No bottom in sight as cryptocurrency pain deepens

The great cryptocurrency crash of 2018 is heading for its worst week yet.

Bitcoin sank towards US$4 000 and most of its peers tumbled on Friday, extending the Bloomberg Galaxy Crypto Index’s weekly decline to 25%. That’s the worst five-day stretch since crypto-mania peaked in early January.

After an epic rally last year that exceeded many of history’s most notorious bubbles, cryptocurrencies have become mired in a nearly $700-billion rout that shows few signs of abating.

Many of the concerns that sparked the 2018 slump — including increased regulatory scrutiny, community infighting and exchange snafus — have only intensified this week. Even after losses exceeding 70% for most virtual currencies, Oanda’s Stephen Innes has yet to see strong evidence of a capitulation that might signal a market bottom.

“There’s still a lot of people in this game,” Innes, head of trading for Asia Pacific at Oanda, said by phone from Singapore. If bitcoin “collapses, if we start to see a run down toward $3 000, this thing is going to be a monster. People will be running for the exits.”

Innes said his base case forecast is for bitcoin to trade between $3 500 and $6 500 in the short term, with the potential to fall to $2 500 by January.

The largest cryptocurrency retreated 4.4% to $4 237 at 11.31am in Hong Kong, according to Bloomberg composite pricing. Rivals ether, ripple and litecoin all declined at least 4.8%. The market value of all cryptocurrencies tracked by CoinMarketCap.com sank to $138-billion, down from about $835-billion at the market peak in January.  — Reported by Eric Lam, (c) 2018 Bloomberg LP