Ripple price seems to be struggling near the $0.3600 and $0.3700 resistance levels against the US dollar.The price is likely to break the $0.3480 support area and decline further in the near term.There is a key bearish trend line formed with resistance near $0.3600 on the hourly chart of the XRP/USD pair (data source from Kraken).The pair could correct below the $0.3480 and $0.3400 levels, but the $0.3250 level is a strong support.Ripple price is signaling a downside correction against the US Dollar and bitcoin. XRP might decline below $0.3400, but buyers are likely to take a stand near $0.3320 or $0.3250.Ripple Price AnalysisAfter a rejection near the $0.3790 level, ripple price corrected lower against the US Dollar. The XRP/USD pair declined below the $0.3700 and $0.3600 levels. Later, the price bounced back and made a few attempts to gain strength above the $0.3700 and $0.3740 resistance levels. However, buyers failed and the price dived below the 50% Fib retracement level of the last wave from $0.3255 swing low to $0.3790 high. There was also a break below the $0.3550 level and the 100 hourly simple moving average.On the downside, the $0.3480 area acted as a strong support and prevented losses on many occasions. It also represents the 61.8% Fib retracement level of the last wave from $0.3255 swing low to $0.3790 high. At the moment, the price is flirting with the $0.3480 support and remains at a risk of more losses. If there is a downside break and close below $0.3480, then the price might extend its decline. The next stop could be near the $0.3380 level.The next key support is at $0.3320, where buyers could appear. If they fail to defend the $0.3320 support, the price may perhaps test the main $0.3250 support area. On the upside, an initial resistance is near the $0.3600 level and the 100 hourly SMA. There is also a key bearish trend lines formed with resistance near $0.3600 on the hourly chart of the XRP/USD pair. A successful break above the $0.3600 level is must for a fresh increase towards $0.3700 or even $0.3740.Looking at the chart, ripple price seems to be struggling to gain momentum above $0.3600, which might result in a short term breakdown. A close below $0.3480 and $0.3460 is likely to spark an extended drop towards the $0.3320 or $0.3250 support area in the coming sessions.Technical IndicatorsHourly MACD – The MACD for XRP/USD is gaining pace in the bearish zone.Hourly RSI (Relative Strength Index) – The RSI for XRP/USD recently declined below 50 and it is currently near 40.Major Support Levels – $0.3480, $0.3460 and $0.3320.Major Resistance Levels – $0.3590, $0.3600 and $0.3700.
Archives for April 10, 2019
ETH price extended gains, but it failed to overcome sellers near the $185 resistance against the US Dollar.The price started a downside correction and traded below the $180 and $174 supports.This week’s key bullish trend line was breached with support at $178 on the hourly chart of ETH/USD (data feed via Kraken).The pair remains at a risk of more losses, but it is likely to find a strong support above $165.Ethereum price started a downside correction versus the US Dollar and bitcoin. ETH might extend the recent correction, but bulls are likely to defend losses near the $165 support.Ethereum Price AnalysisYesterday, we discussed the chances of more gains above $180 in Ethereum price against the US Dollar. The ETH/USD pair did move higher and traded above the $180 and $182 resistance levels. There was a sharp upward move, but the price failed to break the $185 resistance area. There was a rejection pattern formed near the 61.8% Fib retracement level of the last slide from the $188 swing high to $174 low. As a result, the price started a sharp downside correction below the $182 and $180 levels.More importantly, this key bullish trend line was breached with support at $178 on the hourly chart of ETH/USD. The pair even spiked below the $174 support level and formed a new intraday low at $170.06. Recently, it recovered a few points above $173 and the 23.6% Fib retracement level of the recent drop from the $185 high to $170 low. However, the price is facing a strong resistance near the broken trend line and $178.Besides, the 50% Fib retracement level of the recent drop from the $185 high to $170 low is also acting as a resistance. It is currently trading with a bearish angle below $178 and $180. Therefore, there are chances of more losses below the $174 and $172 levels. The price might revisit the $170 level or extend losses below $170. The next major support is at $165, where buyers are likely to appear.Looking at the chart, Ethereum price clearly started a major downside correction from the $185 resistance. Therefore, there is a risk of an extended drop below the $170 support. Having said that, bulls are likely to present a solid buying opportunity near the $165 level. Conversely, if there is a break below the $165 support, the price may revisit the $156 support area.ETH Technical IndicatorsHourly MACD – The MACD for ETH/USD is gaining momentum in the bearish zone.Hourly RSI – The RSI for ETH/USD declined sharply below the 50 level and it is currently near 40.Major Support Level – $170Major Resistance Level – $180
- A draft proposal from China’s economic planning commission labels bitcoin mining as an industry that needs to be “eliminated.” But even if finalized in its current form, this would not automatically amount to an outright mining ban.
