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Bitcoin Price Hits 2-Month High at $8.7K as 3 Bullish Factors Converge

Bitcoin (BTC) surprised traders and analysts alike on Jan. 14 after BTC/USD broke out of its already bullish channel to strike at resistance levels near $8,600.

Cryptocurrency market daily overview. Source: Coin360

Cryptocurrency market daily overview. Source: Coin360

BTC climbs 2% in an hour

Data from Coin360 and Cointelegraph Markets showed Bitcoin jump 2% in just over an hour on Tuesday to hit local highs of $8,745.

A slight retracement followed, with the pair circling $8,700 at press time amid heightened volatility.

Bitcoin 1-day price chart. Source: Coin360

Bitcoin 1-day price chart. Source: Coin360

The latest leg up brings Bitcoin’s 24-hour gains to almost 8%, the largest cryptocurrency remaining at levels previously thought to harbor considerable resistance.

As Cointelegraph reported on Monday, veteran trader Tone Vays was among those anticipating further gains, claiming over the weekend that BTC/USD faced little pushback until an area around $8,800.

Vays nonetheless added that not all indicators were flashing bullish, with derivatives giant BitMEX’s funding rate forming a notably uninspiring exception.

Others were slowly turning on their previously more hawkish stance. Regular Cointelegraph contributor filbfilb also began the week on a more buoyant footing.

“Maybe some chop sideways and a bit of a backtest but everything is there to make me overall bullish,” he summarized in a tweet on Sunday.

Supporting Bitcoin’s newfound strength are various factors, including healthy volume and open interest on multiple futures products. As noted by revered Bitcoin trader Murad Mahmudov on Monday, the combination of price, volume and open interest signal a uniquely bullish setup.

Bitcoin SV jumps 45% as altcoins awaken

Beyond Bitcoin, major altcoins also reacted to the momentum, with Ether (ETH) gaining 8.1% to break $155.

Ether 7-day price chart. Source: Coin360

Ether 7-day price chart. Source: Coin360

Out of the top twenty cryptocurrencies by market cap, however, Bitcoin SV (BSV) firmly led the charge, gaining a surprising 45% on the day to trade at $234. Fellow Bitcoin fork Bitcoin Cash (BCH) gained 22% over the same period.

Keep track of top crypto markets in real time here

Telegram Will Release Bank Records to SEC in Ongoing Gram ICO Case

Telegram will release bank records that the United States Securities Exchange Commission believes will prove misconduct in the latter’s $1.7 billion offering of Gram tokens. 

International privacy laws and the new information

Per a Jan. 13 filing with the court of the Southern District of New York (SDNY), Telegram will have until Feb. 26 to provide the court with the bank records that the court denied the SEC in an earlier ruling that was based on privacy concerns. 

Today’s ruling will allow Telegram to redact the information provided to the court in accordance with foreign privacy regulations. According to a letter to the court from the attorneys for the defense, Telegram — a company founded in Russia by Pavel and Nikolai Durov and currently based in Berlin — will provide the SEC with these bank records in full by Jan. 15, only redacting them before submitting them to the public record. 

The fact that Telegram’s attorneys have agreed to provide the SEC with full bank records, while the public will have access to redacted versions means that all eyes will be on the SEC’s next move as a bellwether of what they do or do not find in the new documents. Philip Moustakis, an attorney with Seward and Kissel and formerly senior counsel at the SEC, told Cointelegraph that the SEC will be on alert for evidence of Telegram’s “Failing to exercise reasonable care to ensure that the purchasers were not acting as underwriters.”

The story of the bank records

As Cointelegraph reported, the SDNY denied the SEC’s original request for information earlier in January but did so “without prejudice,” leaving the subject open to further discussion.

On Jan. 10, the SEC produced invoices from alleged underwriters to Telegram’s sale of Gram tokens that the SEC believes demonstrate offering of Gram tokens outside of their approved timeline. 

SEC v. Telegram in brief

The saga of the U.S. regulator and the messenger service began in earnest on Oct. 11, when the SEC filed an emergency action demanding a cease-and-desist in Telegram’s offering. The SEC called the sale of Gram tokens an unregistered securities offering, while Telegram argued that it qualified under Regulation D exemptions to the requirement to register as such an offering. 

The SEC has been examining opportunities to adapt its Reg. D exemptions, which are dependent on making offerings to “accredited investors” alone, who by the logic of U.S. securities law does not require the same degree of regulatory protection as main-street investors. Despite this ongoing reconsideration, the commission has persisted in identifying Telegram’s offering as a security offering, meaning that the case will continue.

CME’s Options on Bitcoin Futures Pass Regulatory Approval and Go Live

The Chicago Mercantile Exchange (CME) has received necessary regulatory approval and has launched its new Bitcoin (BTC) futures options as of today, Jan. 13.

According to the official website of CME, the new type of Bitcoin derivatives contract — Bitcoin futures options — is now live, which comes in line with the company’s plans announced in November 2019.

CME’s Bitcoin futures options was subject to “regulatory approval” earlier in the day

Specifically, the launch of CME’s Bitcoin futures options follows regulatory approval that the exchange received earlier today, as reported by Cointegraph. As of press time, the approval notice has gone from the website, which apparently means that regulators have given the green light.

