MAX Digital Asset Weekly, Nov 23 2018

Digital Assets down another 26% this week bringing declines over the past month to ~37%. Declines remained very broad based with virtually all of the top coins / tokens down significantly this week. Smaller coins and tokens continued to be the hardest hit with Utility Tokens -34% and Small Caps -31%.

Trading remained active with volume in the most liquid coins / tokens up another ~10% from the previous week and average daily turnover in BTC now tracking US$5B Month to Date (the best since May and tracking +30% MoM).

The mining industry remained in focus with 1) the hash battle between the competing BCH camps continuing to play out – fueling speculation that miners were being forced to sell BTC holdings to finance their BCH mining, 2) overall BTC hash rate falling to a 4.5 month low (as miners redirected hash to support their preferred BCH camp and as unprofitable miners went online), 3) reports that miners in China are selling old rigs for scrap, 4) a bankruptcy in the US and 5) speculation that subsidies for miners in Norway could be shelved.

While speculation of miner BTC selling is possible, it is clearly being exasperated by retail panic. Selling in the US looks especially intense with volumes from Poloniex, Kraken and Coinbase Pro up significantly following reports of increased SEC scrutiny on ICO projects.

Despite maximum pessimism across the digital asset space, and several calls for Bitcoin to drop into the ~ $2–3000~range, it seems likely that some type of bounce will play out over the next few days. Should we fail to bounce over the next 2–3 days, the more likely it is that we test these lower bounds that the crypto bears remain fixated on. Whilst a bounce may sound like wishful thinking given the apparent barrage of negative news flow, this commentator feels news flow is a lagging indicator & expects price through the eventual trough to turn many weeks if not months ahead of broad sentiment. Technicals remain the most s-term supportive factor given RSI’s on many major digital assets are at either multi month and in some cases multi year lows, which comes on the heels of a 35%~ weekly decline on largely capitulative volumes.