There was a decent rise in bitcoin price above the $10,500 resistance level against the US Dollar.The price climbed higher and even broke the key $10,650 and $10,800 resistance levels.There is a major ascending channel forming with support at $10,700 on the 4-hours chart of the BTC/USD pair (data feed from Kraken).The pair is climbing higher and it could continue to rise above the $11,000 resistance area.Bitcoin price is gaining momentum above $10,500 against the US Dollar. BTC price is likely to extend gains above the $11,000 and $11,200 resistance levels.Bitcoin Price Weekly Analysis (BTC)In the past few days, there was a steady rise in bitcoin price above the $10,200 resistance against the US Dollar. The BTC/USD pair climbed higher and gained traction above the $10,500 and $10,800 resistance levels. There was a sustained close above the $10,200 resistance and the 100 simple moving average (4-hours). A swing high was formed near $10,940 and the price is currently correcting lower.An immediate support is near the $10.750 level. Moreover, there is a major ascending channel forming with support at $10,700 on the 4-hours chart of the BTC/USD pair. Below the channel support, the 23.6% Fib retracement level of the last upward move from the $9,125 low to $10,941 high might act as a support. Additionally, the main support is near the $10.500 level, below which there are chances of an extended decline in the near term.The next major support is near the $10,200 and $10,000 support levels. The 50% Fib retracement level of the last upward move from the $9,125 low to $10,941 high is also likely to act as a support. Moreover, the 100 SMA is also near the $10,050 level, which is likely to act as a strong support. On the upside, there is a key resistance near the $11,000 level.If there is an upside break above the $11,00 level, there are chances of more gains. If there is a successful close above the $11,000 resistance, the next stop for the bulls could be near the $11,200 level. Overall, any further upsides will most likely push the price towards the $11,500 and $11,650 levels.Looking at the chart, bitcoin price is showing a lot of positive signs above the $10,200 support and the 100 SMA. Therefore, as long as the price is above the $10,200 pivot level, the price is likely to continue higher and the bulls might aim $11.2K or $11.5K.Technical indicators4 hours MACD – The MACD for BTC/USD is slowly moving back in the bearish zone.4 hours RSI (Relative Strength Index) – The RSI for BTC/USD is currently correcting lower towards the 50 level.Major Support Level – $10,500Major Resistance Level – $11,000
Archives for August 3, 2019
Halving events for cryptocurrencies are commonly referred to as catalysts that typically spark bull movements due to the fundamental strength they contribute to individual cryptocurrencies. Litecoin (LTC) is currently under two days away from its halving event, which has been widely viewed as a bullish event.Despite this, analysts are noting that Litecoin investors may be gravely disappointed by the crypto’s price action in the coming days and weeks, as it has previously faced significant selling pressure following its halving event.Litecoin Drops as Halving Hype FadesAt the time of writing, Litecoin is trading down just under 1% at its current price of $95.20 and is down slightly from daily highs of over $97.While zooming out and looking at Litecoin’s price action over a longer time frame, it is clear that the cryptocurrency is not being bolstered by the imminent halving, as it is currently down from its late-June highs of over $140.Josh Rager, a popular crypto analyst, recently explained that he believes Litecoin’s price action looks significantly less bullish than other cryptocurrencies, including Chainlink.“Comparing $LTC and $LINK for someone & thought I’d share. There are huge fans of both but right now $LINK is clearly the asset to be in even with the LTC halving upon us. LTC has been in a clear downtrend & unable to hold its own again BTC while LINK has responded well at support,” he noted.Comparing $LTC and $LINK for someone & thought I’d shareThere are huge fans of both but right now $LINK is clearly the asset to be in even with the LTC halving upon usLTC has been in a clear downtrend & unable to hold its own again BTC while LINK has responded well at support pic.twitter.com/glv4nol8ZM— Josh Rager 📈 (@Josh_Rager) August 3, 2019Halving May Result in Multi-Month LTC Downtrend Another possibility that could scare LTC investors who are banking on a post-halving price surge is that it will actually result in a medium-term downtrend.Tadleer, another popular crypto analyst on Twitter, mused this possibility in a tweet, pointing to a chart that shows that during the last halving, Litecoin surged before the event before facing a post-event sell-off.“$ltc halvening is coming up, will history repeat itself?” He explained while referencing the below chart.$ltc halvening is coming up, will history repeat itself? #litecoin #Crypto pic.twitter.com/JYUxmsgVca— tadleer (@tadleer) August 1, 2019As the halving draws closer, it is highly probable that analysts and investors alike will soon discover whether or not the event will truly be a bullish catalyst, or if the hype will fade and leave a trail of bag holders in its wake.Featured image from Shutterstock.