CME, one of the first exchanges to host Bitcoin futures contracts — alongside the Chicago Board Options Exchange back in 2017 — first announced its plans to introduce options on Bitcoin futures on Nov. 12, 2019. According to CME, the new product was announced in response to growing interest in cryptocurrencies and customer demand for tools to manage Bitcoin exposure.

Crypto derivatives market continues to surge

The news comes amid Bitcoin futures traders reportedly generating at least $20 billion in daily volume last week. According to aggregate volume data for Bitcoin futures products by analyst Skew Markets, global futures trading volume exceeded $20 billion on Jan. 8 alone.

Meanwhile, CME is purportedly the third global derivatives player to launch trading for options on Bitcoin futures. The exchange was apparently beaten by cryptocurrency derivatives exchange FTX that reportedly quietly launched Bitcoin options trading on Jan. 11.

As reported by Cointelegraph, the Intercontinental Exchange (ICE)’s digital asset platform Bakkt has become the first exchange to launch Bitcoin options in the United States.

According to estimates, crypto futures trading volume reportedly amounted to almost 50% of the value of spot trading on crypto markets as of late October 2019.

Bitcoin Breakout Hopes, Telegram Trial, Binance Donation: Hodler’s Digest, Jan. 6–12

Coming every Sunday, Hodler’s Digest will help you track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions and much more — a week on Cointelegraph in one link.

Top Stories This Week

Bitcoin on the verge of breaking seven-month downtrend

It’s been another tumultuous week for the world’s biggest cryptocurrency, which is on the verge of breaking out of a long-running downtrend. Although BTC rallied to $8,400 a few days ago — which is the next resistance zone, according to analysts — prices have since retreated back to the low $8,000s. It follows speculation that geopolitical instability, fuelled by the increasing tensions between the United States and Iran, may have sparked the surge. Data from Google Trends showed that the search term “Bitcoin Iran” surged 4,450% in the seven days leading up to Jan. 8. Also this week, Fundstrat Global Advisors suggested that BTC has the potential to deliver 100% returns to investors in 2020 — and prices may rise significantly in the five months before the halving in May.

ECB president pushes for a central bank digital currency

The president of the European Central Bank, Christine Lagarde, has said she supports the institution’s efforts to develop a central bank digital currency that would facilitate faster and cheaper cross-border payments. She revealed that the ECB is continuing to “assess the costs and benefits” of such an asset, as it would enable the public to continue using central bank money even when old-fashioned coins and banknotes decline. Adding a note of caution, an ECB spokesperson told Cointelegraph that “it will take a while” before its in-depth analysis on a CBDC is complete. Nations around the world are racing to launch their own digital currencies — and this week, the People’s Bank of China said work on its digital yuan is “progressing smoothly.”

Court denies SEC request to make Telegram reveal ICO bank records

A request by the U.S. Securities and Exchange Commission for Telegram to reveal its bank records has been rejected by a judge in New York. Telegram’s lawyers will undoubtedly be breathing a sigh of relief that the application has been thrown out. The SEC has been trying to find out how Telegram spent the $1.7 billion raised during its initial coin offering in 2018, but the company said the regulator’s request amounted to an “unfounded fishing expedition.” It isn’t all smooth sailing for Telegram, however, as it will still have to prove that its bank records comply with foreign data privacy laws. The messaging platform said that this review will take up to seven weeks to prepare.

Former Mt. Gox CEO Mark Karpeles seeks to put long-standing lawsuit to rest

The former CEO of the defunct BTC exchange Mt. Gox has kickstarted efforts to put an end to litigation that was filed by a former user of the exchange back in 2014. Mark Karpeles argues that he is entitled to summary judgment because Gregory Greene, the main plaintiff, has admitted that his initial claims were either untrue or unsupported. The defendant’s lawyers wrote: “The time has come to end this litigation in its entirety.” Greene’s lawsuit accuses Karpeles of criminal conversion and fraud, and alleges that Mt. Gox’s bank continued to accept deposits even while customers were having difficulty withdrawing their funds. Mt. Gox famously collapsed in 2014 when around 800,000 BTC — at least 700,000 of which belonged to customers — was stolen.

Changpeng Zhao

Binance charity launches relief effort for Australian bushfires

The Binance Charity Foundation is donating $1 million worth of BNB tokens to the Australia Bushfire Donations project. The pledge from the philanthropic arm of the major cryptocurrency exchange comes as the country struggles to cope with devastating fires that have killed dozens of people, destroyed thousands of homes and scorched large swathes of land. Binance CEO Changpeng Zhao has called on the whole crypto community to offer its support as the fires continue to rage.

Winners and Losers

At the end of the week, Bitcoin is at $8,177.14, Ether at $145.01 and XRP at $0.21. The total market cap is at $218,284,671,194.

The top three altcoin gainers of the week are Aave, GoChain and Chimpion. The top three altcoin losers of the week are Synthetix Network Token, ABBC Coin and Quant.

BTC/ETH

For more info on crypto prices, make sure to read Cointelegraph’s market analysis

Most Memorable Quotations

“We are working on all aspects of CBDC, with in-depth analysis of costs and benefits of such a new form of central bank money.”

