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China Expands Digital Yuan Trials to Beijing and Neighboring Provinces

China’s Commerce Ministry announced today that it will expand the trials of the nation’s central bank digital currency (CBDC) to include Beijing, as well as Tianjin and Hebei provinces.

According to an Aug. 14 report by the Wall Street Journal, there is not yet a set time when the expanded pilot program of the Chinese CBDC will begin. Still, the nation’s Ministry of Commerce announced that the policy framework should be complete by the end of 2020.

As Cointelegraph reported earlier this week, the expanded pilot will also include the Hong Kong Greater Bay area — consisting of nine cities including Guangzhou, Shenzhen, as well as Hong Kong, and Macau.

A Chinese Ministry of Commerce representative said today that the trials will cover much of China’s wealthiest regions. Poorer central and western regions that meet unspecified criteria will also join testing. The People’s Bank of China will lead the pilot.

China’s CBDC is known domestically as a digital currency electronic payment (DCEP) and is by many expected to be the first operational national digital currency. In mid-April, the People’s Bank of China tested DCEP as part of a transport subsidies scheme for government and enterprise workers in Suzhou — a major city in Jiangsu Province.

Earlier this month, Chinese state-run banks were also reported to be testing a digital wallet designed for DCEP on a large scale.

US DoJ Seizes Millions in Crypto Funds From Al-Qaeda and ISIS Networks

Per an Aug. 13 announcement from the United States Department of Justice, the authorities have seized millions of dollars worth of cryptocurrency from over 300 accounts. 

The announcement does not specify the specific amount, but does identify the operation as the largest to target terrorist funding in cryptocurrency.

A wide range of agencies including the Department of Homeland Security, the FBI, and the IRS were involved in the campaign. The campaign shut down several websites and Facebook pages that either overtly or, in the case of one fraudulent site selling medical masks, covertly gathered funds for terrorist operations.

According to chief of criminal investigation Don Fort, the IRS used its new crypto tracking capabilities to locate the funds involved: 

“IRS-CI’s ability to trace funds used by terrorist groups to their source and dismantle these radical group’s communication and financial networks directly prevents them from wreaking havoc throughout the world.” 

It was just over a month ago that the IRS was asking for new tools to monitor privacy coin transactions. 

Given that at least one of the images in the DoJ that featured a Bitcoin address belonging to an ISIS affiliate has been floating around government channels for over a year, these are clearly long-term capabilities that the agencies involved have worked to build out.

Ireland Will Transpose Latest EU Anti-Money Laundering Rules Into National Law

Cryptocurrency firms in Ireland will soon be regulated in line with the latest European legal framework for the prevention of money laundering and terrorism financing.

On Aug. 10, the Cabinet of Ireland approved a bill to transpose the criminal justice elements of the European Union’s Fifth Anti-Money Laundering Directive (AMLD5) into national law, thereby strengthening existing legislation. 

Approval from the Cabinet gives Ireland’s Minister for Justice and Equality, Helen McEntee, the go-ahead to publish the new bill, entitled The Money Laundering and Terrorist Financing (Amendment) (EU Exit) Regulations 2020. 

Among other provisions, the bill brings virtual currency providers and online wallet providers for digital currencies under existing AML and counter terrorist financing legislation. An official government note accompanying news of the bill’s publication stated:

“The Minister for Finance has also secured Government Approval to bring forward amendments in respect of the regulation of Virtual Asset Service Providers (VASPs) […] the amendments will ensure that the necessary registration and fitness and probity regime, required by 5AMLD for virtual asset service providers, become statutory requirements.”

Furthermore, the note indicates that these amendments will also address Ireland’s international obligations, in line with the Financial Action Task Force’s regulatory framework for new technologies, products and practices.

In July, the European Court of Justice had fined Ireland 2 million euros ($2.3 million) for its delay in bringing the country’s AML and CFT rules into line with the rest of the bloc. 

AMLD5 first came into force on July 9, 2018, and  gave member states until January 2020 to incorporate the directive into their respective national laws by January  20, 2020.

Announcing the bill this week, Minister McEntee said it was an important step for fighting money-laundering: 

“The reality is that money laundering is a crime that helps serious criminals and terrorists to function, destroying lives in the process. Criminals seek to exploit the EU’s open borders, and EU-wide measures are vital for that reason.”

Price Analysis 8/12: BTC, ETH, XRP, LINK, BCH, BSV, LTC, ADA, XTZ, BNB

On August 11 MicroStrategy, the world’s largest publicly traded business intelligence company, announced that it had ditched fiat currency and built its primary treasury reserve with Bitcoin (BTC). 

The company’s CEO Michael J. Saylor believes that the coronavirus pandemic and the stimulus measures enacted to counter it will cause “a significant depreciating effect on the long-term real value of fiat currencies and many other conventional asset types.” 

Saylor further explained that Bitcoin “is a dependable store of value and an attractive investment asset with more long-term appreciation potential than holding cash.”

Daily cryptocurrency market performance

Daily cryptocurrency market performance. Source: Coin360

On similar lines, BitGo CEO Mike Belshe also warned that the aggressive money printing will devalue fiat currencies and make them worthless to holders. Belshe urged investors to invest at least 3% of their portfolio in Bitcoin because it is “the lowest risk, highest asymmetric upside investment” many will see in their lifetime.

BTC/USD

The bulls again failed to propel Bitcoin above the overhead resistance of $12,113.50 on Aug. 10, and this resulted in profit booking by short-term traders. The correction pulled the price down to the 20-day exponential moving average ($11,127) but the bears could not break this support.

BTC/USD daily chart

BTC/USD daily chart. Source: TradingView

This shows that the bulls are aggressively buying the dips to the 20-day EMA support. In an uptrend, when the price bounces off the 20-day EMA, it usually increases the possibility that the uptrend will resume.

If the BTC/USD pair closes (UTC time) above $12,113.50, the momentum is likely to pick up and a quick move to $13,000 is possible. The bears are likely to defend this level, which can result in a minor consolidation or correction, but if the bulls do not give up much ground, the uptrend is likely to extend to $14,000.