Another week, another of Crypto Tidbits. Over the past seven days, Bitcoin actually managed to regain some of its bullish steam. As of the time of writing this, the cryptocurrency is trading at $10,500, just $200 of the weekly high established on Friday.While BTC is still around 30% short from its year-to-date high of $14,000, there have been many analysts pointing out that this recovery has triggered a number of technical signals that indicate further Bitcoin price appreciation.This week was also great for industry news. There were setbacks, like the debacle LedgerX found itself in. But the past seven days have been days of growth for most in the cryptocurrency ecosystem.Even on the coverage side, Bitcoin’s prospects were bullish. Former Trump advisor Steve Bannon claimed that cryptocurrencies have a bright future; a U.S. Senator opined that he believes that digital assets and related technologies are inevitable, echoing the thoughts put forth by Congressman Patrick McHenry.Related Reading; Crypto Tidbits: Bakkt’s Bitcoin Futures, Monex & Libra, Andrew Yang PAC Accepts BTCBitcoin & Crypto TidbitsKraken Acquires Institutional-Centric Crypto Firm in Major Transaction: Announced on Wednesday, top Bitcoin exchange Kraken has made a large acquisition, picking up Interchange. Interchange is an accounting and reporting service for institutions with operations in the cryptocurrency market, meaning that this purchase is one of Kraken’s latest attempts to make a splash in the institutional side of the industry. This transaction will allow for the San Francisco-headquartered platform’s institutional clients to better manage their portfolios, by offering accounting, reconciliation, and reporting products. This is Kraken’s latest acquisition in a matter of months. Earlier this year, the firm picked up Europe-centric cryptocurrency futures platform Crypto Facilities for a “nine-figure” sum. Later, it brought on Cryptofinance.ai, a data analytics firm.
Bitcoin has been able to extend the upwards momentum it has incurred over the past several days and is now nearing the key resistance level of $11,000, which was the price at which BTC faced a swift rejection that sent the crypto reeling down to lows of $9,100.Now, some are theorizing that the United States’ latest set of tariffs on China may have sparked this BTC rally, as most “safe haven assets” are currently surging.Bitcoin Climbs Towards $11,000 as Bears and Bulls BattleAt the time of writing, Bitcoin is trading up nearly 2% at its current price of $10,770, which is up significantly from its daily lows of $10,400.This price surge today marks an extension of the upwards momentum that Bitcoin first incurred last weekend when its price sharply dipped to $9,100 before quickly recovering and starting an uptrend that has sent the crypto back to its current price levels.Importantly, a couple of weeks ago BTC sharply rose to highs of $11,000 before facing a significant sell-off that sparked a week-long downtrend. It remains unclear as to whether or not this price level will once again have insurmountable selling pressure.Josh Rager, a popular cryptocurrency analyst, spoke about Bitcoin’s near-term resistance in a recent tweet, explaining that $10,800 is a short-term resistance level.“$BTC Weekly Chart: Currently, Bitcoin price is testing the resistance level $10,833: Price must not only break but want to see the price above on the weekly close in less than 48 hours. Support needs to hold above previous resistance at $10,590. Close above $10,833 is bullish,” he said.$BTC Weekly ChartCurrently, Bitcoin price is testing the resistance level $10,833Price must not only break but want to see the price above on the weekly close in less than 48 hoursSupport needs to hold above previous resistance at $10,590Close above $10,833 is bullish pic.twitter.com/sRmtp02LaA— Josh Rager 📈 (@Josh_Rager) August 3, 2019Did U.S. Tariffs Spark the Recent Rally?This past week it was announced that the US will be placing additional tariffs on Chinese imports, which instantly led to a sell off in the global equity markets.Importantly, many safe haven assets have surged in the time since these tariffs were announced, which may strengthen the Bitcoin “Gold 2.0” narrative.“$BTC has rallied together with multiple safe-haven assets after Trump’s latest tariff storm. Will the trade war continue to be a catalyst for #Bitcoin’s price growth?” Binance Research explained in a recent tweet while referencing the below graph.$BTC has rallied 📈 together with multiple safe-haven assets after Trump’s latest tariff storm.Will the trade war continue to be a catalyst for #Bitcoin‘s price growth? 🤔 pic.twitter.com/Ghf0eqvazF— Binance Research (@BinanceResearch) August 2, 2019As the global economy continues to face instability, it is likely that analysts will gain better insight into whether or not this instability will prove to be a positive thing for BTC.Featured image from Shutterstock.
