Cash

Jan 21 2021

President Biden Walks Back FinCEN’s Self Hosted Wallet Proposal

There have been many discussions over what the Biden administration has in store for the crypto industry once it settles in. So far, the 46th President appears to be showing promising signs towards the industry with his latest move.

A Great Start

Less than a day after taking office, President Joe Biden has enforced a freeze on all federal regulatory processes. In a White House memorandum for all federal agencies’ heads, the President confirmed that he would halt all agency rules that are pending reviews for at least sixty days.

While the memorandum doesn’t mention it explicitly, it will also apply to a recent controversial ruling from former Treasury Secretary Steve Mnuchin. Last month, the FinCEN published a proposal to limit money services businesses, including crypto exchanges registered in the United States, from doing business with self-hosted wallets.

As the announcement explained, the rules will require crypto exchanges to verify their customers’ identities if a counterparty uses an unhosted wallet and the transaction exceeds $3,000. The rue’s proposal was open for comments, and reactions have been swift.

The latest company to react to the ruling is VC firm Andreessen Horowitz. A blog post from the company earlier this month described the ruling as “a rushed, non-vetted rule under the cloak of the holidays that violates the government’s own established rulemaking procedures.”

Kathryn Haun, Andreessen Horowitz’s general partner, added that such a stringent ruling doesn’t apply to any other type of financial institution. She added that apart from failing to solve any of the problems it claims to address, the rule also violated the Fourth Amendment by expanding the Bank Secrecy Act’s scope.

Now that the Biden administration has put a clamp on it, the new President has a chance to approach crypto regulations from a more nuanced perspective.

Mnuchin’s Many Failures

The 11th-hour ruling isn’t the only legislation that had caused a significant headache for many crypto companies. Through the Financial Crimes Enforcement Network (FinCEN), the former Treasury Secretary, along with the Federal Reserve, published a notice to modify a long-standing anti-money laundering (AML) rule from the government.

The notice, published last October, proposed reducing the $3,000 threshold for international transactions that had been in place since 1995. It essentially meant that financial institutions would need to exchange client information for all transactions greater than the new threshold of $250. Compliance with the new rule would have especially put pressure on crypto exchanges.

The FinCEN and Federal Reserve published the notice and asked for comments, and many in the crypto space immediately voiced their dissent towards it. Jack Dorsey, the chief executive of payment processor Square, sent a letter earlier this month warning that the rule change would drive customers out of the United States en masse.

As Dorsey explained, the rule change goes far beyond what is expected for cash transactions. He also asserted that some companies could be forced to collect “unreliable data about people who have not opted into our service or signed up as our customers.” Eventually, the rule could drive cryptocurrency users towards non-custodial, unregulated crypto services based outside the United States, effectively damaging the country’s stance in the digital finance space.

President Biden Walks Back FinCEN’s Self Hosted Wallet Proposal

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Jan 20 2021

Price analysis 1/20: BTC, ETH, DOT, XRP, ADA, LTC, BCH, LINK, XLM, BNB

When an asset is in an overbought condition and traders are sitting on large profits, even minor negative news and events could trigger profit-booking. This seems to have happened following Janet Yellen’s adverse comments on cryptocurrencies during a virtual hearing with the U.S. Senate Finance Committee.

In the same meeting, Yellen also told Congress to “act big” in order to support the U.S. economy. Another round of stimulus would probably further weaken the U.S. dollar and drive investors into assets that are considered as a store of value. This means Yellen’s comments may have inadvertently boosted the sentiment surrounding gold and Bitcoin (BTC).

*Daily cryptocurrency market performance. Source:* *Coin360*

As the fundamental factors supporting the current bull run are still intact, the institutional investors who had missed out on the rally at lower levels may use the current dip to build positions.

Glassnode data shows that large investors have been aggressively adding Bitcoin to their portfolios and the number of wallets holding over 1,000 Bitcoin has risen to a new all-time high. Since the start of 2021, 164 new wallets with over 1,000 Bitcoin have been created, indicating that whales are bullish despite the current BTC price correction.

Let’s study the charts of the top-10 cryptocurrencies to spot the critical support levels where buyers may start cherry-picking.