This bullish view will be invalidated if the bears sink the pair below the critical support zone of $10,400–$10,000.

ETH/USD

Ether (ETH) remains positive as the price has held above the critical support at $366 for the past few days. This shows that the bulls are accumulating on dips to this level.

ETH/USD daily chart

ETH/USD daily chart. Source: TradingView

The moving averages are rising and the relative strength index is in the positive zone, which shows that the bulls are in command. 

A break above the downtrend line will signal strength and the momentum is likely to pick up above $415.634. Above this level, the uptrend can reach $480.

This bullish view will be invalidated if the ETH/USD pair reverses direction from the downtrend line and plummets below the 20-day EMA ($357). Below this support, the correction can extend to the  61.8% Fibonacci retracement level of $304.367.

XRP/USD

The bulls had pushed the price above the falling wedge on Aug. 11 but they could not sustain the higher levels. The bears used this to their advantage and sold aggressively, dragging XRP below the wedge.

XRP/USD daily chart

XRP/USD daily chart. Source: TradingView

However, the bulls purchased the dip to the 20-day EMA ($0.27) and are currently attempting to push the price back above $0.284584. If they succeed, it will be a positive sign.

Both moving averages are sloping up and the RSI is in the positive territory, which suggests that the path of least resistance is to the upside. A break above the wedge and the $0.307301 resistance will signal strength and increase the possibility of a rally to $0.326113. 

This bullish view will be invalidated if the XRP/USD pair turns down from the resistance and breaks below the 20-day EMA. 

LINK/USD

Chainlink (LINK) remains in a strong uptrend as the correction from the $14.4586 level only lasted for two days on Aug. 10 and 11. During this, the bears could not even break below the immediate support of $12, which shows that the bulls are aggressively buying the dips.

LINK/USD daily chart

LINK/USD daily chart. Source: TradingView

The sharp bounce off the $12 levels has already pushed the LINK/USD pair above the $14.4586–$14.8537 resistance zone. The next target is the 261.8% Fibonacci extension level of $17.4319 and if this level is also scaled, then the next level to watch out for is $20.

However, as the pair hits new highs, the RSI has again risen into deeply overbought levels. Although the RSI can remain overbought for an extended period of time, vertical rallies rarely sustain. Therefore, traders can consider trailing the stops on their positions instead of becoming greedy.

BCH/USD

Bitcoin Cash (BCH) broke below the 20-day EMA ($284) and the $280 support on Aug. 11, but a minor positive is that the bulls managed to close (UTC time) the day at $281.87. 

BCH/USD daily chart

BCH/USD daily chart. Source: TradingView

Today, the bears again attempted to resume the down move by plunging the BCH/USD pair below $270. However, the bulls bought the dip and have pushed the price back above $280, which is a minor positive.

The 20-day EMA has flattened out and the RSI is just above the midpoint, which suggests a balance between supply and demand. A break above the downtrend line will be the first sign that the advantage might be shifting in favor of the bulls.

This view will be invalidated if the pair breaks and closes (UTC time) below $280. Such a move could drag the price to $260.

BSV/USD

The failure to push the price higher attracted profit-booking by the traders on Aug. 11, which resulted in a break below the 20-day EMA ($214). The bulls are currently attempting to keep Bitcoin SV (BSV) above the $200 support. 

BSV/USD daily chart

BSV/USD daily chart. Source: TradingView

Any bounce from the $200 level will face resistance at the downtrend line and again at $227. If the BSV/USD pair turns down from this resistance, a few days of consolidation between $200–$227 is possible. 

The 20-day EMA is flat and the RSI is just below the 50 level, which points towards a possible range-bound action in the near term.

However, if the pair turns down from either resistance and breaks below $200, it will be a huge negative and could result in a drop to $160.

LTC/USD

Litecoin (LTC) broke below the $56–$60 range and the 20-day EMA ($54.70) on Aug. 11, which resulted in a retest of the breakout level of $51. The altcoin has bounced off this support, which is a positive sign as it shows that the bulls are attempting to defend this level.

LTC/USD daily chart

LTC/USD daily chart. Source: TradingView

The 20-day EMA has flattened out and the RSI is close to the midpoint, which suggests a range-bound action for a few days.

On the upside, a break and close (UTC time) above the descending channel will be the first sign of strength. This will increase the possibility of a rally to $60 and then to $65.1573. The uptrend is likely to resume if the LTC/USD pair sustains above $65.1573.

The trend will turn in favor of the bears if the pair turns down from the current levels and breaks below $51.

ADA/USD

Cardano (ADA) broke below the 20-day EMA ($0.137) on Aug. 11 and the bears capitalized on this opportunity by pushing the price below the $0.13 support today. 

ADA/USD daily chart

ADA/USD daily chart. Source: TradingView

However, the bulls aggressively purchased the dip to the 50-day simple moving average ($0.121) and pushed the ADA/USD pair back above the $0.13 level. This is a positive sign as it suggests a rejection of the breakdown below $0.13.

The flattening 20-day EMA and the RSI close to the 50 level point to a possible consolidation in the next few days.

The trend will turn positive on a breakout and close (UTC time) above the overhead resistance of $0.1543051. Conversely, a break below the 50-day SMA will signal a possible change in trend.

XTZ/USD

Tezos (XTZ) broke above the stiff overhead resistance at $3.96 on Aug. 10 and made a new high, which is always a sign of strength as it shows that the bulls are keen to buy at higher levels. 

XTZ/USD daily chart

XTZ/USD daily chart. Source: TradingView

The bears attempted to fake this breakout on Aug. 11 when they tried to sink the price back below the breakout level of $3.96. However, the bulls again purchased the dips aggressively, which helped the price recover from the intraday low of $3.75 and close (UTC time) at $4.01.

Today, the bears again attempted to sink the XTZ/USD pair but the bulls used the opportunity to buy at lower levels. The aggressive buying has already propelled the pair to new highs.

If the bulls can close (UTC time) the price above $4.50, the next level to watch for is the 200% Fibonacci extension level of $4.8766 and then 261.8% extension level of $5.57. This bullish view will be invalidated if the pair reverses direction and plunges below $3.60.