Christine Lagarde, ECB president

“Beware these scams. Now on Instagram :(“

Martin Lewis, British financial expert 

“Something unforeseen that could happen could really move it [Bitcoin] faster.”

Sonny Singh, BitPay chief operating officer

“It is painful to see the bushfires burning across Australia as well as the devastating effects on the ecology and local community. We want to help this urgent crisis.”

Changpeng Zhao, Binance CEO

“Litecoin Difficulty Ribbon now in recovery. Should set up a bullish breakout of the bearish channel. I wouldn’t be surprised if LTC leads a bullish breakout of BTC.”

Willy Woo, crypto analyst

Prediction of the Week

BitPay exec: “Something unforeseen” to push Bitcoin over $20,000 in 2020

Sonny Singh, the chief commercial officer at BitPay, says Bitcoin will reach its highest price ever this year… with “unforeseen” events attracting new buyers. He told Bloomberg that the reasons for the rise will only become clear once a bullish surge kicks in. Singh pointed to how BTC enjoyed gains when Greece was grappling with its sovereign debt crisis in 2015, and the boost for crypto awareness that came when Facebook announced plans for its Libra stablecoin last year. His prediction is one of the more optimistic out there. While Galaxy Digital’s Mike Novogratz believes $12,000 will be achievable in 2020, veteran trader Peter Brandt thinks BTC could tumble to $5,500 in the summer.

Related: Experts Share: What Will Bitcoin’s Price Look Like in 2020?

FUD of the Week

Bitcoin scam ads featuring Martin Lewis now spotted on Instagram

A British financial expert has warned the public to be aware of BTC scam adverts featuring his face on Instagram. In the ad, Martin Lewis appears to be endorsing a “revolutionary Bitcoin home-based opportunity” — and it links to a rip-off version of a major news website. This comes months after Lewis successfully settled a defamation lawsuit against Facebook, the owner of Instagram, for showing similar ads. Although Facebook and Instagram had banned crypto ads at the start of 2018, it eased this policy in May 2019 — prompting dozens of fake Libra pages to flood both sites.

Sonny Singh

CFTC cannot locate man responsible for $140 million crypto Ponzi scheme

Red-faced officials at the U.S. Commodity Futures Trading Commission have said they cannot locate a man who is allegedly responsible for a crypto Ponzi scheme worth more than $140 million. Benjamin Reynolds is accused of defrauding over 1,000 investors to the tune of 22,858 BTC. The CFTC tried to serve Reynolds at the “service address” of the company that managed the scheme, but it emerged that the address didn’t actually exist. Attempts to contact him over email have also been unsuccessful.

Directors of alleged crypto pyramid scheme Dunamiscoins to stand trial

Two directors of an alleged crypto pyramid scheme in Uganda have appeared in court to face 65 counts tied to obtaining money by false promise. Prosecutors have logged more than 4,000 complaints against Dunamiscoins, a suspected fraud that collapsed in December 2019 after almost two years in operation. It is believed that dozens of victims lost up to $38,000 investing in the scheme, which promised to deliver extraordinary returns. Earlier reports had indicated up to 10,000 people may have been affected, with total losses of more than $2.7 million. Samson Lwanga and Mary Nabunya have pleaded not guilty to the charges.

Christine Lagarde

Best Cointelegraph Features

Bitcoin is becoming more valuable to Iranians amid tensions with the U.S.

Shiraz Jagati takes an in-depth look at BTC’s movements following the death of Iranian commander Qassem Soleimani, and asks whether Iranians really believe in the power of Bitcoin.

Blockchain and crypto: Will security issues finally be dealt with in 2020?

As crypto has gained popularity over the past few years, more and more security breaches have emerged. Alex Kech explores whether 2020 will see greater collaboration to prevent such incidents, or enable stolen funds to be recovered.

What happens if the U.S. loses the blockchain war?

China is seizing an opportunity to stand up to the United States and flex its muscles. But what will happen if Beijing wins the blockchain race? Paul McNeil has a look.

Bitcoin Price $4K by April? One Big Reason to Not Be Bullish Just Yet

Bitcoin price (BTC) increased over 10% over the past week, so it didn’t take long for the usual crypto Twitter suspects to start screaming that they are all bullish now. Even I saw some bullish momentum as outlined in last week’s analysis, but have we seen the bottom yet? Or is there more downside to come before we resume a bull trend?

Daily crypto market performance

Daily crypto market performance. Source: Coin360.com

The monthly MACD is bearish

BTC USD monthly chart

BTC USD monthly chart. Source: TradingView

Working backward through various time frames, a look at the Moving Average Divergence Convergence (MACD) shows it crossed bearishly on Dec. 1 and the first red candle on the histogram was printed.

Bitcoin has never seen a single candle before changing the bias on the MACD in its entire history. As it’s one of the most widely used indicators for momentum trading, this indicates that there is bound to be a longer downward period than most traders would like to admit.  

However, one positive that is worth taking note of is that the last bullish phase was the shortest the MACD has seen on Bitcoin, just 6 months of green before flipping red. As such, speculating on how much longer we could expect a bear market for is difficult. 

If these phases are getting smaller and smaller the optimist in me suggests 4 months before we see a true bottom and reversal, which would put the pivot around April 1, 2020.

