Is that the end of the Great Ripple?

Following all the crypto-hype of December, things have certainly turned and the cryptomarkets are getting hammered through the early part of January, with the current week declines being particularly telling of market sentiment towards the cryptocurrencies.

We’ve heard all the news and seen the impact that governments can have on cryptocurrencies, with each country owning the power to shut down exchanges, ban initial coin offerings and more. Does that make cryptocurrencies a flawed concept, with the entire ethos of Satoshi Nakamoto having been to take the power away from the governments and central banks?

On the face of it, there is a strong argument that the cryptos have been marred by recent government interventions, but the reality remains that the fundamental concept remains intact. There’s no printing of cryptos and rewards for cryptocurrency holders that come from the verification process continues to remain independent and out of the hands of a single authority.

Ethos intact, but governments in power. That has been the downfall of the cryptocurrencies this week, with Cboe Bitcoin futures falling by $480 to $14,310 for January’s maturity, by $550 to $14,260 for the February contract and by $570 to $14,300 for the March contract.

The smart money has certainly responded to the regulatory risk noise that even the less savvy investor knows is bad news for the cryptos. The fact that Bitcoin futures are sitting well above Bitcoin’s current value of $13,700 is perhaps more worrisome. The futures market has managed to pin back the likes of Bitcoin from any late 2017 rally that had been enjoyed by many of the other cryptocurrencies, but is providing little comfort as investors shun the futures contracts as a pricing guide, looking to preserve capital and 2017 gains instead.

It’s not looking particularly bright for Bitcoin and the rest of the majors through the remainder of the day and, while the futures contracts have some buffer for Bitcoin to move northwards, it’s more likely that Bitcoin futures will be taking its cues from Bitcoin today.

While Ethereum has taken the limelight this week, even the world’s 2^nd largest cryptocurrency by market share is fallible, with Ethereum having pulled back from today’s intraday high $1,386.99 to $1,271.25 at the time of writing.

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For the day ahead, it’s going to be a tough one for the cryptomarket and one doesn’t have to go too far back to recall the last time that Bitcoin was under the hammer and talks had built of a possible end to the Bitcoin dream.

We will expect the Bitcoin futures contracts to catch up to the negative sentiment towards the cryptos, which should see Bitcoin futures fall to Bitcoin’s current values, though whether Bitcoin can steady this afternoon remains to be seen.

Investors will be looking to work out re-entry prices and for some, entry prices though, with the speed of today’s declines, when to enter the markets will be a hot topic in key markets.

Ripple at $1.64 and Bitcoin at sub-$14,000 sound like bargains, but buying on the dip would certainly not be recommended today.

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