BNB/USD

The $21.7628–$22.93 range resolved to the downside on Aug. 11 as Binance Coin (BNB) plunged to $20.66, but the positive thing is that the bears have not been able to sustain the price below the 20-day EMA ($21.16).

BNB/USD daily chart

BNB/USD daily chart. Source: TradingView

This shows that the sentiment is to buy the dips and the bulls are aggressively defending the 20-day EMA. 

If the bulls can push the price back above $21.7628 and sustain the higher levels, it will be a positive sign. That will suggest a rejection of the recent breakdown and could signal a resumption of the uptrend.

The 20-day EMA is flattening out and the RSI has dropped below the 60 level, which suggests that the momentum has weakened marginally but the advantage remains with the bulls. 

The bullish view will be invalidated if the BNB/USD pair turns down from the current levels and plummets below the trendline. Below this support, a drop to $18.20 is possible.

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.

How Not To Lose Everything During the Bull Run

With sentiment suggesting Bitcoin and the crypto markets are about to go on a bull run, seasoned old timers are warning about the lessons learned from previous rallies. 

With Bitcoin correcting 5% in the past day, the Crypto Fear & Greed Index is back to 75. A measure of sentiment that looks at the volatility, market volume and social media activity of digital currencies, a reading of 75 equates to “greed”, down slightly from 84 — or “extreme greed” — that was recorded on Aug. 10. But both readings suggest expectations are sky high of boom times ahead.

In a Twitter thread on Aug. 11, MyCryptoWallet and MyEtherWallet co-founder Taylor Monahan laid out some good old fashioned advice learned during the 2017 bull run. She pointed out the irrational exuberance of bull markets invariably attracts bad actors preying on the vulnerable.

Like moths to a flame

“They will make a lot of money and people will lose because the exuberance and FOMO and greed and hype are the most powerful things on earth,” she wrote. Monahan believes the time for accumulation has now passed and pushed for users to put 90-95% of their crypto assets into cold storage. She suggests that you don’t go chasing shiny new coins: 

“Pick a few long-term legit coins that you like. Be invested in them. Do research. Do not follow the shills […] You will win if you take profits consistently, not if you try to call top.”

Monahan also stressed restraint and pointed out that people who “take on huge debt to get crypto” will not win, but will “ lose their house, their kids’ savings. Do not be those losers.”

Like many experts, Monahan believes investors should risk just 5% of their net worth, and once it’s been lost, don’t try and recoup those losses.

“Have fun with it but once it’s gone, it’s gone. Don’t double down. Don’t take from your savings account or your cold storage.” 

Easy to say, hard to do

Crypto researcher Chris Burniske said in an Aug. 7 tweet it was “hard to be adequately prepared” for a bull run. He expects that enthusiasm from “crypto diehards” will be ten times what it was in 2017, implying there may be reckless buying and selling of assets in the face of wild predictions.

“Speculation cycles have accompanied promising new technologies for hundreds of years, said Burniske.

“While no one can quite control them, we can control how we react, present, educate, communicate and steward the space.”

And if you’re a fan of podcaster Anthony Pompliano, you will be familiar with his frequently reposted advice for what to do in a bull run. Some users believe the advice is a jinx, as every time he posts it the market appears to turn bearish.

Gathering information

Market manipulation is harder than it used to be, but certainly still happens in 2020. Cointelegraph reported in June that crypto whales have the ability to alter the price of certain digital assets using a variety of techniques.

And remember, sometimes those whales can be influencers paid with millions of tokens to shill coins. Even those who aren’t paid to promote a project are biased in favour of their own investments. Monahan’s advice is to “Trust no one.”

“Even good people are motivated by the coins they hold and the relationships they have. You may eventually see the edge but you will never know fullness. Make decisions based on multiple sources and your knowledge and your gut.”

Bitcoin Price Keeps Rejecting $12K — Here’s What Can Happen to BTC

The price of Bitcoin (BTC) rejected the $12,000 resistance level for the second time in the past 10 days. Traders are generally optimistic about the short-term trend of BTC, following its extended consolidation below a critical resistance level.

When an asset stays relatively stable near a major resistance area, it typically suggests a bullish continuation is likely. It shows that sellers do not have enough pressure to push BTC down to a pivotal price point. Many traders seemingly anticipate the price of Bitcoin to remain in the $10,500–$12,000 range. If BTC does not drop below a key support level at $10,500, technical analysts say that the bullish market structure will remain intact.

The confluence of a positive global macro backdrop and a robust market structure are just some of the encouraging sentiments around Bitcoin, but investors have also expressed concerns about some short-term roadblocks facing it.

A bullish continuation

The primary factor behind predictions for a bullish continuation of Bitcoin in the near term is its long-term market structure. Analysts say that the high time frame charts of BTC, like the monthly chart, indicate a clear breakout, with BTC escaping a prolonged price range that often leads to an extended rally, especially if the breakout occurs on a high time frame chart. Raoul Pal, CEO of Global Macro Investor, stated:

“Super early days for what is likely to be a very big move as institution finally follow what retail BTC investors have known all along — that this is the future and its wildly under priced.”

Since its peak in 2017 when it almost achieved the $20,000 mark, BTC has ranged within a multiyear price range, bottoming out at $3,150 in 2018 while seeing a local high of $14,000 in July 2019 and establishing a three-year range. But when the price of Bitcoin recently surpassed $11,500, it confirmed on the weekly and monthly charts that the dreaded range has been broken. Various market data could also supplement the uptrend of Bitcoin over the longer term.

Kyle Davis, co-founder of Three Arrows Capital, hinted that there is a small gap between $14,000 and $20,000 in the options market. Citing data from options exchange Deribit, Davis said, “$BTC air above $14k up to $20k,” which suggests that a breakout above $14,000 could fuel the next BTC rally.

Some Bitcoin traders also emphasized that the current market structure of Bitcoin is highly optimistic. Scott Melker, a cryptocurrency trader, said that the absorption of Bitcoin’s dips shows that the trend of BTC is bullish: “It’s dip buying season and that any chance to grab a higher low is welcome. This is a bullish chart, period.”