BTC/USD

Bitcoin has broken below the symmetrical triangle pattern but the bulls are currently attempting to defend the 20-day exponential moving average ($34,626). In an uptrend, traders buy the dip to the 20-day EMA as it offers a low-risk entry opportunity and a bounce off it reiterates the strength in the trend.

The 20-day EMA is flattening out and the relative strength index (RSI) has gradually dropped from the deeply overbought territory to the midpoint, which suggests a balance between supply and demand.

If the BTC/USD pair sustains below the 20-day EMA, it could drop to the 38.2% Fibonacci retracement level at $29,688.10. The bulls are likely to defend this support aggressively. If they succeed, this level may act as the support of the range while $40,000 could act as the resistance.

The positive view could be negated if the bears sink the price below the 50-day simple moving average ($27,596). Such a move could open the possibility of a fall to the 61.8% Fibonacci retracement level at $22,106.73.

ETH/USD

Ether (ETH) rallied to a new all-time high on Jan. 19, indicating that the bulls are in command. The upsloping moving averages and the RSI near the overbought territory suggest the path of least resistance is to the upside.

Usually, after every breakout from a resistance, the price returns to retest the level. The same has happened in the ETH/USD pair where the bulls are trying to flip $1,300 into support. If they succeed, this level will act as a new floor.

The long tail on today’s candlestick suggests traders are buying on dips below $1,300. If they manage to close the price above $1,300, the pair may attempt to resume the uptrend. If the bulls push the price above $1,438.318, the pair could rally to $1,675.

Contrary to this assumption, if the pair sinks and sustains below $1,300, the next drop is likely to be the 20-day EMA ($1,129). A bounce off this support will suggest the sentiment remains bullish, but if the bears sink the pair below the 20-day EMA a short-term top may be in place.

DOT/USD

After the sharp rally of the past few days, Polkadot (DOT) has entered a minor correction. The altcoin had today dipped to the 38.2% Fibonacci retracement level at $14.7259, which is acting as a strong support.

The long tail on today’s candlestick shows that traders are not waiting for a deeper correction to buy as they anticipate higher levels in the future. If the bulls can push the price above $19.40, the uptrend could resume with the next target objective at $24 and then $30.

Contrary to this assumption, if the bears sink the price below $14.7259, the selling may intensify and the pair could drop to the 50% retracement level at $13.2821 and then to the 20-day EMA ($12.32).

If the pair rebounds off the 20-day EMA, it will suggest the uptrend remains intact but if this support cracks, the decline could extend to $11.8383. The deeper the correction, the longer it is likely to take for the uptrend to resume.

XRP/USD

XRP rose above the 20-day EMA ($0.297) on Jan. 19 but the bulls could not sustain the higher levels, indicating traders are offloading their positions on every minor attempt to rally.

The price action of the past few days has formed a descending triangle pattern. If the bears sink the price below the $0.25 support, the XRP/USD pair could drop to the critical support at $0.169. A break below this level could resume the downtrend with the next target objective at $0.10.

On the other hand, if the bulls defend the $0.25 support and push the price above the downtrend line, the pair may rise to $0.385 and stay range-bound between these two levels for a few more days. A new uptrend could begin on a breakout and close above $0.385.

ADA/USD

Cardano (ADA) has pulled back from the stiff overhead resistance at $0.40, which shows short-term traders may be booking profits. The shallow correction and the long tail on the day’s candlestick show the bulls are attempting to flip the previous resistance at $0.34 into support.

If they succeed, the bulls will make one more attempt to thrust the ADA/USD pair above the $0.40 resistance and resume the uptrend. If they manage to do that, the next stop could be the psychological resistance at $0.50.

The upsloping moving averages suggest the trend remains in favor of the bulls but the negative divergence on the RSI indicates the momentum may be weakening. If the price sustains below $0.34, a drop to the 20-day EMA ($0.30) is likely.

A strong rebound off this support will indicate the uptrend remains intact but a break below it will suggest the possibility of a deeper correction to $0.26.

LTC/USD

The bulls pushed Litecoin (LTC) above the 61.8% Fibonacci retracement level at $157.6904 on Jan. 19 but could not sustain the higher levels due to the bear onslaught, as seen from the long wick on the day’s candlestick.