- While local governments are supposed to follow the commission’s guidance, to take action against an industry they need a basis in the laws of the state, not industrial policy.
- Further, there are past examples of “undesirable” industries that were eventually recategorized because phasing them out was found to conflict with local interests.
- Seizing on this, miners are arguing that eliminating their industry would also conflict with local interests, in part because they soak up excess electricity that would otherwise go to waste.
One of these things is not like the others.
On Sept. 4, 2017, the People’s Bank of China (PBoC), together with six other central government agencies and financial regulators, banned initial coin offerings (ICOs).
Later that month, regulators ordered the country’s bitcoin and cryptocurrency exchanges to shut down.
And on April 8 of this year, the National Development and Reform Commission (NDRC), China’s top macroeconomic planner and one of 26 cabinet-level agencies which form the State Council, published a draft proposal to amend the Catalog for Guiding Industrial Restructure.
The proposed revision, still pending public consultation, classifies “virtual currency mining, such as the production process of bitcoin” as an industry category that’s undesirable and to be eliminated, together with hundreds of other sectors.
The news was widely covered, with most media outlets leaping to the conclusion that China now wants to ban cryptocurrency mining, just as it did in 2017 with ICOs and domestic spot trading.
But to call this policy a “ban” in the same sense is misleading at best. The reality is more nuanced, and requires additional context to fully understand.
Below, CoinDesk takes a close look at the history of the NDRC’s policy recommendations to clarify what this latest guidance really means – and why it does not automatically amount to an outright ban.
A provision and a catch
The NDRC first published its catalog in 2005, grouping industrial sectors into three types – those the agency advises the country to encourage, restrict or eliminate.
It defined those to be eliminated as industries that have obsolete techniques, products, and technology, or which are unlawful, unsafe, wasteful or pollutive.
The purpose of the catalog is to serve as a macro-level economic policy to guide local governments on how to allocate their investment and resources to balance local economic growth with overall stability.
To give such policy a legal status, the State Council promulgated an “Interim Provisions on Promoting Industrial Structure Adjustment” for implementation in December 2005.
According to a translation by LexisNexis (full document included at the end of this article), Article 19 of the Interim Provisions clarifies what local governments shall do with industries that are categorized as to be eliminated.
“[Government] Investments are prohibited from being contributed to projects of the eliminated category. All financial institutions shall stop various forms of credit granting supports to such projects, and take measures to recover the granted loans,” the Article reads, adding:
“If any enterprise of the eliminated category refuses to eliminate the production technique, equipment or products, the local people’s government at each level and the relevant administrative department shall, in accordance with the relevant laws and regulations of the state, order it to stop production or close it.”
Therefore, indeed, local governments are required to take proper actions to implement what’s outlined in the NDRC’s policy guide.
But there’s a notable catch: the part about “the relevant laws and regulations of the state.”
Kai Xu, a legal practitioner in China with expertise in corporate governance and compliance, explained to CoinDesk that local governments must use related laws and regulations – not the Interim Provisions itself – as a legal basis to take forceful actions to shut down “undesirable” companies.
For instance, the State Administration for Industry and Commerce recently published a provision for administrative penalty when regulating businesses like internet advertising and e-commerce.
It outlines who is entitled to take forceful administrative actions against companies violating regulations, what the penalties are and how they should be carried out.