In the four-hour price chart of Bitcoin published by Melker, Bitcoin recorded four higher lows, or four local low points that are higher than previous lows. A higher low pattern in technical analysis is considered a positive formation because it demonstrates strength from buyers. Every dip in the past 10 days was bought by Bitcoin buyers.

The positive technical factors surrounding Bitcoin have been complemented by encouraging on-chain data points. According to on-chain market data provider IntoTheBlock, the number of Bitcoin “HODLers” has substantially increased:

“The HODLING trend for #Bitcoin continues. As can be seen in the graph below the number of $BTC hodlers has increased by almost 4 million within the last twelve months. As of August 9, a total of 20.47 million addresses were holding 11.51m BTC for over a year.”

Near-term roadblocks for BTC

In the short term, Bitcoin faces two obstacles: first, a historically relevant fractal, and second, a slight drop in liquidity. Both factors could impose selling pressure on Bitcoin in the near term, but compared to a few weeks ago, the overall sentiment around BTC remains positive.

Nik Yaremchuk, a cryptocurrency trader, said that historical fractals hint at a short-term pullback. He compared the current price action of Bitcoin to that seen in May. Three months ago, BTC also saw a similar trend where the price looked to break out and then recorded a correction: “We now have a fractal since May 2020, where we have been in range for a while, I do not think that we are here for long, but it seems to me that we will get another dip.”

The fractal coincides with a slight decline in the liquidity of Bitcoin. Market research firm Glassnode said that while the overall transaction rates of BTC are healthy, they declined slightly in the past week:

“Liquidity also saw a slight decrease, losing 3 points due to a drop in the transaction liquidity subcategory. This, in turn, was caused by the above-mentioned decrease in the number of on-chain transactions over the past week. However, overall transaction rates remain high relative to pre-bull market levels.”

Still, speaking to Cointelegraph, Denis Vinokourov, head of research at exchange and brokerage platform BeQuant, said that Bitcoin being rejected at $12,000 is not necessarily bad. The pattern of an upsurge followed by consolidation stabilizes the market and provides investors some breathing room:

“Price discovery and consolidation following a strong run up is an indication of a healthy two way market flow. Price rejection is not necessarily a bad development, as it gives market participants an opportunity to take stock of the situation and look to align the interest of both leveraged/speculative flow and those of long-term holders.”

Variables affecting the crypto market

In the upcoming weeks, there are several variables that could affect Bitcoin and other major cryptocurrencies. The most prominent factor that might impact Bitcoin is likely the upward run of altcoins.

In recent weeks, altcoins, especially in decentralized finance, have gained substantially against major cryptocurrencies. Band Protocol’s native BAND token and Chainlink’s LINK, for example, rose by 348% and 88%, respectively, from Aug. 1 to their monthly highs.

In the near term, whether profits from altcoins will flow into Bitcoin remains in question. Vinokourov noted that the willingness of the market to take on additional risk with altcoins demonstrates a positive market sentiment:

“Interestingly, year-to-date (YTD) the MVIS 100 small caps index is up 74.51% and large caps index is up 74.23%. Market’s willingness to take on more risk, as evidenced in capital flow into small cap assets is a net positive overall.”

The combination of a favorable high time market structure and positive on-chain data has lifted the sentiment around Bitcoin in the longer term. But in the short term, some predict a minor pullback, which would make the market less overheated.

DeFi Tokens BAND, LINK, Outpace Bitcoin Price by Gaining 100% in 10 Days

This week Bitcoin (BTC) price is making waves as the digital asset finally pushed above the $12K mark, but prior to this move, altcoins have been strongly outpeforming BTC for weeks. 

Two of the most notable performers are Band Protocol (BAND) and Chainlink (LINK) as both surged by 348% and 88% in the past ten days. Each functions as an oracle blockchain network that supplies data to Decentralized Finance (DeFi) applications.

Since the start of August, BAND price rose from $3.9 to as high as $17.78 and in the same period, LINK surged from $7.6 to $14.45 at its peak on Aug 10.

BAND and LINK performances side by side

BAND and LINK performances side by side. Source: TradeBlock

What’s behind the DeFi token pump?

The primary factor behind the strong rally is the explosive growth of the DeFi sector. 

DeFi applications allow users to carry out various financial activities like trading, loans, and also earning interest from crypto lending. 

In order for DeFi platforms to run seamlessly, they need to fetch market data from various websites and blockchain networks and this is where orcacles come into use. Oracles are required within smart contracts to obtain necessary data to run DeFi platforms. Hence, when the DeFi sector expands, the blockchain networks providing oracles benefit from it. 

A TradeBlock research paper explains:

“Oracles allow for off-chain data to be integrated with the smart contract parameters that exist on public blockchains. In the figure below, we compare price gains between ChainLink (LINK) and Band Protocol (BAND) over the past three months.”

Data from Defi Pulse shows that since June 1, the total value locked in DeFi apps surged from $1.048 billion to $4.76 billion. As more capital has entered the DeFi market, the demand for oracles also increased.

The main difference between Band Protocol and Chainlink is that the former is based on Cosmos, and the latter operates on top of the Ethereum network. Cosmos is a proof-of-stake (PoS) blockchain, while Ethereum is in the process of moving over to PoS through ETH 2.0.

BAND has seen substantially larger gains than Chainlink over the past several weeks due to a large gap in valuation. Currently, LINK is valued at over $4 billion, whereas, BAND is valued at $308 million despite its 348% gain.

Researchers at Messari explained that BAND followed a similar path as Chainlink, which spurred its growth. They said:

“BAND has recently taken a page straight out of the LINK handbook with a slew of partnership and integration announcements, including a Coinbase Pro listing. Up over 32x on the year, its relative valuation play and anchor to LINK has worked so far.”

The timeline of BAND’s rally

The timeline of BAND’s rally. Source: Messari

Will demand for oracles increase?