If the bears can sustain the price below the 20-day EMA ($145), the LTC/USD pair could drop to $130 and then to $120. This is an important support to watch out for because a break below it could signal the bears are back in the game.

The flat 20-day EMA and the RSI close to the midpoint suggests a balance between supply and demand. This could keep the pair range-bound between $130 and $160. On the upside, a breakout and close above $160 may resume the uptrend.

BCH/USD

Bitcoin Cash (BCH) broke above the $539 resistance on Jan. 19, but the long wick on the day’s candlestick suggests the bears had other plans as they sold aggressively, trapping the bulls who may have purchased the breakout.

The BCH/USD pair dipped to the uptrend line but the long tail on today’s candlestick suggests the bulls aggressively defended this support. If the bulls can push the price above $539, a rally to $630 is possible.

On the contrary, if the pair breaks below the uptrend line, it will suggest the bears have overpowered the bulls. This will signal a possible trend change and the pair could then drop to the next critical support at $370.

LINK/USD

Chainlink (LINK) is currently correcting the sharp up-move of the past few days. Aggressive profit-booking by traders had pulled the price below $20.1111, but the long tail on today’s candlestick suggests strong buying at lower levels.

Both upsloping moving averages and the RSI in the positive zone suggest bulls have the upper hand. If the LINK/USD pair rebounds off the current levels, the bulls will try to push the price above $23.767 and resume the uptrend. The next level to watch on the upside is $27 and then $30.

Contrary to this assumption, if the bears sustain the price below $20.1111, the pair may drop to $17.7777, which is just above the 20-day EMA ($17.58). If the pair rebounds off this level and rises above $20.1111, the bulls will try to resume the uptrend.

This positive view will invalidate if the selling breaks the 20-day EMA support. Such a move will indicate the bulls are not buying the dips anymore, signaling a change in sentiment.

XLM/USD

Stellar Lumens (XLM) continues to trade inside the $0.26 to $0.325 range. The bulls tried to push the price above the range on Jan. 19 but failed, which shows the bears are active at higher levels.

The sellers will now try to sink the XLM/USD pair below the support of the range, but they are likely to encounter strong buying from the bulls. The upsloping moving averages and the RSI in the positive zone suggest the bulls are unlikely to give up easily.

A strong rebound off the 20-day EMA ($0.263) could extend the consolidation by a few more days. Contrary to this assumption, if the bears sink the price below the $0.26 support, the selling could intensify and that may pull the pair down to the 50-day SMA ($0.201).

BNB/USD

Binance Coin (BNB) tried to resume the uptrend on Jan. 18 and 19 but the bulls could not sustain the higher levels. Aggressive profit-booking on Jan. 19 started a correction that has reached the 20-day EMA ($40.99).

If the bears can sink and sustain the price below the 20-day EMA, the BNB/USD pair may drop to the support line of the ascending broadening wedge pattern. The bulls will attempt to defend this support and if they succeed, the pair may extend its stay inside the pattern.

Conversely, if the bears sink the price below the support line, it will complete the bearish setup, which has a target objective at $26.7273. But the pair is unlikely to plunge to the target level in a hurry because the bulls could offer strong support at $35.69.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Market data is provided by HitBTC exchange.

Price analysis 1/20: BTC, ETH, DOT, XRP, ADA, LTC, BCH, LINK, XLM, BNB

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Jan 18 2021

China’s BSN to Launch Global CBDC Payment System Beta in 2021

China’s lead in the race for developing a Central Bank Digital Currency (CBDC) is unassailable at this point. The country is making further progress, with the government’s blockchain service network looking to release a CBDC network beta this year.

Safe, Low-Cost CBDC Payments

China’s Blockchain-based Service Network (BSN) has announced plans to launch a public beta for a global CBDC network, per a blog post.

The BSN is a blockchain network that enables digital token and decentralized app (dApp) development.

In the post, the state-sponsored network explained that it would invest a considerable amount in research and development this year. The network plans to focus on digital payments primarily as it is working towards launching a Universal Digital Payment Network (UDPN).

Speaking on digital payments, the BSN pointed out that stablecoins and CBDCs have become more prominent across the world as countries look to embrace e-payments fully. The network plans to launch a payment network based on all developed CBDCs in the next five years.