Bitcoin (BTC) has managed to claw back some of its losses made in July. After trading below $10,000 for over a week, the cryptocurrency broke out, reclaiming the auspicious five-figure price point as outlined in this NewsBTC report.Since then, the ball has been in the court of bulls, so to speak. As of the time of writing this, Bitcoin is trading at $10,500, having rallied by around 10% in the past week.While BTC has yet to close above the key resistance levels of $10,600 and $11,000, the market could be ready to continue higher.Related Reading: Largest UK Newspaper Raises Dwindling Bitcoin Supply to Millions of ReadersBitcoin to See 60% Rally? As spotted by prominent analyst Joe McCann, the one-day Bitcoin chart recently printed a strong signal. The Moving Average Convergence Divergence (MACD), an indicator that tracks trends, recently saw a bullish crossover, printing a green candle on the histogram.There’s only one chart and one meme you need for #bitcoin today.This one. pic.twitter.com/yVfvTlIqfD— Joe McCann (@joemccann) August 2, 2019As McCann points out in the chart above, the last two times that Bitcoin has seen this signal in this cycle was preceding two three-weeks surges to the upside of 52% and 61%.Should history repeat itself, BTC could surge to around $17,000 by the end of August, riding on the back of bullish momentum.What’s interesting is that this strong performance may set the stage for the rest of the year’s price action. Per previous reports from this outlet, cryptocurrency investor Timothy Peterson wrote that “historically, BTC returns in August have set the tone for the rest of the year.”Related Reading: Former Trump Advisor Steve Bannon Boasts of “Big Future” for Bitcoin and CryptoTechnical Signs Predict Long-Term RallyThis hint that another short-term rally to the upside comes hot on the heels of reports stating that Bitcoin is now entering a potentially multi-year bull run.On Bitstamp’s three-day BTC-to-USD chart, a “golden cross” just occurred. For those not versed in technical analysis, a so-called golden cross is when a short-term moving average moves above a long-term one, implying that bulls are in control of the price of a given asset.The one that Bitcoin’s three-day chart recently saw was the cross of the 50 moving average above the 200 moving average. What’s notable about this is the last time this technical event played out was early-2016, February 2016.What came after that is historic. This being the rally from $500 to $20,000 — a jaw-dropping 4,000% move — in under 24 months, of course. Should history repeat from here, Bitcoin could reach $400,000 by mid-2021.Fundamentals Strong for BitcoinNot only are technicals strong, but so are fundamentals and news events. For instance, there is growing macroeconomic and geopolitical risk due to central bankers inflating the money supply, disputes between world powers, Brexit, and more. While Bitcoin is still viewed by most to be a “risk-on asset”, many analysts, including mainstream economists and investors, are starting to come to the conclusion that BTC is proving itself as a digital safe haven.Also, there has been a dramatic increase in institutions involved in the industry, boding well for the future of cryptocurrencies.Featured Image from Shutterstock
Shinhan Financial Investment will soon be offering peer-to-peer (P2P) stock lending via the blockchain.