Kelvin Koh, co-founder of Asia-based venture capital firm Spartan Black said he expects BAND to continue its upward momentum. Over the next 12 months, Koh said he anticipates BAND to close the valuation gap. He said:

“Despite BAND’s significant re-rating YTD, it is worth noting that its circulating market cap is still only 5% of LINK’s while FD market cap is 10%. This is fair currently given BAND’s nascent stage but I expect the valuation gap will continue to close in the next 12 months as BAND scales.”

Since BAND and LINK are based on differing blockchain networks, they will also likely support separate DeFi ecosystems based on Ethereum and Cosmos.

Price Analysis 8/10: BTC, ETH, XRP, BCH, LINK, BSV, LTC, ADA, BNB, CRO

Traders prefer to trade a trending market as it generally moves in one direction and the retracements offer low-risk entry opportunities. This is because a trade that follows the major trend carries a greater possibility of earning profits than one in a volatile market. 

As several cryptocurrencies started a trending move in July, web traffic to the crypto exchanges also increased by 13%, according to data from ICO Analytics.

Daily cryptocurrency market performance

Daily cryptocurrency market performance. Source: Coin360

The derivatives market also comes alive when the underlying market is trending as professional traders use leverage to make quick profits using the futures and options route. This could be one of the reasons for the sustained increase in Ethereum (ETH) options open interest over the past three months.

Several reasons can be attributed to the start of a trending move in an asset class. Max Keiser believes that capital fleeing Asia is one of the main reasons for the sharp rally in Bitcoin (BTC). 

Let’s analyze the charts of the major cryptocurrencies to find out whether the uptrend is likely to resume or is it time for a correction to start.

BTC/USD

The bulls are attempting to push Bitcoin above the overhead resistance of $12,113.50, which is a positive sign. This suggests that the bulls are not booking profits yet, which is frustrating the traders who have been left out because they are forced to buy at higher levels.

BTC/USD daily chart

BTC/USD daily chart. Source: TradingView

Both moving averages are sloping up and the relative strength index is in the overbought zone, which suggests that bulls are in command.

A breakout and close (UTC time) above $12,113.50 is likely to resume the uptrend. There is a minor resistance at $12,304.37 but that is likely to be crossed. Above this level, the uptrend can reach $13,000 and above it $14,000.

Contrary to this assumption, if the bears aggressively defend the $12,113.50 level, the BTC/USD pair might correct to the 20-day exponential moving average ($11,052). A strong bounce off this level will increase the possibility of a break above the overhead resistance. 

However, if the bears sink the price below the 20-day EMA, it will signal weakness. Below this level a retest of the $10,400 level is possible. A drop below this support will signal that the bears are back in the game.

ETH/USD

Ether (ETH) has been trading above the breakout level of $366 for the past few days, which is a huge positive as it shows that the bulls are not hurrying to liquidate their positions. This suggests that the bulls expect the uptrend to continue.

ETH/USD daily chart

ETH/USD daily chart. Source: TradingView

Both moving averages are sloping up and the RSI is in the overbought zone, which indicates that the path of least resistance is to the upside. A breakout and close (UTC time) above $415.634 will signal a resumption of the uptrend towards the next target of $480.

However, if the bears defend the $415.634 resistance, the ETH/USD pair might spend some more time inside the range.

This bullish view will be invalidated if the bears sink the price below $366. Such a move will suggest a weakening momentum that can drag the price to the 20-day EMA ($351). A break below this support could signal a deeper correction to the 61.8% Fibonacci retracement level of $304.367.

XRP/USD

XRP is currently trading inside a falling wedge pattern, which usually acts as a bullish setup. If the bulls can push the price above the wedge, the uptrend is likely to resume with the first target at $0.346727 and then $0.432105.

XRP/USD daily chart

XRP/USD daily chart. Source: TradingView

The correction from $$0.326113 has been healthy as it has pulled down the RSI from deeply overbought levels. Both moving averages are sloping up, which suggests that the bulls have the upper hand.

This bullish view will be invalidated if the bears sink the price below the wedge and the 20-day EMA ($0.267). Such a move will be a negative sign that can drag the XRP/USD pair to the 61.8% Fibonacci retracement level of $0.244472.

BCH/USD

Bitcoin Cash (BCH) dipped to the 20-day EMA ($284) on Aug. 7 and again on Aug. 10, which suggests that the bears are attempting to sink the price back below the breakout level of $280.

BCH/USD daily chart

BCH/USD daily chart. Source: TradingView

If they succeed, it will be a huge negative as it will indicate a lack of demand at higher levels. Such a move could result in a fall to $260 and then to $245.

However, the 20-day EMA is gradually sloping up and the RSI has been sustaining above the 60 level, which suggests a slight advantage to the bulls.

If the bulls can push the price above the downtrend line, it will signal advantage to the bulls. Above this resistance, a rally to $353 is possible. A breakout of this level could resume the uptrend to $400.

LINK/USD

Chainlink (LINK) dipped on Aug. 7 to $9.05 but the bears could not sustain the lower levels. By close (UTC time), the price had recovered sharply from the intraday lows, which shows aggressive buying by the bulls.

LINK/USD daily chart

LINK/USD daily chart. Source: TradingView

This move seems to have caught the aggressive bears on the wrong side, and they were forced to cover their short positions as the price broke out to new highs, which resulted in a strong rally on Aug. 8 and 9. 

The LINK/USD pair rose to a high of $14.4586 on Aug. 9, which is just below the 200% Fibonacci extension level of $14.8537. The bears are likely to mount a stiff resistance in the $14.4586–$14.8537 zone and the RSI has also risen into the deep overbought zone, which suggests a minor consolidation or correction.

Contrary to this assumption, if the bulls continue to buy at higher levels and push the price above the resistance zone, a rally to 261.8% Fibonacci extension level of $17.4319 is possible. 

BSV/USD

The bulls are struggling to push Bitcoin SV (BSV) above the $240 resistance, which suggests a lack of demand at higher levels. However, on the downside, the bulls are buying the dips to $214.

