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Crypto market forecast: 19th August

A challenging week for crypto ended with BTC and most other digital assets trading heavily red. A silver lining appeared towards the end of the week, however, with full confirmation and regulatory approval for the BAKKT futures trading and custody platform - an announcement which helped markets recover some mid-week losses.

It was a bearish week for the crypto markets as Bitcoin ended the week down ~8% trading at $10,378.24. Prior to that BTC traded below $10,000 during the week, before a strong price surge pushed it back above five figures. This was likely driven by the announcement of a confirmed launch date for the Bakkt platform (September 23rd).

The number two and three cryptos on BNC’s market cap table, ETH and XRP, fell 9% and 6% respectively and followed a similar pattern of heavy early week losses with a late week recovery. The overall crypto market cap fell ~9% with Bitcoin dominance hovering around 68%.

One cause for last week’s heavy selling pressure may have been the Plustoken ponzi scheme. The China-based operation is thought to have accumulated a sizable treasury of US$3 Billion worth of crypto through deceiving investors with its internet scam. A series of tweets from crypto venture capitalist Dovey Wan suggested that the Ponzi-collected crypto was being liquidated across several well-known exchanges, and directly pointed the finger at the scammers as the instigators of the drop between Tuesday and Thursday that pushed BTC prices down ~16% over two days.

However, investigations by researchers at TokenAnalyst revealed that only a few off the Plustoken associated addresses were actively moving funds during the price drop, and a large chunk of the funds were moved into a mixing (transaction data obfustication) service about a month ago.

It is possible that much of the Plustoken news event’s market effect was indirect and speculative, influencing prices because of the signals it sent around the continued participation of bad actors in crypto. The sharp pick up in markets late last week shows bulls moved on quickly from the event, promptly readjusting sentiment and probably viewed the Plustoken reveal as a mini ‘black swan’.

Analysts view BAKKT’s approval to operate from the CFTC and the New York State Department of Financial Services as bullish for Bitcoin – as it will give large, risk-averse institutions a trusted and regulated custodian to purchase Bitcoin through.

This week in crypto events

Web3.0 Summit (Berlin) August 19-21– The platform blockchain developer community converges in Berlin this week for the Web3.0 Summit. Speakers including Edward Snowden (via Web-link), Sergay Nazarov of Chainlink and Ethereum co-founder Gavin Wood who will likely speak to the impact of the Ethereum Serenity launch in January 2020.

23rd August, Lisk Hard Fork The Lisk blockchain will soft fork this Friday primarily to improve network transaction processing efficiency and make the LSK token easier for exchanges to manage. The initial announcement of the fork on July 23rd created some short term buying activity and the actual fork may have a similar effect, although the price of LSK has fallen ~13% in the last week.

Market Cap Top 10

Crypto top 10

It was a challenging week for the majority of large cap assets, with most ending the week heavily red. Top 20 asset LINK was one of the few tokens to end the week green – up ~4% – potentially driven by the large increase in Chainlink’s on-chain transaction count over preceding two weeks.

BLX 7day 1908

Following the volatile price and volume activity for most of the week, BTC markets slowed over the weekend and prices steadily moved higher. Bitcoin’s short term macro momentum as a non-government issued currency, disconnected from geo-political uncertainty, remains strong because of continuing world trade, interest rate, forex and political tension affecting financial markets in the US, Europe and Asia.


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