“Because such an action is an administrative penalty, it must have a legal ground first,” Xu said. “It’s currently unclear [how or what types of laws bitcoin mining should fall under].”
He added that the legal nature of the NDRC’s policy is different from that of the ICO ban announced by the central bank in 2017 (which clearly defined the nature of ICOs as an illegal activity, meaning any entity that still engages in that activity is subject to legal actions).
“The former is an industry policy and the latter is a departmental regulatory document,” he said.
Also importantly, the State Council emphasized at the top of the 2005 Interim Provisions that local governments, when implementing the industrial policy, are also required to balance the government guidance and the functions of the market as well as local interests.
“The relevant governments and departments shall, when implementing the ‘Interim Provisions’, correctly deal with the relationship between government guidance and market regulation, give full play to the fundamental role of the market in allocating resources, correctly deal with the relationship between development and stability, that between partial interests and overall interests, and that between immediate interests and long-term interests, so as to keep the stable and fast development of the economy.”
Xu told CoinDesk that if the final form of the policy guide includes bitcoin mining as a category to be eliminated, it will be the job of local governments and relevant departments to implement actual executional plans.
But he also pointed out there is always the possibility that a policy will not be enforced or implemented in the end, adding:
“There are many reasons to that, since executions are carried out by human beings, after all. And there may also be information costs during implementation, as well as conflicts with local interest.”
And members of the local mining community have also raised questions about whether it’s reasonable to label bitcoin mining as an industry to be eliminated, arguing that such a decision could potentially conflict with local interest.
Alex Ao, founder of Innosilicon, which manufactures cryptocurrency mining equipment, said in China’s Inner Mongolia, Xinjiang and southwestern provinces like Sichuan and Yunnan, there is excessive electricity generated every year that can neither be fully consumed by local demand nor be integrated to the State Grid to be transmitted to regions outside.
For instance, the Garze prefecture government in Sichuan has said that in 2017 alone, hydropower plants in the area generated 41.5 billion kilowatt hours (kWh) of electricity thanks to the rainy season in the summer.
But a total excess of 16.3 billion kWh went to waste due to not enough local consumption, which resulted in a direct economic loss of some 4 billion yuan, or $600 million, for local hydropower companies.
Tyler Xiong, chief marketing officer of Bixin, which operates a mining pool and wallet service, echoed that sentiment.
“First, bitcoin mining doesn’t result in pollution. It actually helps consume excessive electricity [generated by local plants] that would otherwise go to waste. And it creates jobs and revenue locally,” he said. “Eliminating that could conflict with local interest because it can benefit the local economy.”
The public now has until May 7 to submit feedback on the NDRC draft proposal. While it’s unclear when the final version will be published, the draft comes at a time when Chinese bitcoin miners have been investing to scale up their mining capacity to capture on the cheap electricity during the summer.
What happened before?
It’s worth noting that the NDRC had published and revised the policy guide multiple times over the past decade. What happened to some of the industries that were previously labeled as to be eliminated?
While it is difficult to grasp a full picture of the actual implementation over the years, one article from the People’s Daily in 2006 described certain issues local governments in Hebei encountered when eliminating energy-intensive sectors such as cement manufacturing, following the 2005 policy guide.
The article cited a comment from an official from the NDRC, explaining the policy guide was not a legal basis for taking forceful actions to shut down companies.
“It must be done in accordance to relevant laws,” the official said, a point echoed by Xu above.
In the cement-making instance, the article said most local governments used laws and regulations relating to land resources and environment management as a legal basis for taking actions.
And there are also examples where certain items were first marked for elimination, but later removed from the category, thanks to feedback gathered during implementation.
For example, in 2011, the production equipment for manufacturing cold-rolled ribbed bar (a material used in construction) was classified as a sector that should be eliminated.
In a revised version in 2013, the NDRC adjusted the wording to specify that only certain types of cold-rolled ribbed bar equipment with productivity below a threshold should be eliminated.
The NDRC explained in a separate note that the reason for the revision was because during implementation, the industry had provided feedback that there was still a considerable amount of domestic demand for cold-rolled ribbed bar making.