BSV/USD daily chart

BSV/USD daily chart. Source: TradingView

The 20-day EMA ($216) is flattening out and the RSI is gradually falling, which suggests that the bulls are losing their grip. If the bears sink the price below the 20-day EMA and the $214 support zone, a drop to $200 is possible. 

On the other hand, if the BSV/USD pair rebounds off the 20-day EMA, the bulls will once again attempt to push the price above $240. If successful, a move to $260.86 is likely. 

LTC/USD

Litecoin (LTC) has roughly been trading between the $56–$60 level since Aug. 2. This suggests a balance between demand and supply. However, as both moving averages are rising and the RSI is in the positive zone, the advantage is with the bulls.

LTC/USD daily chart

LTC/USD daily chart. Source: TradingView

If the LTC/USD pair rises above $60, the advantage will shift in favor of the bulls. Above this level, a rally to $65.1573 is possible. This is the critical level to watch out for because, if the bulls can propel the price above this level, the momentum is likely to pick up.

Conversely, if the bears sink the pair below $56 and the 20-day EMA ($54.83), a drop to the critical support at $51 is possible. A break below this support will signal a possible change in trend but if the bulls buy the dip to this support, the pair might remain range-bound for a few more days. 

ADA/USD

Cardano (ADA) turned down from the $0.15–$0.1543051 resistance zone on Aug. 9, which shows that the bears are aggressively defending this zone. However, the upsloping moving averages suggest that the path of least resistance is to the upside.

ADA/USD daily chart

ADA/USD daily chart. Source: TradingView

If the ADA/USD pair rebounds off the 20-day EMA ($0.1379), the bulls will make one more attempt to scale the price above the zone. If they succeed, a rally to $0.173 and then to $0.20 is possible.

However, if the bears sink the price below the 20-day EMA, a drop to the $0.13 support is likely. A bounce off this support could keep the pair range-bound for a few more days. A break below $0.13 is likely to shift the advantage in favor of the bears with the next support at $0.12.

BNB/USD

Binance Coin (BNB) has been trading inside the tight range of $21.7628-$22.93 for the past three days, which shows uncertainty among the bulls and the bears about the next directional move. 

BNB/USD daily chart

BNB/USD daily chart. Source: TradingView

While the bulls are buying the dips to $21.7628, the bears are defending the overhead resistance at $22.93.

However, the moving averages are sloping up and the RSI remains in the positive zone, suggesting advantage to the bulls. If the bulls can push the price above $22.93, a move to $24.4588 and then to $27.1905 is possible.

Contrary to this assumption, if the bears sink the price below $21.7628, a drop to the 20-day EMA ($21) is likely. A break below this support will signal a possible change in trend.

CRO/USD

Crypto.com Coin (CRO) remains in an uptrend but it is facing resistance near the highs at $0.176596. Hence, it is likely to consolidate between $0.176596 and $0.154322 for a few days.

CRO/USD daily chart

CRO/USD daily chart. Source: TradingView

The RSI is showing signs of forming a bearish divergence, which indicates that the momentum is weakening. If the bears sink the price below the 20-day EMA ($0.159), it will indicate profit booking and a break below $0.154322 will shift the advantage in favor of the bears.

This assumption of a correction will be invalidated if the CRO/USD pair continues higher and breaks above $0.176596. Above this level, the next level to watch out for is $0.20.

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.

Canadian Weatherman Frankie MacDonald Is Bullish on Bitcoin

Frankie MacDonald, an amateur meteorologist based in Nova Scotia, has recently been using his platform to talk up Bitcoin in his charismatic voice.

In a series of tweets beginning Aug. 8, MacDonald posted videos stating his views on the cryptocurrency to his 118,500 followers. The Canadian weatherman said that Bitcoin (BTC) is “worth more than American dollars,” taking viewers through the numbers if they owned anywhere from 1 BTC — $12,007 as of press time — to 10 million BTC, or over $160 billion at the time.

New Bitcoin meme is born

The 36-year-old YouTuber began making videos on the platform in 2009, which focused on meteorology in Canada and the United States. MacDonald gained momentum online, standing out with his unique style of forecasts. 

After seeing a video of MacDonald shouting “Bitcoin” on Aug. 7, the crypto community has quickly picked up on the Canadian’s charisma and turned him into a new meme as the token surged past $12,000 on Aug. 10.

One of MacDonald’s mantras, featured in the title of his book and one of his songs, is “be prepared.” He has yet to associate the phrase with the volatility of cryptocurrency.

Influencers adopting Bitcoin?

A number of high-profile individuals not normally associated with cryptocurrency have been bullish on Bitcoin lately. 

After speaking with Anthony Pompliano on his July 1 podcast, comedian Bill Burr said he would be investing in Bitcoin for the first time. Podcaster and celebrity Joe Rogan has been using his platform to talk up the cryptocurrency to his more than 200 million listeners as part of his sponsorship with Cash App.

Even online personalities with more of a connection to the financial sector are speaking out. Cointelegraph reported on Aug. 4 that Dave Portnoy enlisted the help of Gemini co-founders Tyler and Cameron Winklevoss regarding Bitcoin. Portnoy told the twins he wanted them to “explain Bitcoin in a way that I would understand.”

Top 5 Cryptocurrencies to Watch This Week: BTC, ETH, XRP, XMR, XTZ

The U.S. markets have rallied sharply from their March lows, led by the tech sector and Fed injections designed to hold up the ailing economy. 

Markets across the globe have also joined the party as a steady economic recovery from the coronavirus pandemic picks up steam. 

The fast-paced rally in global stock markets has pushed the Buffett Indicator into the bubble territory, which suggests that the markets might be overheated in the short-term.

Similarly, gold has seen a sharp rally in 2020 and last week the asset reached a new lifetime high. Silver also followed suit and is trading near multi-year highs. 

This suggests that traders have been diversifying their portfolio into various assets to protect against the debasing of fiat currencies.

Crypto market data daily view

Crypto market data daily view. Source: Coin360

These circumstances are also favorable for Bitcoin (BTC), which has rallied sharply from its March lows. 

However, the biggest cryptocurrency is trading well below its all-time highs, which signals that if the bullish trend continues then there is plenty of potential upside. 

