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Weekly Analysis Of Digital Currencies (August 25–,September 1, 2018)

Crypto Market
Codemotion Berlin 2018

Digital currencies are full of surprises and potential. The first half of the year 2018 hasn’t been promising or appropriate for cryptocurrencies like Bitcoin, Ethereum. In the span of six months, Bitcoin lost more than half of its highest value. In the month of January of this year, many people predicted that Bitcoin will climb more in 2018. Six months later with Bitcoin struggling to stay in the $7200 level, some people still believe it will still climb more. This week, as forecasted, the cryptocurrency world at first collapsed, but bitcoin’s price is now slightly greater than $7000 mark. This week, the total cryptocurrency volume is at the important neckline of 228-231 Billion, a break to the upward could signal some increasing movement forming a lower high on the daily or weekly. The fluctuation in cryptocurrency prices comes as a reminder to enthusiasts just how volatile and high risk this crypto world is, and that people should always check all the parameters carefully before diving into this world.

Regulations, current economic affairs, speculations by crypto investors and experts, hacking activities and new digital currencies are some factors which affect the price of cryptocurrencies. It’s been a fluctuating week for most cryptocurrencies, most notably for digital currencies like Bitcoin, Ethereum, and Ripple. This week (August 25– September 1, 2018) cryptocurrency market capitalization has a slightly fluctuating trend with a commendable rate and as of writing, equaled $231.17 billion (see below figure). On August 26, the total market cap was $215.88 billion. It was increased by almost 9 billion and on August 27, the market cap was $224.32 billion. According to Coinlib, the total market cap on Sep 1 is $231.17 billion.

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Total Market Cap

The Dominance of Bitcoin, ETH and XRP

Now the dominance of the trendsetter cryptocurrency Bitcoin (BTC) as of writing has been 53%. On Aug 25, its dominance was also 53%.

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Bitcoin dominance

Of the top 100 currencies, Ethereum was hit the hardest. Ethereum (ETH) dominance was at 13% on Aug 25. ETH dominance is continuously showing fluctuating behavior. It was at 12% on Aug 27 and 13% on Aug 29 and as of writing this article, it is again at 12%.

ETH Dominance
ETH Dominance

Ripple (XRP) was at 6% on Aug 25 and as of writing this article, it is at 6%. The following figures show us the dominance of these three cryptocurrencies respectively.

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Ripple Dominance

A few days ago, Yale University researchers had presented factors for crypto price prediction. According to them, there is a strong time-series momentum outcome and that proxies for investor attention and forecast cryptocurrency returns. Researchers created an index of exposures to cryptocurrencies of 354 industries in the US and 137 industries in China. The factors predicting crypto price markets are momentum and investors attention. They also concluded that, when it comes to bitcoin, a one standard deviation growth in today’s return increases in daily returns by 0.33 percent, 0.17 percent, 0.39 percent, and 0.50 percent increases at the 1-day, 3-day, 5-day, and 6-day ahead returns, respectively.

Total Volume Of  Digital Currencies

Now, the total volume of the cryptocurrency market is also showing fluctuating behavior. On Aug 25, it was $9.59 B. All of a sudden it was increased and Sunday, Aug 26 saw the highest volume of cryptocurrency at $28.07 B. The day with the lowest volume was Thursday, Aug 30 at US$4.39 billion. Following figure is showing us the total volume of cryptocurrency on 1 Sep 2018.

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Digital Currencies Total Volume

The legitimacy, price, volume and total market cap of cryptocurrencies depend on country’s leading provider of banking systems. There are several factors such as approvals of various sections like SEC and what regulators think. Cryptocurrency prices have embarked on a slow recovery following its slip in the last week. Last week, the crypto market displayed poor growth because U.S. SEC rejected three Bitcoin ETF proposals. Also, various countries have now recognized the potential of digital currencies. Iran has decided to lift cryptocurrency ban in September. The ban, which was imposed in the month of April, disallows state banks and other financial institutions from dealing with cryptocurrencies. Not only this, Iran has been developing a national cryptocurrency that could allow them to sidestep the crippling economic sanctions by the US in place since May. Country’s leading provider of banking systems, Informatics Services Corporations has reportedly been designing and developing the cryptocurrency and has now disclosed its features.

This week’s prices also showed fluctuating behavior because of regulations and hacking activities. Crypto market tends to react rapidly to any decisions regarding cryptocurrency regulation. For example, when Japan declared in April 2017 that it was legalizing bitcoin, the price hit $1,130, rising nearly 3% in a day.

Disclaimer: This information should not be interpreted as an endorsement of any cryptocurrency. It is not a recommendation to trade. The cryptocurrency market is full of surprises and overhyped assets. Do your research before buying anything.

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