“This digital payment network will completely change the current payment and circulation method, enabling a standardized digital currency transfer method and payment procedure for any information system,” the BSN explained, adding that a convenient, cost-effective beta will be available in the second half of this year.

With the payment network, the BSN is looking to provide a standard digital currency transfer procedure. It aims to combine systems like insurance, banking, enterprise resource allocation, and mobile apps through dedicated application program interfaces (APIs) to make global payments safe and cheaper.

The payment network is one of BSN’s four objectives for the year. The other three include expanding its network, promoting its new private platform, and expanding its ecosystem. In addition, the BSN reiterated its commitment to enhancing blockchain capabilities to companies and governments worldwide.

China Forges On With Digital Yuan

So far, digital yuan has been one of China’s most ambitious economic and financial projects. Officially launched in late 2019, the project has gone through extensive tests last year and looks to be entering advanced testing phases.

Last year saw several firms and government agencies partner on testing the CBDC in several real-world situations, mainly through giveaways and retail spending. The developers haven’t relented in their efforts this year as they look to strengthen their research and testing base.

Last week, local news sources confirmed that the Agricultural Bank of China, one of the country’s largest state-owned banks, had launched ATMs for the digital yuan. As the reports explained, the machines were installed at specific branches within Shenzhen. Customers at these branches have been able to spend and convert the digital yuan tokens they got as a part of the government’s “red envelope” lottery – a project that saw the government hand out $3 million worth of the asset to 100,000 citizens.

The machines reportedly allow digital yuan deposits and withdrawals via a smartphone app. Users can also convert their savings and cash to the CBDC.

China’s BSN to Launch Global CBDC Payment System Beta in 2021

Source

Jan 13 2021

Wall Street Veteran Howard Marks Reconsiders Bitcoin Stance Amid Bullish Run

Despite a few setbacks, it’s safe to say that Bitcoin is continuing its forward trajectory. At the same time, several skeptics are starting to change their tone concerning the leading cryptocurrency.

The latest skeptic-turned-enthusiast is Howard Marks, the co-founder, and co-chairman of asset management giant Oaktree Capital Management.

Son Convinces Daddy

Oaktree is the largest investor of distressed securities in the world. Based in Los Angeles, the company holds about $140 billion in asset management.

In an investor memo shared earlier this week, Marks explained that he was beginning to change his skeptical views on Bitcoin, with the asset showing considerable maturity over the past few years.

Marks was a staunch critic of Bitcoin in the 2017 bull run.

At the time, the investment guru warned that Bitcoin was no more than a fad, and that investors would eventually lose a fortune when its bubble popped. In his memo, Marks explained that Bitcoin was essentially a pyramid scheme, with enthusiasts ascribing it a value based on peoples’ willingness to pay for it.

The value investor turned out to be right as Bitcoin plunged after reaching almost $20,000 per token.

However, with Bitcoin now leaving its previous all-time high in the dust, even Marks has alluded that he could have been wrong.

In his recent memo, the investor explained that he had been talking with his son, Andrew Marks, about cryptocurrencies. He added that Andrew was a strong Bitcoin enthusiast and had “thankfully” bought up a few on behalf of the family. Apparently, Andrew had been able to convince him.

As Marks explained, he had not been fully pro-Bitcoin. However, he acknowledged that he would need to at least examine the asset and its potential.

“When innovations work, it’s only later that what first seemed crazy becomes consensus. Without attaining real knowledge of what’s going on and attempting to fully understand the positive case, it’s impossible to have a sufficiently informed view to warrant the dismissiveness that many of us exhibit in the face of innovation,” the value investor said.

Wall Street Loves Crypto

Marks is just the latest Wall Street giant who appears to be warming up to crypto.

Last month, Ray Dalio, the founder of hedge fund giant Bridgewater Associates, explained in a Reddit “Ask Me Anything” session that gold and Bitcoin provided the best alternative investment for people looking to divest from stocks and cash.

The billionaire hedge fund manager has previously criticized Bitcoin for its volatility and other failures as a currency.

With Wall Street stalwarts interested in crypto, there is hope that they will back some of that interest with investments. Institutional investment helped the crypto space grow last year, and with retail looking strong again, a push from top firms could take the leading cryptocurrency to unprecedented heights.