Therefore, even if stocks and gold correct, Bitcoin could behave as an uncorrelated asset during that period. 

BTC/USD

The average directional index (ADX), a component of the directional movement indicator, is above 41, which suggests that Bitcoin is in a strong trend. The positive directional indicator (+DI) is above the negative directional indicator (-DI), indicating advantage to the bulls.

BTC/USD daily chart

BTC/USD daily chart. Source: TradingView

The bulls purchased the dip on Aug. 2 but they are facing resistance close to the overhead zone of $12,113.50–$12,304.37. The BTC/USD pair has formed a pennant, which usually acts as a continuation pattern.

A breakout and close (UTC time) above the pennant will be the first sign that bulls have gained the upper hand. The target objective of such a breakout is $14,756. However, as the overhead resistance of $12,304.37 is close by, traders can wait for the price to sustain above this level before turning positive.

The bears are likely to pose a challenge at $13,000 but that level is likely to be crossed. However, at $14,000 a minor consolidation or a correction is possible.

Contrary to this assumption, if the price dips below the pennant, a drop to the 20-day exponential moving average ($10,957) and then to $10,400 is possible. 

A break below this level will be the first sign that bears are making a comeback. If the $10,000 level cracks, the correction is likely to deepen.

BTC/USD 4-hour chart

BTC/USD 4-hour chart. Source: TradingView

The ADX on the 4-hour chart has dropped to 17.6 level and the +DI and -DI are close to each other, suggesting a range-bound action in the short-term.

A breakout and close (UTC time) above the pennant will signal strength. However, the bears are unlikely to give up without a fight. They will again attempt to stall the up move in the $12,113.50–$12,304.37 zone.

If the price turns down from this zone, a few days of range-bound action between $10,400 and $12,304.37 is possible. However, if the bulls drive the price above $12,304.37, the momentum is likely to pick up.

ETH/USD

Ether (ETH) is currently consolidating in a strong uptrend, with the ADX above 59 levels. The bulls have not allowed the price to dip below the $366 support, which shows that traders are not booking profits in a hurry.

ETH/USD daily chart

ETH/USD daily chart. Source: TradingView

After the strong rally, if the ETH/USD pair does not give up ground, it is a sign that traders expect the uptrend to resume. In this case, a breakout and close above $415.634 will indicate the possible start of the next leg of the up move.

The first target to watch out on the upside is $480 and above it the rally can extend to $542. However, instead of the breakout, if the bears sink and sustain the price below $366, a drop to the 20-day EMA ($347) is possible. If the pair rebounds off this support, the bulls will attempt to resume the uptrend.

If the bears sink the price below the 20-day EMA, a drop to the next support at $320 is possible. 

The deeper the pullback, the longer time it will take for the next leg of the uptrend to begin. A break below $320 will indicate that the advantage is with the bears.

ETH/USD 4-hour chart

ETH/USD 4-hour chart. Source: TradingView

The 4-hour chart shows a symmetrical triangle formation, which generally acts as a continuation pattern. The ADX has dipped below 18 and the +DI and -DI are close to each other, suggesting a consolidation in the short-term.

If the bulls can push the price above the triangle, it will indicate strength but the momentum is likely to pick up only after the price sustains above $415.634. 

On the other hand, if the bears sink the price below the triangle, it will suggest profit booking by the bulls and will increase the possibility of a deeper correction.

XRP/USD

XRP started a strong up move from $0.194008 on July 21 that carried it to a high of $0.326113 on Aug. 2, which is a 68% rally within a short time. This has pushed the ADX close to 52 level, suggesting a strong trend. 

XRP/USD daily chart

XRP/USD daily chart. Source: TradingView

Currently, the XRP/USD pair is correcting the uptrend as short-term traders book profits. This could drag the price to $0.275649, which is the 38.2% Fibonacci retracement level of the most recent leg of the up move. Below this level, the next support is likely to be the 20-day EMA ($0.264).  

If the pair rebounds off either support, it will suggest that the bulls are buying the dips. If they can push the price above the flag, it will be the first sign that buyers have overpowered the sellers.

Above the flag, the first resistance could be $0.326113 and then $0.346727. If the bulls can propel the price above this zone, the momentum is likely to pick up. The next target to watch out for is $0.422. 

This bullish view will be invalidated if the bears sink the price below the flag. Such a move could signal a deeper correction.

XRP/USD 4-hour chart

XRP/USD 4-hour chart. Source: TradingView

The ADX on the 4-hour chart has dropped to about 21 level and the price is consolidating inside a symmetrical triangle, which suggests a balance between the bulls and the bears.

If the bulls can push the price above the triangle, a move to $0.326113 is possible. A break above this level might signal the resumption of the up move.

Conversely, if the bears sink the price below the triangle, a deeper correction to the 68.2% Fibonacci level of $0.244472 is possible.

A break below this support could result in a complete 100% retracement of the most recent leg of the up move, dragging the price down to $0.194008.

XMR/USD

Monero (XMR) hit an intraday high of $96.5594 on Aug.6, which met the target objective of $95 as suggested in an earlier analysis. The rally of the past few days has pushed the ADX to above 54 levels, which suggests a strong trend.

XMR/USD daily chart

XMR/USD daily chart. Source: TradingView

During two previous occasions (marked via ellipses on the chart) the XMR/USD pair had reversed direction from close to the $97.4615 level. Hence, the bears might again mount a strong defense at this resistance.

However, the pair has formed two successive inside day candlestick patterns in the past two days, which suggests uncertainty among the bulls and the bears about the next directional move.

A breakout and close (UTC time) above $97.4615 is likely to resume the uptrend. The next target objective is $121, with a minor resistance at $107, which is likely to be crossed. Traders can turn positive after the price sustains above $97.4615.

Conversely, if the bears sink the price below $90, a deeper correction to the 20-day EMA ($84) is possible.

VET/USD 4-hour chart

VET/USD 4-hour chart. Source: TradingView

The ADX on the 4-hour chart has dropped to below 15 levels, and the +DI and the -DI are close to each other, suggesting a balance between the bulls and the bears. The 20-EMA is also flattening out, which is another indication of a consolidation.

