Analytics

November 19

Tokenbox: Market Review for November 12 – 18, 2018

November 19

What came from analysts' predictions and what news should investors pay attention to?

In the previous review, we noted that the flat cannot last indefinitely. Unfortunately, the negative scenario, which we contemplated, happened: «...the price fall below $6000 in the region of $5800- $5900. In this scenario, a new round of decline will start, which will cause panic sales». And so it happened. Bitcoin reached a new minimum of 2018 at $5,200 (according to the Bitstamp exchange). In the second half of the week, part of the losses was won back and on Sunday evening Bitcoin is trading at around $ 5,500.

Ethereum also revisited the September’s low, but only slightly – the daily candle on November 16 closed below $180. If prices manage to rebound significantly from these levels, a double bottom pattern will be formed. A similar technical scenario can be observed in EOS, Dash and Monero, only the previous minimum was in August. Even the price of XRP could not resist panic sales. Last week, we noted a clear demand for this asset and its price has fully recovered to Monday levels. Later, when working with this cryptocurrency, we recommend that you pay attention to the news about the xRapid product, not RippleNet because the future of XRP depends on xRapid’s success.

Regarding the reasons for the collapse of the crypto-market, technical and fundamental factors should be taken into consideration. From the point of view of technical analysis, the level of support that Bitcoin held for almost the entire 2018 was breached. Of course, this led both to triggering stop orders and panic selling. For example, on the Bitstamp exchange, where trades are conducted in pairs to USD, at the time of the panic, orders for the purchase of 100 BTC (over $ 500,000) were executed in just a few seconds. By the way, at the level of $5200, the opposite pattern was observed.

Now about the fundamental factors. First, the drop in the power (hashrate) of the Bitcoin network. Earlier there was information about the shutdown of several large mining farms in China. So far this has been associated with state inspections, but not with the profitability of mining. The price of electricity in China is subsidized and the break-even threshold for mining is clearly below $5,000.

The second factor is the uncertainty associated with the Bitcoin Cash fork. The risk of sudden switching of mining capacity between different networks, as a rule, makes everyone nervous. The hard fork network Bitcoin Cash still happened. The coins of the new network (Bitcoin Cash SV) received a BCHSV ticker almost everywhere. But the coins of the Bitcoin Cash ABC network, supported by Roger Wer, on different exchanges have been designated differently: BCH, BAB, BCHABC. So far, Bitcoin Cash ABC is leading in terms of hashrate and number of blocks. At some point, after the hard forks ABC went ahead with a 50 blocks advantage, but by Sunday this figure dropped to 5 blocks. We will follow the development of this situation, already termed the «hashrate war», which can continue to influence the entire market.

Of the news of the regulation of the crypto market: SEC sanctions against several ICO projects should be noted, as well as the announcements of the launch of a crypto ETF in Switzerland. In this review, we only briefly discuss the second news, as both require more detailed analysis as new information becomes available.

The Swiss SIX Swiss Exchange will launch a financial product (Exchange Traded Product, ETP) on the basis of several of the most liquid cryptocurrencies: Bitcoin, XRP, Ethereum, Bitcoin Cash ABC and Litecoin. When an investor purchases ETP shares with the symbolic ticker HODL5, managers will acquire the appropriate amount of cryptocurrency by placing it in a secure vault. The fund portfolio will be rebalanced depending on the market situation.

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