Wall Street Veteran Howard Marks Reconsiders Bitcoin Stance Amid Bullish Run

Source

Jan 01 2021

Price analysis 1/1: BTC, ETH, XRP, LTC, DOT, BCH, ADA, BNB, LINK, BSV

Bitcoin (BTC) rallied from an intraday low at $17,573.29 on Dec. 11 to an intraday high at $29,310.19 on Dec. 31, a 66.78% rally in a short span. This shows strong demand from traders at every higher level.

Institutional crypto investment giant Grayscale bought 72,950 Bitcoin in December, which was 159.49% more than the 28,112 Bitcoin mined during that period, according to data from Coin98 Analytics.

It is not only the institutions buying — a strong bull run also attracts speculators and momentum traders who try to piggyback on the up-move. This can be seen from the surge in Bitcoin’s transaction volume in December 2020, according to on-chain analytics resource Digital Assets Data.

However, at some level, buyers will stop chasing prices higher, and that could cause the rally to turn down. When it does, the speculators and momentum traders may rush to the exit, and the buyers are likely to wait for lower levels to purchase again. This scenario could result in a sharp pullback. Hence, traders should employ suitable risk management strategies.

In a strong bull run, traders may watch the resistance levels for signs of a possible turnaround, but when the levels are scaled with ease, it shows that the trend remains strong. Let’s study the charts of the top 10 cryptocurrencies to identify the critical resistance levels on the upside.

BTC/USD

Bitcoin (BTC) is in a strong uptrend, and traders are buying every intraday dip without waiting for a deeper correction. The long-legged Doji candlestick pattern on Dec. 31 suggests that bears tried to start a correction but the bulls bought the dip aggressively.

However, the strong up-move of the past few days has pushed the relative strength index (RSI) deep into the overbought territory. This suggests the BTC/USD pair could enter a minor consolidation or correction near the $30,000 mark.

Contrary to this assumption, if the bulls drive the price above $30,000, the pair could continue its rally and rise to $37,000. But with every leg up, the risk to the downside increases.

If the price turns down from $30,000, the pair could drop to the 20-day exponential moving average ($24,842). A strong rebound off this level will suggest that the uptrend remains intact, but a break below it could pull the pair down to the 50-day simple moving average ($20,614).

ETH/USD

Ether (ETH) has been facing resistance near the $750 level for the past few days, but the positive sign is that the bulls have not given up much ground. This suggests that traders are not booking profits aggressively, as they expect the uptrend to resume.

If the bulls can push and sustain the price above $750, the ETH/USD pair may rally to $800 where the bears may again try to stall the uptrend. The rising moving averages and the RSI near the overbought zone suggest that bulls have the upper hand.

However, if the pair dips below $717, the correction could deepen to the 20-day EMA ($663). If the price rebounds off this support, it will suggest that the sentiment remains bullish and traders are buying on dips.

On the contrary, a break below the 20-day EMA will suggest that traders are not buying the dips and are booking profits aggressively. That could signal the start of a deeper correction.

XRP/USD

XRP formed an inside day candlestick pattern on Dec. 30 and 31, which shows indecision among the bulls and bears. The uncertainty resolved to the upside today, and the bulls have started a relief rally.

In a strong downtrend, traders use rallies to establish short positions or close their long positions. The downsloping 20-day EMA and the RSI near the overbought territory suggest that bears are in command.

Therefore, the current attempt to move up may face strong resistance at the 20-day EMA ($0.357). If the price turns down from this level, the bears will try to resume the downtrend. If they can sink the price below $0.172536, the XRP/USD pair could fall to $0.10.

This negative view will be invalidated if the bears push the price above the 20-day EMA. Such a move will suggest that selling has exhausted, and a few days of range-bound action could follow.

LTC/USD

Litecoin (LTC) has held above $124.1278 for the past few days, which suggests that the bulls are attempting to flip this level to support. The upsloping moving averages and the RSI in the positive zone suggest that the bulls are in control.

If the bulls can propel the price above the $140 resistance, the LTC/USD pair may resume its uptrend. The bears may again try to stall the rally at the psychological resistance at $150, but if this level is scaled, the up-move could reach $160.