The monthly Bollinger Bands 

BTC USD BB monthly chart

BTC USD BB monthly chart. Source: TradingView

Using a combination of the Bollinger Bands (BB) indicator and the monthly volume for Bitcoin, it’s impossible to ignore how much volume has dropped off over the last 2 years. This can be interpreted in many ways. Some may view breakouts in these conditions as very short term pumps, as there’s no real interest in the asset, or some may see it as a time to be greedy when others are fearful and start accumulating.  

I’m off the view, that there’s no interest in Bitcoin, therefore the price movements we’re witnessing are short term pumps as whales continue to offload their bags as they wait for the bottom.  

The moving average (MA) of the BB shows $7,100 as critical support for Bitcoin. Should the price fall below $7,100 and this price level flips to resistance, we can then expect the price of Bitcoin to slowly make its way towards the support of the BB which is currently $2,500-$3,200 depending on your BB settings.  

I see the bottom BB support at $3,200. However, I don’t believe we will get this low. The support on the BB is gradually getting higher by the month. If it continues at this trajectory, the support could be as high as $3,800 by April 1, 2020.    

This to me is a plausible target date for the bottom since the upcoming halving is expected in May, and I’m not the only person that shares this view. Twitter user @22loops called the 2019 bottom with astonishing accuracy last year, and he’s at again with his new year’s tweet that puts Bitcoin price at around $3,797.

Why Bitcoin price isn’t bullish just yet: the weekly BB rejection

BTCUSD weekly chart

BTCUSD weekly chart. Source: TradingView

Moving over to the weekly BB, we can see where Bitcoin faltered last week. It was rejected precisely at the MA of $8,462 leaving the digital asset in the lower part of the Bollinger Bands. 

Therefore, until Bitcoin flips the MA to support, there’s no real reason to be bullish just yet.

The support here shows $6,330 as the last stronghold for Bitcoin before beginning to accept the likelihood of a sub-$4,000 Bitcoin price. However, should Bitcoin find itself on another run, breaking past the $10,000 barrier doesn’t seem to be where the issue is, but slightly higher around $10,500 seems to be where we’d expect to see BTC struggle. 

Currently, both of these scenarios are too early to call, but with that being said, the weekly MACD is definitely giving a reason for the bulls to be excited.

Bullish momentum is returning to the MACD

BTCUSD weekly RSI chart

BTCUSD weekly RSI chart. Source: TradingView

Whilst I’m a big fan of following the weekly MACD as a very reliable indicator for Bitcoin, there is one element that I can’t overlook in its current setup. If the Bitcoin price continues to stay in its current range for another 2-3 weeks, the MACD line is set to cross bullish.  

However, the positioning around the zero line doesn’t look too hot. If we take a look at the last 2 bullish crosses, they occurred at – 472 and -899 with the latter being the cross that had more momentum.  

The cross at -472 resulted in some bullish momentum, but shortly after, the Bitcoin price fell again, and it crossed into a bear trend. What is concerning here, is that should Bitcoin cross bullish on the weekly MACD, it’s likely to occur somewhere around -200 below the zero line. But what does that mean for the next bullish move? 

History tells us, that perhaps it’s too early to be screaming “Bitcoin bull run” from the rooftops just yet, and this is further echoed by the rather weak Relative Strength Index (RSI) indicator, which is currently only showing a reading of 46.53 on the weekly timeframe.

The daily charts, however, are starting to tell a story of what to expect when you combine all 4 indicators mentioned in this analysis.  

Is the daily timeframe bullish or bearish?

BTCUSD daily chart

BTCUSD daily chart. Source: TradingView

Above is what I see as a short setup. The Bitcoin price is at the top of the BB. The RSI is overbought, and the volume is declining, however, volume is typically thinner at the weekends. 

The last thing I’d look at is for the MACD to cross down. At present, the MACD is still strong and is yet to show signs of crossing down.  

If there’s a decline in the price, the MACD will start to cross down, and from here I’d be looking at the BB MA as my target price which is $7,400; and this target I feel is realistic due to the gap left on the CME chart. 

BTCUSD daily chart

BTCUSD daily chart. Source: TradingView

The CME is showing a gap at $7,685. Whilst this is a very tight gap that some may argue nearly closed last week, the fact remains it is there on the charts for all to see.   

Closing this gap would most certainly force the daily MACD to cross bearish, and potentially end the bullish momentum for the price of Bitcoin.

Bearish scenario

If the CME gap fills, and Bitcoin continues to fall from $7,865, then the levels of support to watch would be $7,400. If this level fails to hold, the monthly MA on the Bollinger Bands shows that $7,100 is the price to defend. 

If both these levels hold, the last chance saloon for Bitcoin is $6,800 before the hodler doomsday scenarios start playing out, and from here I’d be looking for another MACD bear to bull cycle before being bullish again. 

Bullish scenario

Not much has changed since last week. The daily and weekly MACD are both bullish and should Bitcoin continue on this path the key resistance that must be broken remains at $8,500. 

Breaking this level would change the path of Bitcoin massively, opening up much larger leaps in price towards $10,500-$11,000 levels. That being said, 2-3 weeks of flat price action is equally bullish for Bitcoin in the medium term.

The views and opinions expressed here are solely those of @officiallykeith 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.