After gathering and studying such feedback with relevant government departments, the Commission agreed that some equipment with higher productivity and efficiency should be kept.
None of this is to downplay the attitude shown in the policy guide from the NDRC, which clearly voices a stance of not supporting cryptocurrency mining in China.
Yet the main questions that are now in the air is whether the final form of the policy will still include bitcoin mining in the “undesirable” category, and if so, how lawmakers and local governments will carry out the implementation – especially when it conflicts with potential local interest.
Chinese mining farm image via CoinDesk archive
Bitcoin has been able to continue inching higher after dropping below $5,200 earlier today, and is now approaching $5,300, which appears to be a slight level of resistance for the cryptocurrency. BTC’s upwards ascent has continued to allow many major altcoins to surge, with many cryptos trading up over 2% today.Although Bitcoin’s price is only tepidly advancing today, its large surge over the past few days has brought it closer to forming its first-ever 20-200-day simple moving average (SMA) crossover since October of 2015 – a formation that is typically proceeded by a massive price surge.Bitcoin (BTC) Stable Above $5,200 At the time of writing, Bitcoin is trading up over 1% at its current price of $5,280. Earlier today, BTC briefly dipped below $5,200, where it found some levels of buying support that pushed its price back towards $5,300.It is important to note that over the past week, Bitcoin has been rejected at $5,300 on multiple occasions, signaling that this price is a level of resistance that may require a significant surge in buying pressure to be broken above.The recent crypto market surge appears to have drastically shifted the overall market sentiment, as many investors who were previously looking to sell their crypto late last year are now looking to buy back in.“We have seen a lot of interest in people buying and holding of late. In Q4  a lot of people were dumping assets and liquidating their holdings, that has definitely shifted this year,” Lennon Sweeting, the director and head trader at Coinsquare Capital Markets, explained while speaking to MarketWatch.Famous Technical Formation May Signal that Bull Run is ImminentBitcoin’s recent price surge has brought its 20-day and 200-day SMA close to crossing each other, which is a slightly faster version of the highly bullish technical formation commonly referred to as a “golden cross.”Jonny Moe, a popular cryptocurrency trader on Twitter, spoke about this crossover in a recent tweet, explaining that he does believe that there is a strong possibility that the bottom is in for the markets.“$BTC about to have its first bullish 20-200 SMA cross since Oct 2015. Note that it took 2 of these crosses before the uptrend began. I’m not usually one to try and call out absolutes like “THE BOTTOM IS IN!!!”, but it’s certainly shaping up like that could be a real possibility,” he explained.$BTC about to have its first bullish 20-200 SMA cross since Oct 2015. Note that it took 2 of these crosses before the uptrend began.I’m not usually one to try and call out absolutes like “THE BOTTOM IS IN!!!”, but it’s certainly shaping up like that could be a real possibility. pic.twitter.com/AG1L2CUmhq— Jonny Moe (@JonnyMoeTrades) April 10, 2019Moe further explained the significance of this recent technical formation in a later tweet, noting that the standard “golden cross” occurs when the 50-day SMA crosses the 200-day SMA, and that Bitcoin’s recent SMA cross is simply a “slightly faster version of the famous ‘golden cross.’”“This is a slightly faster version of the famous ‘golden cross,’ which is typically a 50-200 cross. This is what that looks like. Still a ways away, but getting closer. This also took 2 bullish crosses before the full uptrend in 2015,” he noted.This is a slightly faster version of the famous “golden cross,” which is typically a 50-200 cross. This is what that looks like. Still a ways away, but getting closer.This also took 2 bullish crosses before the full uptrend in 2015. $BTC pic.twitter.com/PrnzEF3ddj— Jonny Moe (@JonnyMoeTrades) April 10, 2019If this formation – which has previously been highly bullish – still holds its clout as an indicator of an imminent bull run, then embattled crypto investors may soon be able to recover much of the losses that they have incurred over the past year.Featured image from Shutterstock.