When the new service is introduced this year, individuals will be able to borrow and lend securities with other individuals directly, rather than going through an intermediary. The Economic News and other local Korean media reported the news.
Securities lending and borrowing transactions are normally inefficient and expensive for anyone but larger investors. Commissions can be high and accurate information difficult to obtain. With a P2P service, individual owners of stock should be able to easily and cheaply lend their shares directly to others, earning a fee in the process. Individual short sellers will potentially be able to borrow stock from willing counterparties without having to pay exorbitant fees to large institutions.
Shinhan Financial Investment, which is a brokerage related to the country’s second largest banking group by assets, is developing the capability in cooperation with Directional, a Korean company that has been permitted by the Financial Service Commission (FSC) to provide stock lending and borrowing as part of the government’s sandbox initiative. Sandboxes, which are being aggressively pushed by the current administration, allow for a temporary lifting of regulations for the testing of innovative technologies and services.
Shinhan Bank has been aggressive in its pursuit of blockchain solutions. Two years ago, it started using the technology for the verification of gold bars. Since then, it has utilized it for interest rate swaps and and cross border remittances. In May this year, it was reported that the bank would use the technology for loan verification, enabling customers to electronically submit documents that previously had to be presented on paper, and often in person, and authenticated manually.
Like most commercial banks in Korea, Shinhan has been more enthusiastic about blockchain than pure crypto, tracking the official government stance but running counter to customer appetite for coins.
The bank was for a while more positive on crypto and accepted deposits from cryptoexchanges and exchange customers rejected by other banks. But in light of increased scrutiny by the authorities from 2018, and in light of new FATF standards, the bank has upped its surveillance of crypto-connected accounts and is instituting systems and procedures to enforce real-name account requirements and adhere to Know-Your-Customer best practices.
Like other banks, it is currently renegotiating its cryptoexchange deposit agreements. While an extension of its contract with Korbit, the local exchange it serves, is expected, nothing is guaranteed given concerns about possible fraud.
Image via Shutterstock.
Crypto markets are climbing as we start the weekend and once again Bitcoin is leading the charge. BTC has held on to gains in five figures and continues to eat into altcoin markets as dominance approaches 70 percent.Bitcoin Closes on $11kBTC has seen its fourth green candle in as many days as the asset continues to climb, making progress above the psychological $10k barrier. A few hours ago during Asian trading Bitcoin rose from a low of $10,300 to tap an intraday high of $10,860 marking a 5.4 percent gain on the day. The movement has taken BTC back to its highest level for two weeks.The momentum has left most of the altcoins in the digital dust once again as Bitcoin dominance knocks on the door of 70 percent. This equals the mid-July high and puts market share back at December 2017 levels. Hash rate also hit another all-time high a few days ago as Bitcoin goes from strength to strength.BTC market dominance – Tradingview.comAnalysts are now eyeing the next resistance levels which are around $11,200 with further upside breaks possibly reaching $11,500. On the downside, support lies at $10,400 and $10,000.Missing Out on Four FiguresSince sentiment has turned bullish once again, many are wondering if they have missed out on four figure Bitcoin. The past couple of weeks have been bearish and a return to new lows is still a possibility. Trader and analyst Josh Rager pointed this out earlier.“30%+ pullback was a common theme last uptrend & great opportunity to buy at confirmed support.
Everyone still wants $8k… & could happen.
But ignoring to buy a 35% pullback on the best performing asset over the past ten years b/c it “may” hit 10% lower”$BTC30%+ pullback was a common theme last uptrend & great opportunity to buy at confirmed supportEveryone still wants $8k… & could happenBut ignoring to buy a 35% pullback on the best performing asset over the past ten years b/c it “may” hit 10% lowerGood luck 😉 pic.twitter.com/kSakBl2jnW— Josh Rager 📈 (@Josh_Rager) August 2, 2019Binance boss Changpeng Zhao echoed the sentiment when he quipped “Slap yourself, if you sold $BTC under $10,000.”Elsewhere on Crypto MarketsBitcoin’s dominance surge has left altcoin markets battered and bruised as most of them are in decline this morning. Ethereum has made a little gain and is back above $220 but there is very little going on in this camp to inspire confidence at the moment.XRP has retreated again and is back at a lowly $0.315 and Litecoin has lost fourth place as LTC dumps to $95. Halving is only two days away but there is no sign of any last minute rush to buy Litecoins. As a result Bitcoin Cash has retaken fourth with a 2 percent gain to $336.Monero is one of two only other major cryptocurrencies making a gain as XMR adds 5 percent. Chainlink it’s the other with a huge fomo pump of 23 percent on the day.Image from Shutterstock
Noelle Acheson is a veteran of company analysis and a member of CoinDesk’s product team. The opinions expressed in this article are the author’s own.
