If the week was not that good for the crypto-planet, it's regarding the prices, not the news. But let's make a recap.
If the week didn't started well, cryptocurrencies rounded out a turbulent quarter in the red on Friday, as bitcoin fell below $7,000 and Ethereum hit its lowest level of the year. With losses mounting, the crypto market plunged below $252 billion on Friday, its lowest since early December.
Stock markets were closed for Good Friday after capping off their worst quarter since 2015. The latest round of volatility was triggered by a rollover in the tech sector as well as lingering concerns over an escalating trade war between global superpowers.
Crypto Market Slump Deepens
The cryptocurrency market shed more than 23% this week, as the onslaught of negative news continued to weigh. Weak institutional demand and increased regulatory scrutiny have also contributed to the latest round of selloffs going all the way back to mid-February. At the time of writing, the total value of the market was $258 billion.
Crypto assets have lost a staggering amount of money since January. The market is down 70% from peak levels, with speculation in altcoins falling sharply over that period. Bitcoin’s share of the total market has gradually increased since bottoming near 32% at the start of the year.
Bitcoin bottomed at $6,584 on Friday, its lowest since early February. It would later recover around $6,800 for a loss of more than 4%. The largest digital currency by market cap has declined more than 21% since Monday.
Regarding Ethereum, it plunged by nearly 30% this week en route to its lowest level since Nov. 23. Ether touched a session low of $364 Friday, but later rebounded to settle around $381.
Actually, Ethereum could be facing a backlash amid the latest downturn in initial coin offerings (ICOs). March was the worst month for token raises since August, signaling renewed trepidation about regulation.
Some analysts have predicted more selling in bitcoin and other virtual currencies ahead of the mid-April deadline to file U.S. tax returns. Based on historic filing data, researchers have concluded that the vast majority of cryptocurrency traders have no paid capital gains taxes on their holdings. That’s about to change as the IRS begins prodding domestic exchanges.
Despite the prolonged slump, the cryptocurrency space has a lot of positive news to report, including new innovations around Lightning Network, a growing institutional presence in blockchain and innovative ICO models being developed. These and other forces have led many in the investment community to retain their bullish stance on bitcoin, including Fundstrat’s Thomas Lee and Abra CEO Bill Barhydt.
The Week Ahead
Large price swings in cryptocurrencies will likely continue next week, although the direction of those swings is subject to debate. Some analysts have concluded that prices have been declining regardless of the news, possibly signaling a natural cooling off following the year-long bull rally.
The debate over regulation will also extend into the second quarter, presenting possible downside risks to ICOs in particular. If March is an indication of future trends, the ICO market could be headed for a major shake-up in the not-too-distant future.
We wish you all a very good day !