Warren Davidson, arguably crypto’s best friend in Congress, reintroduced the Token Taxonomy Act yesterday. He originally introduced the bill alongside Florida representative Darren Soto last year. It never made it to a vote before the 115th Congress, but Davidson has decided to reintroduce in a Democrat-controlled 116th. The new bill already differs slightly from the original, and lawyer Jake Chervinsky says it might have more changes to come:
The Token Taxonomy Act has been re-introduced in the U.S. Congress. This is the first step in a very long legislative process: the final bill could end up quite different from today’s draft, and probably won’t see a vote any time soon. Give it a read here:https://t.co/2Cmv4Oo8sX
— Jake Chervinsky (@jchervinsky) April 9, 2019
Bill Subject to Change Pending Congressional Approval
The language of the new bill is a bit stronger than the wording in the original. The bill limits the ability of states to regulate digital tokens as securities, by adding language to the Securities Act of 1933:
No law, rule, regulation, or order, or other administrative action of any State or any political subdivision thereof (A) requiring, or with respect to, registration or qualification of securities, or registration or qualification of securities transactions, shall directly or indirectly apply to a digital token […]
One wonders what effect the bill might have on states considering the passage of Bitlicense-like laws. Immediately following this, the bill ensures that states continue to have the right to enforce against fraud.
Democrat Tulsi Gabbard On Board
Both versions of the bill seek to provide tax exemptions for the exchange of one cryptocurrency to another. It would change the reality for American crypto users: when you exchange crypto for anything besides cash, the transaction would no longer be treated as a strictly taxable situation. This part, which amends the rules governing the IRS, reads:
Gross income shall not include gain from the sale or exchange of virtual currency (as defined under section 408(m)) for other than cash or cash equivalents.
Apparently, if you exchange your Bitcoin for something worth less than $600, you don’t have to pay additional taxes related to the realization of the value of the cryptocurrency. Entire strategies for spending and holding Bitcoin can be developed around this proposed law, which reportedly has support from Tulsi Gabbard. Gabbard is running for nomination from the Democratic party for the 2020 presidential race.
Three other sponsors have also signed on, in addition to Soto and Gabbard: Josh Gottheimer, Tedd Budd, Scott Perry, according to Coindesk, who must have received a scoop on this matter. (The House’s website did not reflect any of the reported material by press time.) Most of the bill’s sponsors are members of the House Financial Services Committee, the influential body that governs banking and finance in the United States.
Cryptocurrency exchange Coinbase has launched a Visa debit card allowing customers in the U.K. and EU to spend their cryptocurrencies directly from their Coinbase accounts.
The San Francisco-based firm announced the news in a blog post on Wednesday, saying that with the “Coinbase Card,” customers will be able to spend their bitcoin (BTC), ether (ETH), litecoin (LTC) and other cryptocurrencies “as effortlessly as the money in their bank.”
The exchange said it will “instantly” convert cryptocurrency to fiat currency, such as the British pound (GBP), when customers complete a transaction using the debit card.
The card supports all crypto assets available to buy and sell on the Coinbase platform, and customers can use them to pay for everyday purchases, such as a meal or booking tickets, according to the announcement.
With previously available products of this type, customers had to pre-load a specified amount of cryptocurrency onto the card in order to spend, Coinbase said.
The exchange has also launched an app for the card on both Android and iOS platforms, enabling customers to select which cryptocurrency wallet they will use to fund their spending. The app also offers “instant” receipts, transaction summaries and spending categories.
For the first 1,000 customers, Coinbase said it will waive the card issuance fee of £4.95 ($6.48).
PaySafe, a U.K. payment processor, is the issuer of the cards, a Coinbase spokesperson told CoinDesk.
In a similar development last month, banking startup 2gether said it was launching a prepaid Visa debit card that allows users to spend cryptocurrencies. With the 2gether card, customers will be able to pay with either euros or any of the following seven cryptocurrencies: BTC, ETH, XRP, bitcoin cash (BCH), EOS, Stellar (XLM) and litecoin (LTC).
Coinbase Card image courtesy of the company
There is little doubt that digital payments tools – including bitcoin and other cryptocurrency projects – are transforming the way consumers make transactions. However, even the best digital technologies will fail if users don’t trust them.