The following article originally appeared in Institutional Crypto by CoinDesk, a free newsletter for institutional investors interested in crypto assets. Sign up here.
Celebrating the 75th anniversary of the Bretton Woods conference is probably not high on the list of priorities for cryptocurrency enthusiasts this month. This is an understandable oversight – the price swings, confusing product launches and whereabouts of Justin Sun are perhaps more compelling.
But the birth of international economic cooperation and interoperability should be recognized as the beginning of a process of economic reconstruction that has contributed to the global imbalances worrying the markets today. It could also have set the scene for the solution.
The bulk of the U.S. stock market may be overvalued, and yields look set to go even lower – but a large part of the current strain lurks under the surface of the currency market. A combination of monetary easing, trade tensions and the threat of military action in the Middle East is a noxious cocktail for currency holders and hedgers as international conversions get risky and costly.
Perhaps because of this, as well as the disquieting brandishing of financial muscle by the U.S. administration, the chorus of questions about the role of the U.S. dollar as a global reserve currency is getting louder.
What’s more, it has held its leadership role for almost 100 years; the average global reserve currency lifespan over the past five centuries is 95 years. Shifting balances are hinting that the dollar’s reign may soon be up: its share of foreign exchange reserves is over 60%, while the weight of the U.S. economy in global output has fallen to less than 25 percent and is likely to continue trending lower.
Encroaching currency competition could well gather momentum as politics starts to trump economics.
Some have posited that there is a “non-zero chance” that bitcoin would make a great reserve currency. I disagree, I believe that there is exactly zero chance that could happen. I do think, however, that the global reserve system will radically change over the next couple of decades. Bitcoin could be a part of what emerges.
First, some background on the significance of Bretton Woods and why we should be paying attention.
In 1944, an agreement was drawn up between delegates from 44 nations that established the U.S. dollar as the world’s reserve currency, which would be pegged to gold. The other member nations would peg their currencies to the U.S. dollar, and the resulting relative stability between denominations would smooth world trade and boost the post-war recovery.
The agreement also created the institutions of the International Monetary Fund (IMF) and the World Bank to coordinate global currency movements and channel loans to developing nations.
The U.S. dollar stopped “officially” being the global reserve currency when President Richard Nixon took the country off the gold standard in 1971. It remained the de-facto global reserve currency, however, by dint of being the world’s largest economy and trading nation. Countries tended to hold more dollar reserves than all other foreign currencies combined, for the ease of transacting and for their relative stability.
Being the global reserve currency is a mixed blessing. While it makes it easy to borrow in international markets, it takes away power to influence the domestic economy.
If foreign debt holders start to believe that President Trump might encourage a devaluation of the U.S. dollar (as he has often hinted he wants to do), they would start to unload, as a devaluation would make their bonds worth less. Foreign holdings of U.S. debt currently amount to over $6 trillion, almost 30% of the outstanding total, so even a small unloading would be a shock to the market and would weaken the dollar’s credibility for some time to come.
As well as not being able to devalue when convenient, the additional global demand for U.S. dollars stemming from its reserve currency status is keeping the dollar’s value high relative to other currencies, exacerbating the current account deficit, now the largest in the world. And, whatever your views on Modern Monetary Theory (which posits, among other things, that debt levels don’t matter), the vulnerability of the U.S. markets to foreign investment strategies is disquieting.
So much for “America First.”
A new reserve currency?