Bitcoin Price Is on the Verge of Breaking 7-Month Downtrend

The price of Bitcoin (BTC) broke out of a 2-month range and rallied to $8,400 during this week. However, the price couldn’t break out of the downtrend and is stuck in a new range.

Is the price of Bitcoin already in a bull market, or is the price expecting continuation downwards?

Crypto market daily performance. Source: Coin360

Crypto market daily performance. Source: Coin360

Bitcoin price is hovering below resistance and trendline

The chart of Bitcoin is showing an apparent breakthrough in the $7,600 level. After this upwards breakout, the price started to rally towards the next resistance zone, found at $8,400. This is also the downwards trendline (blue diagonal line) at which the price is currently hovering.

BTC USD 1-day chart. Source: TradingView

BTC USD 1-day chart. Source: TradingView

The price is moving in a crucial range, as a breakout above $8,400 would lead to a breakout of the 7-months downtrend. However, losing the $7,600 level as support would lead to an acceleration downwards, and then the price is likely to be continuing towards $6,400 or $5,800.

BTC USD 4-hour chart. Source: TradingView

BTC USD 4-hour chart. Source: TradingView

The 4-hour chart shows a clear retest of the $7,660 level as confirmation of support yesterday. After this test, the price of Bitcoin rallied towards $8,200 and got rejected while establishing a new range.

Total market capitalization aiming to break out of the downtrend

Total market capitalization cryptocurrency chart. Source: TradingView

Total market capitalization cryptocurrency chart. Source: TradingView

The total market capitalization chart is showing a similar outlook for the Bitcoin chart. A clear breakout upwards during the past week, as the $195 billion resistance broke to the upside. This breakout resulted in a push towards $211 billion, which is the next resistance for the total market capitalization.

Similar, the downtrend is not done yet, as the market cap is still hovering below the trendline. However, a clear break above $211 billion would mean that the market capitalization will be ready to move towards $248 and $268 billion as the next target area.

Altcoins flipping necessary USDT levels as support

How are altcoins performing recently? They are doing reasonably well against their USDT pairs. If people want to trade altcoins, it’s compulsory to use both BTC and USDT charts as that would give a clear view of the movements of the coin.

Ether (ETH) provided an excellent breakout upwards in the USDT pair recently, as the chart below shows.

ETH USD 1-day chart. Source: TradingView

ETH USD 1-day chart. Source: TradingView

ETH made a clear break of the $133 level, pushing price towards $145. A similar retest occurred and provided a good bounce, which means that buyers stepped in at $135 and confirmed this as the new support.

The price of Ether is currently also hovering below the downwards trendline. If the price can break out to the upside, targets of $167 and $190 are on the table.

A similar support/resistance flip is found on the XRP chart.

XRP USD 1-day chart. Source: TradingView

XRP USD 1-day chart. Source: TradingView

The XRP chart is showing a similar story as the other large caps: a move to the upside in which a retest resulted in confirmation of the breakout. If the price of XRP is stabilizing above the recent resistance, a breakout and continuation are likely to occur.

This breakout would lead to a potential retest of the $0.30, the level XRP bounced on throughout 2018. On the other hand, losing the green level at $0.20 would mean continuation to the downside.

Altcoin market capitalization showing similarities with February 2019

Total altcoin market capitalization chart. Source: TradingView

Total altcoin market capitalization chart. Source: TradingView

The total altcoin market capitalization shows similarities with the period in February 2019. The market capitalization has been hovering below the $59 billion support for a month, which was flipped into support in the recent week.

A similar move was seen in February 2019 with the $49 billion levels. This retest marked the start of an uptrend in the months after. If the total altcoin market capitalization can make a similar move in this period, a push towards $78-80 billion would be expected. 

Bullish scenario Bitcoin

At this point, there are two simple scenarios that are likely to happen for the current Bitcoin price action. Let’s start with the bullish one first.

BTC USD 1-day chart bullish scenario. Source: TradingView

BTC USD 1-day chart bullish scenario. Source: TradingView

Support around the $7,600 area must be maintained for the bullish scenario. If the price of Bitcoin can do that (which it looks like at this point), the price is ready for continuation to the upside.

In that regard, a breakout of the downtrend is likely to occur. A breakout would trigger more people to step into the market, causing a strong impulse wave to the upside.

If Bitcoin breaks the downtrend, then the $9,500 and $10,000 levels will be the next targets. Another resistance level is found at $8,800, but it’s likely to be broken. The reasoning is simple: a breakout of a 7-months downtrend would give a strong impulse move and strong buying power. Thus, a push to $9,500 is expected to occur.

The $9,500 level is crucial as price bounced several times here during the summer of 2019. Therefore, it is likely to be the next resistance.

Bearish scenario Bitcoin

BTC USD 1-day chart bearish scenario. Source: TradingView

BTC USD 1-day chart bearish scenario. Source: TradingView

The $7,600 level is also a crucial level for the bearish scenario. If the price of Bitcoin can’t hold the $7,600 level as support, the breakout to the upside can then be classified as a “fake-out,” possibly leading towards the continuation of the downward movements.

An example shows the big push towards $10,000 in October. The price of Bitcoin wasn’t able to find support after this push and started to accelerate to the downside, dropping even lower than the recent low.

