Cryptocurrency Market Overview [December 2018]

Market Cap: $109,672,007,61724h Vol: $16,543,133,132BTC Dominance: 54.8%

From Monday, December 3rd when the evaluation of the cryptocurrency market capitalization was around $135 billion, the market has depreciated in evaluation by approximately 25,4 billion dollars measured to the current levels. The evaluation has gone even lower and was $104B on yesterday’s low.

Looking at the global chart you can see that the evaluation is in a clear downtrend has been established and the evaluation is again back to its resistance line. As the evaluation looks like is going to make a lower high a lower low would be expected from here.

Zooming out further on the global chart we can see that the evaluation previously broke out from a symmetrical triangle from the downside on December 3rd when this current downtrend has begun.

After the evaluation decreased by over 25 billion dollars at one go, a lower leg has started developing which is what was happening every step of the way down, over and over again.

Inversely the evaluation of the Bitcoin’s market dominance has been steadily increasing and since the 3rd of December when it was 53.67% it has increased by 1.13% as its currently sitting around 54.8%.

Zooming out further onto the Bitcoin’s percentage of total market capitalization you can see that this increase meant a breakout from the triangle on the upside.

Now that the evaluation has ended its consolidation and is in an upward trajectory I would expect it to go up to 68% before the bear market ends or potentially even higher than that.

Bitcoin’s market dominance evaluation serves as a sentiment indicator as in times of confidence, people tend to risk more and they diversify more over the crypto market with altcoins, but in times of fear uncertainty and doubt, people sell their alts for Bitcoin and ultimately sell their Bitcoin for cash in an attempt to preserve their capital.

News

From the start of the week, major news headlines have come out with many of them adding to the bearish sentiment and could impact or already have impacted the market negatively.

The headlines significance is measured by its impact on the market so among those who are of utmost significance are regarding regulation and formal frameworks for the crypto industry.

The most notable news about the overall regulative future outlook for the crypto market and the industry, in general, can be hinted by what has recently been said at the G20 summit in Argentina.

Cryptocurrencies have been addressed by the international government and central bank representatives in the declaration on sustainable development for the global economy titled “Building Consensus for Fair and Sustainable Development” among other important issues.

The summary of what has been stated there is that more regulation is coming and with it the taxation of the entire space and the overview of the transactional frameworks and exchanges, in the attempt to prevent money laundering and tax avoidance.

“We will regulate crypto-assets for anti-money laundering and countering the financing of terrorism in line with FATF standards and we will consider other responses as needed.”

On the other hand, G20 counties will develop an international taxation system which views the whole cryptocurrency market as one big IT company, making it possible to tax international transactions and other cross-border payments.

As reported by the Japanese news outlet Jiji, under current laws that is impossible so the declaration further states:

“We will seek solutions for the international taxation issue accompanying the digitization of the economy and will continue to collaborate”.

These measures should be implemented by 2020 but the process has already started since members of the G20 counties are to submit their reports on the crypto taxation system during the next G20 summit scheduled for 2019 in Osaka, Japan.

The second by its significance on the market is the adoption and the most important headline from this week from that category would be news regarding SEC delaying the decision for a Bitcoin ETF for late February. It is considered that an ETF would bring some institutional money into the space and help bring some legitimacy to the cryptocurrency trading, thus bringing new investors.

This new inflow of capital would potentially spark the end of the bear market which is why this would be considered as a significant event, however, the Securities and Exchange Commission has however postponed the decision and the new deadline is set for 27. February next year. This was done in order for the commission to buy some time and review the rule change proposals to approve the request for an ETF by investment firm VanEck and blockchain company SolidX

“The Commission finds it appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider this proposed rule change.”

This means that the adoption of the cryptocurrencies among trader at least would have to wait and the new inflow of capital isn’t going to be injected any time soon.

The other headline regarding the SEC is the cease and desist order they had fined to a cryptocurrency digital asset fund CoinAlpha Advisors LLC for violating the law that “prohibits the sale of securities through interstate commerce or the mails unless a registration statement is in effect.”

While we are on lawsuits, the “hash wars” have escalated with a lawsuit from a Florida-based United American Corp. (UnitedCorp) against Bitmain, Bitcoin.com, Roger Ver, and the cryptocurrency exchange Kraken for they have “planned a scheme to take control of the Bitcoin Cash (BCH) network.”

“UnitedCorp believes that the defendants colluded to effectively hijack the Bitcoin Cash network after the November 15, 2018 scheduled software update with the intent of centralizing the network — all in violation of the accepted standards and protocols associated with Bitcoin since its inception.”

For those who maybe don’t know, this situation escalated after Bitcoin Cash was scheduled for a hard fork which divided into two chains Bitcoin ABC and Bitcoin SV, so the war between two sides for hash power took place in order to take control to be established as the main chain.

The situation in the crypto industry resembles the situation with the current state of the cryptocurrency prices — crash. Both miners and companies around blockchain tech are starting to fell the pressure of these low prices and are starting to cut off some of the unnecessary expenses and some quitting altogether.

Among those who are quitting altogether are miners. Many news media outlets have reported that miners who are outcompeted and cannot keep up the with the current cost to profit ratios are selling their equipment as the prices of cryptos have fallen below the profitable benchmark for some.

Meanwhile, some of the large names from the space are starting to lay off their excess staff like ConsenSys who confirmed 13% layoffs as reported by Coindesk:

“Excited as we are about ConsenSys 2.0, our first step in this direction has been a difficult one: we are streamlining several parts of the business including ConsenSys Solutions, spokes, and hub services, leading to a 13% reduction of mesh members.”

On the other hand, the blockchain based social media platform Steemit is laying off even 70% of their current staff. Steemit CEO and founder Ned Scott said:

“While we were building out our team over the last many months we have been relying on projections of basically a higher bottom for the market and since that’s no longer there, we’ve been forced to lay off more than 70 percent of our organization and begin a restructuring.”

Conclusion

All of these headlines paint a grim picture for the cryptocurrency market. Tracking the media and analyzing the market sentiment in that way could serve as a good indicator of where we are in the market cycle stages.

According to current news analysis, we are currently at the start of the capitulation stage

We were in denial until around $6500 for the price of Bitcoin and since the price crashed down by 50% there isn’t any doubt that the market is heading for a further decline with the despair stage not even in sight.

For those who are prepared and can objectively look at the market, this serves as a good opportunity to make some profits while the market participants are acting on fear-based decision making.