Brief Market Update 6–12–2018

Picture Cred: Btcmangager

This article is just a brief update on the entire cryptocurrency space (not just one coin). The purpose of this article is to take an in-depth look at the market in the immediate context and gain a better perspective on what may or may not happen in the immediate future.

This article is not financial advice. I am not responsible for any money you lose/gain due to what you read below, nor am I advocating for a specific course of action.

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Here’s a brief market update 6–11–2018:

As noted in the Telegram (t.me/CoinEducation) the aggregate crypto market capitalization is currently sitting at $300 billion (data from Coinmarketcap).

Throughout the day (June 11th, 2018) and prior to that, the market capitalization had dipped as low as $290 billion and even slightly below that.

Even as I type this (in live time refreshing the page), it appears as though the market capitalization has shot up another $2 billion. So, there’s definitely money that’s flooding back into the markets.

As I’ve noted in my prior market analyses, Bitcoin is a good benchmark, but it by no means is “leading the way” in terms of money moving in or out of the market.

View story at Medium.com

This money is being stuffed primarily into altcoins and that’s where money in this space tends to flow in and out of first before the T10 coins are impacted.

The MVIS indices indicates as much, too. The MVIS that has created various indices out of the T100 coins.

You can check out this link here and decipher the differences among them and the weights+components in every index yourselves: https://www.mvis-indices.com/indices/digital-assets/mvis-cryptocompare-digital-assets-100-large-cap

Basically, the chart is pretty easy to read. It’s showing that all of the related indices are spiking upward and have been doing so for a relatively sustained period of time throughout the day.

Volume

Perhaps the most useful indicator that the sell-off has concluded is the volume.

During the sell-off, the volume had reached a height of nearly $20 billion per 24-hour period.

On June 10th, 2018, the volume had reached an approximate total of $20.06 billion (per 24 hours of trade).

From that point, the market capitalization had dipped down to as low as $293 billion.

The prices of several of the major cryptos (T10), had also dropped as a result. This led many to believe that it was a further continuation of the sell-off that took place on June 9th and June 10th.

However, this is not the case (at least not necessarily). It appears that this slight dip during the market’s recovery may have been due to the news of a South Korean-based cryptocurrency exchange being hacked.

Source: https://bitcoinmagazine.com/articles/south-korean-exchange-coinrail-hacked-40-million-crypto-reported-stolen/

I’m Not Sure if I Buy the Theory That This Hack Really Moved the Market

Personally, I’m a little incredulous as to whether this event prompted a drop in the price of Bitcoin and the market as a whole — but that is the narrative that all major publications in the cryptosphere have decided to sell everyone, so that is what we will go with for the time being.

It is worth noting, however, that the reason that I am skeptical is because:

$40 million is absolutely nothing in the grand scheme of things these days.

This was not a major exchange that got hacked. Perhaps if this were HitBTC/KuCoin or an exchange of comparable quality, then I would understand why. But I just have a hard time wrapping my head around how the hack of a tiny Korean exchange (in relation to some of the giants in the space currently), would precipitate any real price action in Bitcoin.

Reason(s) Why the Theory Could Hold Weight

However, one theory that I believe is plausible is the idea that this hack, in itself, was not significant, but the ripple effect that it may have in the South Korean government overseeing cryptocurrency trading could be strong.

For those that are unaware, the Korean government has held a tone toward cryptocurrencies that could be best described as cautiously pessimistic.

View story at Medium.com

Despite their seemingly bearish stance, getting an accurate pulse of the South Korean’s government’s actual disposition toward cryptocurrencies is a bit hard to gauge at this point in time.

This is due largely in part to the fact that it seems that South Korea’s government is splintered in terms of their support/opposition for cryptocurrency, the government is still debating whether cryptocurrency poses itself as a potential threat or benefit to their society and financial sector, the understanding of cryptocurrency and this space, in general, is still limited among most governments in the world, and there has also been a slew of misinformation/outright disinformation due to an assortment of causes that range from translation issues to outright market manipulation.

Thus, it stands to reason that the CoinRail hack may be the proverbial straw that breaks the camel’s back in South Korea. Although it does not seem so at this very moment, this is the only rationale/philosophy that I found plausible for the news of this hack would have really affected the market. I guess its worth entertaining the possibility that there may have been a general fear that there was a vulnerability in exchanges, in general, and that CoinRail would have just been the first of many.

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