Thus, if the price of Bitcoin can’t hold $7,600, the sentiment will then flip bearish and traders will see where the price of Bitcoin will find new support. In this case, acceleration to the downside would make me believe that $6,400 and even $5,600-5,800 could be tested as the next support levels.

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.

Japan Crypto Exchanges Face Imminent Margin Trading Limits: Report

Bitcoin (BTC) and cryptocurrency exchanges in Japan will face significant restrictions on margin trading as soon as this Spring, according to reports.

Referencing sources at Japan’s finance regulator, the Financial Services Agency (FSA), local English-language news outlet Japan Times revealed plans to limit margin leverage to twice the total of traders’ deposits.

FSA seeks to counter crypto volatility

The move follows on from a limit of four times traders’ deposits which the domestic exchange industry imposed on itself through a self-regulatory body last year.

The reason, according to the FSA sources, is to guard against periods of volatility on cryptocurrency markets.

On the timeframe for implementation, Japan Times added:

“The new rule will be included in a Cabinet Office order linked to the revised Financial Instruments and Exchange Act which will go into force in spring.”

It remains unclear whether the restrictions will take effect immediately following the introduction of the Act.

A worthwhile trade-off?

Margin trading can involve significantly larger market moves due to the potential size of the wins or losses, particularly when large numbers of investors engage in the practice at once.

As Cointelegraph reported, the tool’s impact has become a cause of controversy for some, who attribute it to manipulation of cryptocurrency price performance.

In October, data showed open interest in margin trading was at an all-time high in Japan.

Exchanges appeared to at least in part forecast the changes, meanwhile, with Coincheck announcing it would halt leveraged trading altogether from March.

Japan has sought to become a friendly jurisdiction for cryptocurrency, fostering permissive regulations and closely monitoring exchanges. At the same time, authorities have said they see no demand for a central bank digital currency, or CBDC, among consumers.

Authors of New York’s P2P ‘Public Venmo’ Bill Hope for Greater Decentralization

New York lawmakers proposed a bill on a peer-to-peer (P2P) savings and payment platform called the “New York Inclusive Value Ledger.”

Introduced by New York State Assembly legislator Ron Kim and Senator Julia Salazar, the bill proposes to set up the “empire state inclusive value ledger establishment and administration act” that would create a system of wallets for payments by state entities and residents. According to public records, the bill was proposed in the State Assembly and the State Senate on Oct. 23, 2019, but New York State’s legislative session only reopened on Wednesday Jan. 8.

Kim says that implementing blockchain technology would be “very difficult”

The system described in the bill is based on eponymous white paper written by Robert Hockett, a law professor at Cornell University. Published on Oct. 17, 2019, the white paper sets out the Inclusive Value Ledger (IVL) plan, which aims to bolster the mechanisms of the state’s monetization, production, saving and spending with the help of new digital technologies.

Despite having the word “ledger” in its name, the IVL will not necessarily be based on distributed ledger technology (DLT) or blockchain. In fact, the white paper doesn’t refer to either blockchain or cryptocurrency incorporation to the IVL at all.

In this regard, Assembly member Kim outlined that creating a blockchain or crypto-based type of initiative would be very complicated, so the authors of the project made the proposal’s language open enough for providing a “100% free and public payment platform.” Speaking to Cointelegaph by phone, Kim said:

“We thought it would be very difficult for us to launch a full blockchain-cryptocurrency type of technology up front. So what we tried to do is make our language as open as possible to make the initial argument that payment platforms do not have to be just privately run. And we could — just like anything we do providing a highway or sidewalk as a public good — we could provide a 100% free and public payment platform.”

The author of the IVL white paper says “some form of DLT seems likely”

Hockett, the white paper’s author, told Cointelegraph that incorporation of “some form of DLT seems likely, even if not yet quite certain,” adding that the the project designers are still in the process of evaluating different opportunities. He said:

“At present we know what functionalities we require and are assessing the various ways to provide those. There are many, some of which of course are blockchain or other-chain based.”

When asked why the system refers to the term ledger, which is widely used in the crypto industry and particularly used to refer to major global crypto wallet firm Ledger, the professor said that this term is “much broader in meaning.” Hockett elaborated:

“First, given how payments technologies are developing, some form of DLT seems likely, even if not yet quite certain. And second, as you know, the word ‘ledger’ is much broader in meaning than any contemporary digital application. ANY system of debit/credit accounting is tracked on a ‘ledger,’ be it digital and distributed or be it tracked, as it was for many centuries till the mid-20th, on a literal paper ‘account book’ (one synonym for which has always been ‘ledger’).”

Why does New York need the Inclusive Value Ledger aka “Public Venmo?”

Also referred to as “Public Venmo,” the project has ambitious goals as it intends to address a number of interconnected challenges in the New York state economy: financial inclusion, keeping money in local commerce, payment speed, monetization or incentivization, as well as financial privacy.

Specifically, the project aims to provide free access to the payment system to the unbanked and under-banked, professor Hockett explained, noting:

“Those who now either lack access to payment systems or who must pay extractive fees for such services now will have free access to them, as was the case for all of us back when all money was paper or coin.”

If passed, the IVL bill would impact as many as one third of homes in New York City. According to New York City’s Department of Consumer and Worker Protection, more than 1 million households are unbanked or underbanked. Nationwide, the number is slightly lower at roughly a quarter of all American households lacking adequate access to financial services.

