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Grand Theft NEM Pins Back Bitcoin

By:
Bob Mason
Published: Jan 27, 2018, 09:08 UTC

Bitcoin failed to find its feet through the early part of the weekend, with any upside short lived as investors look ahead to another week that's likely to deliver plenty of news, much if it unlikely to be too supportive. Bitcoin is holding on though and that should be of some comfort

BTC/USD daily chart, January 24, 2018

Bitcoin ended the week on a low note on Friday, falling 7.87% to a late morning intraday low $10,263.32 before closing the day down 0.26% at $11,110.8.

The daily moves have been particularly choppy, with the cryptomarkets having to continue responding to news hitting the wires of a likely increased level security from regulators in key cryptocurrency markets.

For Bitcoin investors, the good news was that Bitcoin was able to close out the week holding on to $11,000 levels, in spite of the Cboe’s February contract ending the day down 2.83% to $10,980.

Following 2-weeks of turmoil in the markets, there was some sense of normality through the week, though the markets were far from clear of negative news, which continued to pin back any hopes of a rally, with the institutional money taking a more bearish view going into the weekend.

U.S regulators joined the bandwagon late in the week, as key government officials raised the subject of cryptocurrencies at the World Economic Forum in Davos.

Friday’s moves were a reflection of the uncertainty that the cryptomarkets now face. It’s unclear for many investors whether increased oversight translates into weaker demand and, with all of the talk of money laundering and crime related funds passing through the crypto exchanges, a fall in demand may eventually happen, but this would need all of the jurisdictions to have the same KYC and money laundering standards. One hazards a guess that it’s going to be someway off, which should ease any immediate market panic.

Other negative news to pin back the cryptomarkets going into the weekend was news from Japan’s Coincheck exchange, which has had to freeze all withdrawals.

Coincheck confirmed late on Friday of the theft approximately $400 worth of NEM tokens from the exchange’s wallet. The amount may pale in significance to the cryptomarket’s $550.5bn market cap, but it’s yet another example of just how unsecure cryptocurrencies can be and gives regulators more reason to take a greater interest in cryptocurrencies and its dealings.

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Following a spate of bad news in the last few weeks, Bitcoin has managed to brush off the negative sentiment reflected in the futures markets, holding at $11,116.65 at the time of writing, a gain of just 0.21%.

There was some optimism earlier in the morning that Bitcoin could be moving into its Saturday rally, hitting an intraday high $11,424.88, but with investors continuing to be a little edgy, there is a rush to lock in any reasonable profits before another sell-off.

This morning’s intraday low $10,891.02 came at the start of the day and, while Bitcoin is making a bearish move at the time of writing, we will expect plenty of support at $11,000, though we have seen Bitcoin’s ranges on the decline of late, with $10,000 levels hit with greater frequency.

For the day ahead, any gains are likely to be on the lighter side, with $12,000 levels perhaps a bridge too far for weekend, as investors look ahead to what can be expected in the week ahead, as regulatory chatter is likely to continue.

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About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

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