This was the resounding message at the International Monetary Fund’s spring meeting held in Washington, D.C. on Wednesday.
Lagarde: Consumers Are Dumping Their Cash
Called “Money and Payments in the Digital Age,” one discussion included representatives from central banks and tech startups. Panelists shared their thoughts about how the economy was being reshaped by cryptocurrency and other digital technologies.
IMF Managing Director Christine Lagarde noted that cash usage is on the decline in countries around the world. For example, in Sweden a mere 13% of transactions were settled in cash last year, she said.
Consumers increasingly use their smartphones to make purchases with digital payment platforms, even if bitcoin hasn’t quite caught on as a payment instrument.
— IMF (@IMFNews) April 10, 2019
This presents a dilemma for banks. Lagarde has said central banks should consider digital currencies. On Wednesday, she added:
“Banks will have to adopt to survive, or disappear. They will have to decide cash or no cash.”
Circle CEO Jeremy Allaire: ‘In Crypto We Trust’
Jeremy Allaire, co-founder and CEO of crypto unicorn Circle, used the panel as an opportunity to explain why cryptocurrencies like bitcoin are such attractive assets.
Saying “in crypto we trust” is an effective way of saying “we believe in math”, according to Allaire. He added that since it is rooted firmly in mathematics, cryptography is a secure means to build decentralized systems. In other words, it’s trustworthy.
Circle operates a cryptocurrency exchange and is also an issuer of the USDC stablecoin.
Sarah Youngwood, the CFO of JP Morgan’s Consumer and Community Banking division, also chimed in on the usefulness of blockchain.
“With blockchain, we can put the information on the ledger so we can clear that this is a good actor and good transaction immediately instead of waiting for confirmation from [traditional means].”
JPMorgan, as CCN reported, is currently hard at work on a blockchain-based digital currency that it plans to issue to its corporate clients.
When it comes to who consumers trust with their money, Youngwood argued that financial institutions are more trusted than governments – and even technology companies.
A panel Wednesday featuring JPMorgan and Circle was set up by Christine Lagarde as a face-off between incumbent and disruptor.
The managing director of the International Monetary Fund designated roles for each person on her panel of four. In the incumbent corner: two regulators and JPMorgan. In the other: crypto fintech company Circle. The topic: “Money and Payments in the Digital Age.”
“They have each agreed to a particular game where they have been assigned a role that resembles what they do in life,” Lagarde said.
Lagarde set the stage by pointing out that cash is diminishing, mobile is on the rise and person-to-person (P2P) payments have become a gigantic market, especially in China but with very strong showings in Kenya and Europe as well.
Circle CEO Jeremy Allaire was quick to draw the thread between P2P and crypto.
Payment systems like WeChat and Alipay, he said, are simply a better user experience, but cryptocurrencies reflect an impulse that’s endemic to the web.
“I think it simply reflects the impulse that users of the internet have to connect directly and interact,” he said.
Sarah Youngwood from JPMorgan’s consumer and community banking division spoke for the bank. In her first comments, she said, “I think it’s very important: We love competition. Competition makes us better.”
The theme Youngwood returned to repeatedly was the need for regulation. “We welcome the competition as long as the activities of the competitors get regulated, and it’s solving customer issues,” she said.
Youngwood highlighted JPMorgan’s work creating a consortium of banks to offer an alternative to Venmo, called Zelle, which had $119 billion in payments in 2018. She also spoke of JPM Coin as a consortium project.
It’s worth noting here that Lagarde also asked the panel to agree that they weren’t there to discuss bitcoin. For his part, Allaire preferred to emphasize the possibilities of putting a sovereign currency on a public blockchain infrastructure.
“The classic centralized clearing and settlement systems,” he said, “we think will go the way those things have gone in the way of media and retail.”
Allaire said that if sovereign money went onto the internet in a way where people didn’t need a third party to hold their assets safely and they could trade with anyone on the planet quickly, then “they wouldn’t want to go back.”
Once that happens, he said, everyone will want to use the most stable currencies, which will mean reserve currencies. That, he predicted, will threaten governments that don’t have reserve-status money.