Regarding privacy, the IVL aims to provide “whatever degrees and kinds of privacy New Yorkers wish to characterize their money and payments system,” while also ensuring compliance with Anti-Money Laundering measures and related practices. “The IVL system enables us to be as strict or as flexible as we want to be along any of those dimensions,” Hockett said.

The IVL intends to tap uncollected tax credits while striving for decentralization

Assembly member Kim emphasized that the proposed bill is not just about upgrading the government system but rather injecting more cash flow into local communities. The IVL system aims to pay for traditionally unvalued and undervalued work such as care work that often goes under-compensated. Eventually, the IVL will help to effectively administer untapped tax credits by integrating those rebates directly into its public P2P platform, Kim said.

Kim also suggested that the project would likely become more decentralized in the future. He said:

“The long-term goal is really to decentralize the process and to tokenize the benefits. There can be very minimal involvement from any state or local or central government operators. We could potentially create a very decentralized peer-to-peer system.”

Kim says that the IVL is better than Andrew Yang’s $1,000 UBI proposal

Kim has also contrasted the IVL model with universal basic income (UBI), an idea that has gained publicity as part of 2020 Democratic presidential candidate Andrew Yang’s campaign. While Yang’s UBI proposal suggests granting every American $1,000 a month in cash, the New York Assembly member believes the IVL system is better than just cash.

According to Kim, just providing people with cash offers them a lower level of protection than a transparent ledger system that integrates already-existing tax credits. The legislator argues that putting money on a public payment platform enables more security and ensures that the money is being used for local commerce.

The “Democratic Digital Dollar” vs. Libra

While the IVL white paper is a P2P payment platform that represents New York’s version of the plan, another IVL-associated white paper called the “Democratic Digital Dollar” refers to the initiative in a more general sense, Hockett explained to Cointelegraph. Also released in October, the Democratic Digital Dollar white paper represents an extension of the IVL. The original IVL white paper reads:

“The result would be a complete and fully integrated federal, state, and local P2P payment platform and associated Democratic Digital Dollar, with localities able to administer dollar-denominated community currency systems, states able to join and to integrate localities in that project of intrastate payment system completion, and the US Treasury providing the platform through which payments flow among household, business firm, municipal, state, and federal treasuries.”

As the original IVL white paper draws up a complementary currency or payment system plan, this digital dollar initiative is considered to be complementary. As part of the IVL, this digital dollar will be digital in the sense that individual wallets will be credited and debited digitally in dollar units, Hockett said. According to the professor, the initiative will “render all other such projects completely superfluous,” noting that the digital dollar initiative is absolutely different from Facebook’s stablecoin project Libra and “other proposed scams.”

Hockett had previously explicitly criticized Libra proposal. The professor predicted a thorny path filled with regulatory issues for Libra. In a Forbes article published just a couple of days after Libra’s white paper was released on Jun. 18, 2019, Hockett wrote:

“Will regulatory approval be forthcoming? I think it virtually certain that it won’t if Libra retains its current announced form – at least without attached ‘strings’ that neither Facebook nor its consortium partners are likely to accept. […] not only will Libra likely have to register as and submit to exacting regulation both as a de facto money market fund and as a systemically important financial institution (‘SIFI’) by the Securities and Exchange Commission (‘SEC’) and the Financial Stability Oversight Council (‘FSOC’), respectively, but it also will have to jump through all counterpart hoops raised by counterpart regulators in all other jurisdictions where Libra would be available.”

UK Financial Watchdog FCA Now Supervises AML/CTF Compliance of Crypto Businesses

Britain’s Financial Conduct Authority (FCA) now monitors anti-money laundering (AML) and counter terrorist financing (CTF) for companies carrying out cryptocurrency-related activities.

According to an official announcement published on Jan. 10, FCA will supervise whether United Kingdom-registered businesses engaged in crypto asset-related operations are compliant with relevant regulations and requirements.

List of requirements to crypto businesses

Further in the announcement, FCA set forth a list of requirements for cryptocurrency-related businesses, which includes the identification and assessment of risks in regards to AML and CFT, development of policies and controls to eliminate risks associated with AML and CFT, conduction of customer due diligence, and others.

“We will proactively supervise firms’ compliance with the new regulations, and will take swift action where firms fall short of desired standards and cause risks to market integrity,” the announcement said.

Britain’s crypto drama

Back in July 2018, FCA warned that cryptocurrencies pose a huge risk to consumers who are generally misinformed about them, and recommended that products such as derivatives and exchange-traded notes that reference crypto-assets were “ill-suited” to small investors.

Although the FCA is still considering the restriction of crypto derivatives for retail investors, it concluded last summer that major cryptocurrencies are “exchange tokens” which are “usually decentralized and primarily used as a means of exchange.”

At the time, the regulator emphasized that such digital currencies do not fall under the regulatory scope of the FCA and are outside its regulatory purview.

In late November of last year, Piers Ridyard, CEO of the Radix decentralized ledger, told Cointelegraph that U.K. authorities are actually relatively open to crypto innovation, and noted:

“The FCA has been progressive on its views on crypto for years; including monitoring and permitting trials of the technology in sandbox environments before regulatory licenses are needed. The UK generally sees itself as a Fintech leader, and the FCA sees part of its job as not getting in the way of innovation.”