Contrary to this assumption, if the bears sink and sustain the price below $124.1278, the pair may drop to the 20-day EMA ($113.79).

If the price rebounds off this level, the bulls will again try to resume the uptrend. However, a break below the 20-day EMA will open up the possibilities for a deeper correction to the 50-day SMA ($91.96).

DOT/USD

Polkadot (DOT) resumed its up-move after a one-day minor correction on Dec. 30. The 28.145% rally on Dec. 31 shows that the altcoin is backed by strong momentum.

However, the uptrend has pushed the RSI into the overbought territory, and the bears are currently trying to stall the up-move in the $9.51 to $10 overhead resistance zone.

If the DOT/USD pair again witnesses a minor correction and turns up from the 38.2% Fibonacci retracement level at $7.7614, it will suggest that traders are not closing their positions in a hurry and are buying on every minor dip. This may push the pair to $11.

Conversely, if the bears pull the price below $7.7614, a retest of the breakout level at $6.8619 is possible.

BCH/USD

Bitcoin Cash (BCH) turned down from the $370 overhead resistance on Dec. 28 and slipped below the $353 support on Dec. 31. The bulls are currently attempting to sustain the price above the 20-day EMA ($323).

If the price turns up from the current levels, the bulls will make one more attempt to drive the price above $370. The upsloping moving averages and the RSI in the positive zone suggest that bulls have the upper hand.

A breakout and close above $370 could resume the up-move, and the BCH/USD pair could reach $430 and then $500. This positive view will be invalidated and the pair may remain stuck in the range if the bears sink the price below the 20-day EMA.

ADA/USD

Cardano’s ADA has been holding above the $0.175 support for the past two days, which suggests that the bulls have been purchasing the dips to this level. However, the failure to resume the up-move indicates that demand dries up at higher levels.

The range has contracted for the past two days, and soon, this will be followed by a range expansion. If the range resolves to the upside and the bulls push the price above $0.1966315, the ADA/USD pair could rally to $0.22 and then to $0.235.

The rising moving averages and the RSI in the positive zone suggest that the path of least resistance is to the upside. This positive view will be invalidated if the bears sink and sustain the price below the 20-day EMA ($0.165). If that happens, it will suggest that the recent breakout was a bull trap.

BNB/USD

Binance Coin (BNB) did not even correct to the 38.2% Fibonacci retracement level of the latest leg of the rally, and it turned up from $36.5157 on Dec. 31. This suggests that traders aggressively bought the dip.

If the bulls can push the price above the $40 resistance, the BNB/USD pair could resume its rally and reach $45 and then $50. The rising moving averages and the RSI near the overbought territory indicate bulls are in control.

Contrary to this assumption, if the price again turns down from $40, the pair may remain range-bound between $35.69 and $40 for a few days. The trend could change if the bears sink the price below the 20-day EMA ($34).

LINK/USD

Chainlink’s LINK is trading inside a descending channel. The failure of the bears to sink and sustain the price below the $11.29 support has attracted buyers today who are attempting to push the price above the 20-day EMA ($12.13).

If they succeed, the LINK/USD pair could rise to the resistance line of the channel. A break above the channel and the $13.28 resistance could start a new uptrend that could reach $16.39.

However, if the price turns down from the current levels or the resistance line of the channel, then the bears will again try to break the $11.29 support. If they manage to do that, the pair could drop to $10 and then to the support line of the channel near $9.60.

BSV/USD

The bulls are struggling to push Bitcoin SV (BSV) above the 20-day EMA ($167), and the bears are not able to sustain the price below $160. This suggests a balance between supply and demand, but this tight range action may not continue for long.

If the bulls push the price above the moving averages, the BSV/USD pair could rally to $181 where the bears are likely to mount a stiff resistance. If the price turns down from this level, the range-bound action is likely to extend for a few more days.

On the other hand, if the pair dips below $160, the pair could drop to $146 where the buyers may step in. A strong bounce could keep the price inside the angle for some more time. The indicators are not showing a clear advantage either to the bulls or the bears.

Market data is provided by HitBTC exchange.

Price analysis 1/1: BTC, ETH, XRP, LTC, DOT, BCH, ADA, BNB, LINK, BSV

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