A breakout of $97.4615 will signal the likelihood of the start of the next leg of the uptrend while a break below $90 will indicate that the bears are making a comeback.

XTZ/USD

Tezos (XTZ) broke out of the $2.63–$3.25 range on Aug.8, which suggests that the bulls have overpowered the bears. The 20-day EMA ($3.08) is sloping up, which also suggests that the bulls have the upper hand.

XTZ/USD daily chart

XTZ/USD daily chart. Source: TradingView

If the bulls can sustain the price above $3.25, the next target objective is $3.87, which is just below the Feb. 19 highs of $3.97. The bears are likely to mount a stiff resistance at this level but if the bulls can scale the price above it, the momentum is likely to pick up.

Currently, the ADX is close to 18 levels, which suggests that the trend has still not picked up strength. The bears will make an attempt to drag the XTZ/USD pair back below $3.25. If they succeed, the pair could remain range-bound for a few more days.

XTZ/USD 4-hour chart

XTZ/USD 4-hour chart. Source: TradingView

The 4-hour chart shows that after two failed attempts, the bulls have finally managed to sustain the price above the range. The 20-EMA has turned up, which suggests that the bulls have the upper hand.

If the bulls purchase the retest of the $3.25 support, it will be a positive sign and will indicate that the sentiment is to buy the dips. A strong bounce off this support could offer a low-risk entry opportunity to the traders who are bullish.

Conversely, if the bears sink the price back below $3.25, then it will indicate that the current breakout was a bull trap.

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.

Massive Short Squeeze Prompts Chainlink (LINK) Price to Rally 52%

Chainlink (LINK) price continues to set new records as the DeFi-related token surged 52% to reach a new all-time high at $13.8799 today. 

Over the last 24-hours, LINK has surged by 52%, rallying from $9.05 to as high as $13.8799 on Binance exchange. 

LINK-USDT daily chart

LINK-USDT daily chart. Source: TradingView.com

As Chainlink demonstrated a strengthening uptrend, its competitor Band Protocol (BAND), which also operates as a network for oracles, spiked 50% to reach a new all-time high at $12.44.

What’s behind the Chainlink rally?

The sudden uptrend of LINK was likely caused primarily by the squeeze of short contracts in the futures market. As LINK was continuously rising, its funding rate stayed below 0%, hovering at -0.02%.

The cryptocurrency futures market employs a mechanism called “funding” to ensure the market is balanced. When the market is heavily swayed toward buyers, then buyers have to incentivize sellers and vice versa.

As an example, if there is an overwhelming number of traders shorting Chainlink on Binance Futures, then the funding rate would turn negative. In this situation, short contract holders or sellers need to pay long contract holders to maintain their positions.

Throughout the past several hours, as LINK price soared, its funding rate on Binance Futures remained negative. This is indication that as its price was soaring many traders were attempting to short the asset.

A continuous loop of short contracts caused a short squeeze, which, in turn spurred buying demand and fueled Chainlink’s momentum.

A pseudonymous trader known as Benjamin Blunts emphasized that while LINK is theoretically appealing to short, the market sentiment is bearish. When the market is overcrowded by one side, which in the case of LINK was bears looking to short the asset, it tends to move in the opposite way. 

The trader said:

“I actually would be inclined to start looking for shorts soon, however it seems my entire feed is doing the same. So I will wait for another push higher I think, not really interested in standing in front of the strongest, fastest horse right now.”

Zeus Capital and their infamous LINK short

The biggest narrative around LINK during the entirety of its rally revolved around Zeus Capital. The investment firm has publicly maintained a skeptical stance toward Chainlink, expecting LINK price to decline sharply. On August 9 the firm said:

“The ‘get rich fast’ narrative is a true indicator for manipulation. You can only win if you sell your $LINK before it goes to $0.”

A cryptocurrency investor called “Light” suggested that Zeus Capital holds a big short position on LINK, which was apparently at risk of liquidation. He said:

“And in one more poetic twist to the Zeus Capital story, for now, due to delays in the pricing oracle for their Aave borrow, even though LINK breached their liquidation price, their remaining DeFi short has not been liquidated (yet).”

It remains unclear whether a single short seller could have an immense impact on a cryptocurrency with a $2 billion daily volume on paper.

Bitcoin is Almost as Big as Bank of America

All the speculative capital invested in Bitcoin (BTC) at the moment totals just a few billion dollars shy of Bank of America’s market valuation.

Bitcoin’s current market cap sits just over $217 billion, according to Cointelegraph data at press time, while Yahoo Finance shows Bank of America’s market cap holding slightly over $226 billion — a comparison introduced in a recent article from The Next Web. 

Bitcoin’s market cap climbing in comparison

Although it has endured its fair share of dramatic price fluctuations, Bitcoin’s price has grown substantially in 2020, rising past several different wealth comparisons along the way.

Back in March, just before COVID-19 measures turned the world on its head, the United States Central Bank pumped the economy with $168 billion in capital. At the time, Bitcoin’s market cap held near $145 billion. 

In April, Amazon CEO Jeff Bezos’ touted a net worth of approximately $140 billion, with Bitcoin’s market cap near $130 billion. On paper, it seemed Bezos could have bought all the Bitcoin in circulation with a few billion to spare, although the mass purchase would likely prove impossible in real life due to factors such as rising prices and liquidity. 

Since then, Bezos’ net worth has reached a staggering $193 billion. Bitcoin’s valuation, however, remains higher near $217 billion. 

The asset could reach astronomical heights

In an Aug. 4 crossover podcast episode with Peter McCormack, host of the What Bitcoin Did podcastMorgan Creek Digital co-founder Anthony Pompliano recently forecasted a future Bitcoin market cap of more than $80 or $90 trillion at some point before the end of time. Pompliano, however, said he was unsure if Bitcoin would reach such a market cap within his lifetime.  

A long-time Bitcoin advocate, Pompliano has stated his position many times on Bitcoin as an asset uncorrelated with mainstream markets.