He pointed out that people already trust public infrastructure for sharing information, in the form of messaging and the internet. “An open internet model I think will ultimately be felt by the end users as a superior model,” Allaire said.
In math we trust?
“Banks are technology companies,” Youngwood argued, but they are companies that have a track record of providing transparency and security that customers expect.
Allaire argued the same trustworthiness can be provided with cryptography, and once people can trust math everything that needs to be verified can be checked by anyone with access to the internet.
He took this a step further and argued that the threat model for open-ledger networks is nation-state-level adversaries. That’s a much higher level of security than most banks can claim, he argued.
This argument didn’t quite seem to land with his fellow panelists, however.
Lagarde expressed doubt that consumers would want to check the math. And Youngwood moved in on the most famous cryptocurrency of all.
“There has been more fraud in bitcoins than virtually any other form of payment that has existed,” she said.
Allaire didn’t argue that point.
“Bearer instruments are really attractive to people who want to steal things,” he said. But Allaire didn’t want to overemphasize payments. “Payments is actually the sideshow. Payments is going to disappear,” he predicted. He was more interested in the automation and integration enabled by digitizing and decentralizing.
But it was the European regulator, however, who raised perhaps the most haunting concern about the future that Allaire was painting.
Benoît Cœuré of the European Central Bank’s executive board said he was concerned about “the fragility decentralization can introduce in the system if not properly managed.”
Cœuré asked the audience to think back to 2007, which is ironic since many cryptocurrency advocates point to the same time period as the industry’s impetus. Cœuré saw it differently.
“We come from a crisis that was created by risks being thinly spread across the system,” he said, saying that regulators were then told that spreading out risks as they had made the overall system more resilient. However, he told the crowd:
“It proved not to be.”
You can watch the entire panel discussion below.
Panel image (left to right: Christine Lagarde, Benoît Cœuré, Sarah Youngwood, Jeremy Allaire and Patrick Njoroge) courtesy of Circle
The crypto markets appear to have found some stability at their current prices, as many altcoins have been able to continue climbing higher while Bitcoin further solidifies its footing at just under $5,300. The market’s recent price action has been widely viewed as being bullish by analysts and traders alike – many of whom believe that the markets have found a bottom and that the persisting “Crypto Winter” has come to an end.Despite the bullish buzz surrounding the markets, a technical indicator that has empirically been accurate is now flashing a signal that cryptocurrencies are highly overbought, which could mean that a significant retrace is imminent.Crypto Markets Continue to Inch Upwards Following Recent SurgeAt the time of writing, the overall cryptocurrency market capitalization is $182.8 billion, which is up from its daily lows of $179.4 billion.Over the past few weeks, the markets have surged in value, climbing from one-month lows of $130 billion to highs of $186 billion. This surge was brought about when Bitcoin began an upwards ascent from the upper-$3,000 region to the lower-$5,000 region.Many cryptocurrencies have been able to incur massive gains during the market’s recent climb, with Bitcoin Cash surging from monthly lows of under $130 to highs of nearly $340. Litecoin has also posted some large gains that harken back to the days of the parabolic bull run, jumping from roughly $55 to highs of just under $100, before settling to its current price of just below $90.These price gains have brought about a significant amount of trading volume, with the crypto market’s 24-hour volume skyrocketing from approximately $30 billion in early-March to a high of nearly $90 billion in early-April.Technical Indicator Spells Trouble for the MarketsAlthough the recent gains have sparked confidence amongst many traders and analysts alike, the GTI Global Strength Indicator is currently signaling that the markets are highly overbought. It is also important to note that the last time this indicator signaled that the markets were this overbought was in early-January of 2018 when the markets had reached the peak of their parabolic ascent.Bloomberg, who first reported about the GTI Global Strength Indicator running into highly oversold territory, notes that the indicator is tracking the Bloomberg Galaxy Crypto Index, which is mainly composed of Bitcoin, Ethereum, and XRP – the three largest cryptocurrencies.Bloomberg Intelligence analyst, Mike McGlone, spoke about this technical indicator, explaining that the declining volume the markets have faced over the past week or so may be part of the reason that the current crypto rally could be fleeting.“A highly speculative market rallying on declining volume is not healthy. Typically you need good, strong volume and transactions to indicate an enduring trend. Bulls appear to be grasping at straws or what best fits their more emotional less rational views, positions. The emotional enthusiasm the past week appears too extreme,” he explained.As the week drags on the strength and endurance of the current rally will likely grow more apparent to cryptocurrency investors and analysts.Featured image from Shutterstock.