Given the growing doubts over the need for and advisability of a fiat-based, single-issuer global reserve currency, you can see why the bitcoin narrative would pop up. Surely a sovereign-free, algorithm-based alternative would be more stable and trustworthy?
Perhaps, but it won’t be bitcoin*.
First, a global currency needs to have a flexible supply. The limits on the amount of gold banks could hold was one of the main reasons the gold standard didn’t work – economic growth outstripped the supply of gold-backed money, and the inevitable scramble to overcome this limitation led to destabilization.
Second, bitcoin will not become a universal settlement token for trading contracts. It’s too volatile. While this should soften in line with greater liquidity, it’s unlikely that businesses and sovereign powers will give up their preference for fiat, which they have some control over.
So, if not bitcoin, then what? What could an international trading currency that embodies both trustworthiness and flexibility look like?
One such model is Facebook’s Libra: a basket of currencies and government debt that is periodically rebalanced and used to peg a digital token that can be used for settlement.
But the whirlwind of debate around the coin’s purpose and backing has highlighted the strong distrust of corporate motives with global ambitions, and the simmering anti-trust scrutiny will make it difficult for any large enterprise to create a universal solution.
Another such model, much more likely, is a revamped Special Drawing Right (SDR). This basket of currencies was created by the IMF in 1969 to act as a private transaction token and a “store of value” for members. Its value moves in line with that of the underlying currencies: the U.S. dollar, Japanese yen, euro, British pound and Chinese renminbi.
Several economists have proposed the expansion of the SDR’s scope for purposes of international trade, positioning it as a global reserve currency that does not depend on any one issuer and can be managed by a neutral, supra-national organization with economic stability as its main objective.
The problem is, even a liquid SDR in its current configuration would be subject to national priorities and vulnerabilities. A sharp depreciation in the U.S. dollar as central banks switch to the SDR as a reserve holding could destabilize the basket. The euro is almost as significant as a global payment currency but carries an existential risk, however remote. The Chinese renminbi is still largely controlled by its government, and the British pound’s future is uncertain.
If only the SDR in its new liquid form could be pegged to a non-sovereign token of exchange that is totally free from political manipulation. You see where I’m going with this?
Other currencies would also form part of the basket, to reflect economic activity and allow flexibility in the supply. But a robust apolitical anchor could add a layer of trust, difficult to come by in an increasingly fractious trade environment.
Time to talk
How this mechanism would work, I don’t know – it would no doubt be complex and fraught with controversy, and anyone who studies currencies is aware of the colossal complications of maintaining a peg. But the building conviction that the current system is flawed and the increasingly apparent politicization of currencies will eventually shift the conversation from “it’s too difficult to attempt” to “let’s start talking about this.”
The biggest risk to the world economy right now is not trade tensions, overvalued assets or negative yields. It’s complacency in assuming that the status quo will hold. Profound change always costs a massive amount of political and economic capital, but it happens regardless.
None of us can be sure what the next step of financial evolution will look like – but we’ll soon find out. As economist Tyler Cowen reminds us in a recent article: “Every era’s monetary institutions are virtually unimaginable until they are created.”
Unfortunately, even getting the main participants to the table to discuss this will be a mammoth task. The Bretton Woods’ anniversary celebrations have given voice to papers and panels questioning the current reserve system, the role of the IMF and how to weather the economic storms ahead. Ideas and discussions are a start. But we shouldn’t forget that in 1944, just after the bloodiest war in history, what brought the participants to the table in a collaborative frame of mind was fear.
We can all fervently hope that it doesn’t take that level of fear to get everyone to the table again. What is different this time around is that the need for a reform is becoming startlingly apparent. The discussions are involving a much broader set of participants. And bitcoin is adding a new tool to the box of potential solutions.
On its own, it won’t solve the most pressing issues. But combined with other tools, and aided by diplomacy, academic rigor and patience, it could well form an integral part of a new type of reserve currency, which could help smooth or even avoid the shocks to come.
(*Disclosure: I hold a modest amount of bitcoin with no short positions.)
Bitcoin image via Shutterstock