South Korean justice minister said yesterday, that the government is preparing a bill to ban cryptocurrency trading. A press official stated that the proposed ban was announced after “enough discussion” with other government agencies. The fact that there was “enough discussion” is evident of the amount of certainty about the bill within the S.Korean government. It seems to be the case that finance ministry and regulators agree on the proposed ban. Police and tax authorities raided cryptocurrency exchanges for alleged tax evasion. Concerns were raised as there seems to be a “herd” like behavior in the cryptocurrency market of S.Korea, which increases social risks and the increased use of such assets could lead to a surge in crime. In the US crypto-front, media reports suggest that the Senate will have a hearing next month with countries’ top markets regulators about the cryptocurrency market, amid concerns of a possible bubble and the risks posed to the financial system from cryptocurrencies.
Bitcoin dropped during today’s Asian morning reflecting the news, and broke the 14,000 support level and reached as low as 12383 USD. We see the case for the cryptocurrency to recover somewhat and then continue to trade in a sideways manner. Should the bulls take the driver’s seat we could see bitcoin prices breaking the 14000 resistance barrier and head towards the 15580 resistance level. On the other hand should the bears have the upper hand, the cryptocurrency could break the 12000 support level and aim for the 10500 support barrier.
Media reports suggest that the British are more pessimistic about the economic consequences of Brexit but remain firm in their Brexit vote, according to a new poll. The mood described in the poll was somewhat supported, as the British chamber of commerce expects an “underwhelming” economic 2018. According to British Finance minister Hammond, the transition period has priority over ultimate Brexit, a statement which could imply a softer Brexit deal. On the other hand EU’s chief negotiator Barmier stated that EU may regard some British financial regulations as equivalent to EU law, however it would not give financial firms a general “passport” to do business in the EU. On another political front there seems to be little support for Theresa May’s cabinet reshuffling. Even former allies consider it as a “farce”. So, the effort for a fresher image of the UK government may find little support.
Cable dropped somewhat during yesterday’s European morning, and continued to trade in a sideways manner later on and during today’s Asian morning well between the resistance level of 1.3620 and the support level 1.3460. We expect the pair to continue to trade in a sideways manner in the short term. Any fundamental news about the Brexit may influence the pair as well as any surprise readings on today’s UK’s financial data. Should the bulls take control of the pair, it could break the 1.3620 resistance line and aim for the 1.3684 resistance zone. Should the bears take the driver’s seat we expect the pair to break the 1.3460 support level and hover slightly beneath it. It could prove difficult for the pair to decisively head towards the 1.3330 support barrier.
Media reported that the S.Korean government is about to inforce additional countermeasures regarding cryptocurrencies. The measures may include a ban in opening anonymous cryptocurrencies accounts and enable regulatory authorities to shutdown cryptocurrency exchanges. Also, past warnings were reiterated that virtual currencies cannot play a role as actual currency and could result in high losses due to excessive volatility. The new development follows and could be regarded as in line with previous announcements for taxing profits of cryptocurrencies and banning foreigners from trading virtual currency in the country. The news are expected to have a detrimental effect on bitcoin as the stress South Korea’s efforts to regulate cryptocurrencies and again outline the speculative nature of Bitcoin and other cryptocurrencies.
Meanwhile Bitcoin yesterday and during today’s Asian morning, broke the 15580 support level and tested the 14000 support level. We continue to have the opinion that the risks in trading the cryptocurrency are tilted to the downside, especially as it’s price dropped beneath the 100 Moving Average in the four hour chart. Should the bears continue to have the upper hand we expect the cryptocurrency to break the 14000 support level, test the 12960 level and should that be breached head for the 12000 support barrier. Should the bulls take the driver’s seat, bitcoin could break the 15580 resistance level and aim for the 17000 resistance hurdle.