The CEO and co-founder of blockchain-based identity platform Civic (CVC) has stated that he does not think the crypto bear market is over just yet. Vinny Lingham Tweeted that any upward surges are ultimately unsustainable until Bitcoin price can move independently of the other digital coins.Lingham’s opinions stand in stark contrast to many analysts in the crypto industry who believe that downwards trend observed following the 2017 crash in Bitcoin prices is over. The South African entrepreneur states that too much upside without a decoupling between Bitcoin and the many alternative cryptos will ultimately lead to more investor pain.Lingham on Bitcoin and Alts: “Maybe We Need Another Bubble to Learn More Lessons?”The CEO of the Civic blockchain-based identity platform, Vinny Lingham, has offered a contrary view on the current Bitcoin and wider crypto market than those provided by many analysts of late. The South African crypto entrepreneur took to Twitter earlier today to provide his “unfiltered thoughts” on the subject:Many people believe that the crypto winter is over. Here are some of my unfiltered thoughts on this topic. Charts & technicals aside, I don’t believe this rally is sustainable for one reason: The market has not yet decoupled the various crypto assets from Bitcoin.— Vinny Lingham (@VinnyLingham) April 10, 2019Unlike Fundstrat’s Tom Lee, RT News’s Max Keiser, and Morgan Creek Digital’s Anthony Pompliano, Lingham does not believe that “Bitcoin is back” just yet. Instead, he states the latest dramatic price move upwards will likely end in more downside for the leading digital asset by market capitalisation.The CEO bases his opinion on the fact that Bitcoin is still largely correlated to the rest of the crypto space in terms of price. He states that altcoins still rise alongside Bitcoin, “irrespective of value”:“Bitcoin could double overnight, but does this mean other assets should too, even if nothing has changed on their end in term [sic] of development, network etc?”Lingham believes that a fair price could be $10,000, $20,000, or even $100,000 per Bitcoin. However, to get there the number one digital asset must increase its dominance over the rest of the crypto market.He states that the current situation in which alts rise in tandem with Bitcoin is indicative of non-Bitcoin cryptos getting boosted by improvements to BTC’s fundamentals and that this is ultimately contrary to logic:“How can we have a situation where the market price of one asset dictates the value ascribed to other unrelated assets, irrespective of whether or not anything changes in their own separate networks.”Ultimately, Lingham shares the view of controversial yet often-proved-right YouTube technical analyst, Tone Vays. Vays, a fierce Bitcoin maximalist, states that Bitcoin simply cannot have reversed the trend it has been stuck in for over a year now until it is able to decouple completely from altcoins.The former Wall Street trader believes that the current movement is simply another bull trap and Bitcoin price will most likely return to between the $1,000 to $2,000 range in the short to medium term. During this drop, Vays claims that alts will suffer much more and ultimately never recover. Once investor confidence is truly desecrated, BTC can move northwards in a sustainable fashion once again.Although less forthcoming with price targets than Vays, Lingham’s Tweet today seems to echo this sentiment:“The key indicator for the start of a sustainable bull run is likely a decoupling of asset values from Bitcoin (i.e. Bitcoin’s strength weakens other networks or vice versa). Anything else is just speculation again (maybe we need another bubble to learn more lessons?”Finally, the Civic CEO states that a move to the upside of $6,200 for Bitcoin could result in much more dramatic gains. However, he goes on to warn that the correction following such a surge is likely to be extremely violent, unless the decoupling himself and Vays are calling for occurs prior to or during such a move. Related Reading: Bitcoin Rally to $5,000 Is “Nail In The Coffin” For Bears, Says Prominent InvestorFeatured Image from Shutterstock.