Bithumb May Pour Over $8M Into South Korea’s Regulation-Free Zone

Bithumb, one of the world’s largest cryptocurrency exchanges, could invest more than $8 million into South Korea’s regulatory sandbox. 

Via its daughter company GCX Alliance, Bithumb has shown intent to put 10 billion won ($8 million) into South Korea’s “regulatory free zone” in Busan, according to reporting from Seoul on Jan. 9. 

Regulation-free zone

South Korea’s second-largest city, Busan, has been the subject of prior headlines for its status as a deregulated outpost and for its desire to create a digital currency based on blockchain technology, as Cointelegraph reported in July 2019.  

In December 2019, KT, South Korea’s most sizable telecom company, announced the introduction of a blockchain-based currency local to Busan. 

Fund usage

Bithumb has shown interest in putting the 10 billion won toward the Tongsan Asset Exchange, located in Busan, as indicated by Korea’s Ministry of Small and Medium Venture Businesses, the Korean news article said. 

South Korea’s Financial Services Commission plans to review the endeavor with Bithumb near January’s end. 

The article added:

“The industry expects Bithumb to launch various blockchain-based financial businesses in Busan with this investment.”

According to a Jan. 6 Cointelegraph report, the Presidential Committee of South Korea recently pushed for the approval of crypto derivatives products in the country.

Canada’s DMG Blockchain Installs 1,000 New Bitcoin Mining Rigs for US Client

Canadian tech company DMG Blockchain Solutions has installed 1,000 new Bitcoin (BTC) mining machines at its Christina Lake mining-as-a-service facility in British Columbia. 

Per a Jan. 6 press release, DMG has purchased the new miners from Chinese mining giant Bitmain, with the total power consumption of approximately 1.5 megawatts. 

Initially announced in December of last year, the newly installed mining equipment will serve a U.S.-based client, whose name was not revealed in the release. DMG operates as an industrial scale crypto mine hosting company, allowing clients to mine crypto through equipment stationed at its facilities in Northwest Canada. 

DMG’s crypto mining developments

DMG’s COO Sheldon Bennett said that “DMG made a decision to focus on attracting large scale hosting clients as profitable crypto-mining is a function of creating cost efficiencies, and our mining facility is well suited for industrial miners.”

Last October, DMG and Bitmain entered an exploratory agreement, under which DMG has been managing Bitmain’s Texas-based facility and set up nearly 15,000 next-generation miners.

In November 2018, DMG energized its new crypto mining facility, stating that the facility would start at 60 megawatts, and can expand its capacity up to 85 megawatts. The 27,000 square foot crypto mining-as-a-service operation occupies an area of 34 acres and is ostensibly one of the biggest such operations in North America.

Since the facility uses hydroelectric power — of which there is a surplus in Canada — the operation reportedly does not affect the power needs of local residents.

Crypto mining proliferates

On Jan. 8, digital currency mining firm Riot Blockchain began deploying around 3,000 new units of S17 Pro Antminers purchased from Bitmain as part of the full upgrade of its Oklahoma City mining facility.

Riot anticipates that, following the deployment of all 4,000 next-generation miners, its aggregate operating hashrate at the Oklahoma City mining facility will reach approximately 248 petahash per second, representing a 240% increase in hardware power efficiency compared to its mining hashrate.

China’s Nationwide Blockchain Network BSN Will Launch in April 2020

China’s nationwide blockchain network, the Blockchain-based Ser­vice Net­work (BSN), will launch in April 2020, six months after it was rolled out for testing.

Backed by Chinese government policy think tank the State In­for­ma­tion Cen­ter (SIC), the ambitious project aims to provide a trusted and scalable infrastructure for supporting new blockchain projects as well as the development of smart cities and the digital economy.

BSN is a joint initiative of China’s state policy think tank and state-run companies

Tang Sisi, deputy head of the Smart City Development Research Center of the Chi­na’s State In­for­ma­tion Cen­ter (SIC), announced the news at the China Ur­ban Reg­u­la­tion In­no­va­tion Fo­rum in early January, Chinese finance-focused publication Sina Finance reported on Jan. 7. According to the executive, the BSN will be officially launched for commercial operation in April after the network was first released for internal beta testing in October 2019.

As previously reported, the BSN network is an interregional public infrastructure network that was jointly developed by the SIC, major China’s state-run telecom China Mobile and the Chinese government-supported payment card network China UnionPay, among others.

China to further strengthen blockchain adoption with the project

During the internal testing period between October 2019 and March 2020, the BSN network is reportedly set to involve a total of 400 enterprises and 600 developers, Sina reports. First piloted in the city of Hangzhou, the capital of east China’s Zhejiang province, the BSN specifically intends to reduce technical and economic costs associated with developing blockchain adoption, SIC’ deputy director Zhang Xueying said.

As the Chinese government has been gradually strengthening its blockchain adoption and expertise, the establishment of a new national grade blockchain network is apparently an important milestone in its approach. Alongside the active development of blockchain applications, China has been working hard to introduce its own digital currency.

According to a Jan. 6 report by Cointelegraph, development of a government-backed digital currency at the People’s Bank of China is progressing smoothly.