froze the accounts of the country’s major trading exchanges, due to the fear of “suspicious transactions.” This step comes without any prior warning.
News from the Middle East
Dubai – one of the largest banks in Dubai, the Emirates NBD bank, joined a series of other banks this week by not allowing customers to buy or purchase items with crypto-currencies. The Bank made this decision independently, meaning, it did not stem from instructions from Central Bank or the regulator, and it took effect suddenly without the Bank updating its customers in advance. This is similar to the steps that were just taken by the banks in India. The decision of the Bank is expected to have an effect on the local crypto exchange, BitOasis.
In Israel, the Tax Authority published a draft explaining taxation aspects of ICO issues. Among other things, it appears that the company’s profits from the sale of tokens will be classified as the company’s income, except in certain cases where the product / service will be provided at a future date. The draft also regulates taxes of the token holders.
Mike Bell, a senior JP Morgan executive, said in a detailed statement that he forewarned that governments would eventually ban trading in Bitcoin. This statement (not coincidentally) comes after the tightening of regulation in China and South Korea.
The bank, Stanley Morgan, announced that it would allow its customers to trade Futures contracts on the CBoE and CM stock exchanges. This statement follows a nearly identical statement by Goldman Sachs from a few weeks ago.
ECB President, Mario Draghi, is expected to release a video on February 12 explaining the bank’s stance on crypto and Blockchain and the possibility that crypto currencies may replace FIAT currencies. The bank also plans to allow young Europeans aged 16-35 to send questions on the subject, which Daragy will answer in the video.
Visa CEO, Alfred Kelly, announced in an interview this week that the company would not allow the processing of crypto transactions.
The Spanish real estate company, Mister Piso, sold the country’s first property in exchange for Bitcoin.
Peter Boockvar, chief investment officer at the Bleakley Advisory Group, predicts that Bitcoin may reach a price of $1-3 thousand over the next year, “When the bubble explodes.” He said the fall of Bitcoin would not affect the stock market too much because it is a market with a value of over $19 trillion, but he said the collapse of the crypto market would completely change investors’ approach to risk management.
Finally, the philosopher and mathematician who wrote “Black Swan”, Nissim Taleb, published a post in which he expressed his positive opinion of the concept behind Bitcoin. Among other things, he explained why Bitcoin is different from gold, and the importance of money being controlled by the masses or by the users. He said that although Bitcoin in its current state may not be good enough to buy everyday products, and that it’s too volatile to be a currency, its very existence is a guarantee that the “currency” will not be a government monopoly and will be an insurance policy against the Orwellian future.
The January correction is on its way. The price set lower lows. Since the previous market update, the price gets supported in the $10K areas with leaks below. The psychological barrier of $10,000 seems to be still with us. If this level breaks, we will see new lows.
Right now the resistance lies around $13K. The way up is not simple at all, due to another strong resistance at $17K.
Against the Dollar, a strong correction down after we touched $1400 all-time high. The significant support lies around $800, the support was tested a few days ago, and in the meantime the price has climbed back to the $1000 level. Resistance is around $1200.
Against the Bitcoin, past resistance zones are marked in the chart around the level of 0.083BTC where support lies.
Like Bitcoin, Bitcoin Cash also fell bad against the dollar. The supports break down one by one, and the price reveals new plains. Bitcoin Cash still needs more time to recover.
Against Bitcoin, there is a stable price level, where it was traded recently around 0.15BTC with fluctuations of 3% up and down. Boring, but steady. Sometimes boring is positive in trading.
Against the dollar: Since last month, Augur had impressive gains. The price broke up the resistance around $50, and continued to soar to $134. After that, it dropped hard and support was around $60 with small leaks back to the $50 areas, where there are demands. Significant resistance lies at $110.
Against the Bitcoin, the price rises in laterally. The graph looks positive. Resistance level around 0.0085BTC support lies around 0.006BTC.
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