The recent pros and cons of the Crypto market

The crypto market remains merely unchanged since last week as the pros and cons of the industry news reveal a somewhat stable situation of current uncertainty as to the direction the market will move.

First, FCA short for Britain’s Financial Conduct Authority, reposted its warning to Investors about crypto-currency related investment scams. This warning was first issued back in June, but the issue seems to persist, with the scammers finding new ways to trick investors into cash deposits. Making it more direct, the fraud is now enacted through the use of celebrities’ or well-known individuals which are portrayed in advertisements to be involved in crypto currencies activities. These advertisements provide links to websites for investments either using crypto-currencies or traditional cash. The fraudsters deceive potential clients by stating they operate within the UK providing also London based addresses. All the information is false as the UK authorities would have been able to locate the scammers in no time and so they actually operate outside the UK.

On other news, Nvidia Corp a NASDAQ listed company saw its shares tumbling by 5 percent in after-hours trading during past Thursday after the chip maker revealed that crypto-currency fueled demand had dropped adding its sales could be lower than Wall Street predicted. It must be emphasized that during the previous quarter, the sales to so-called miners of digital currencies such as bitcoin and ethereum was equal to $289 million, approximately 1/10 of Nvidia’s revenue. Nvidia previously had estimated that during the fiscal second quarter ending July 29 sales for crypto-currency chips would reach about $100 million. On the contrary, last Thursday it reported actual income of only $18 million.

On another front, Bitmain Technologies Ltd., a leading producer of crypto-currency mining chips, is scheduling a Hong Kong initial public offering with the potential of raising as much as $3 billion, various sources stated. The firm intends to file a listing application with the Hong Kong stock exchange as early as September. Bitmain Tech Ltd., is valued at $15 billion and is expected to control as much as 80 percent of the market for crypto mining. If the IPO progresses as planned, it would represent a major test of investor appetite for digital-currency companies.

The first self-regulatory organization for crypto-currencies is now reality. This organization aims to promote transparency in the crypto world and various crypto-currency exchanges have already signed to it. The organization is under the name of Virtual Commodity Association, with founders the very popular Winklevoss brothers of Gemini Trust Co. The first members include Bittrex Inc bitFlyer USA, Bitstamp, Inc. and Gemini. It was said that they will make a fresh start in a September meeting with clear objectives, rules and guidelines in order to keep all members on the same page. It could be the case that crypto market makers could be impatient with authorities and our now depending on themselves to improve and set standards for the industry. In our humble opinion, this is good news as the choice to rely on oneself, displays confidence and determination for further improvement.

In addition, it seems authorities are still not convinced with the Crypto backed ETFs and are still stalling up on licenses for operations in the field. However Blockchain capital partner Spencer Bogart stated the authorities are now running out of excuses not to provide licenses. Firms are now monitoring markets better and procedures are better implemented with surveillance systems.

Bitcoin against the US Dollar dropped during Tuesday’s early Asian session displaying a bearish appetite. However corrected upwards later and regained strength making up for losses. It is now moving between our $6,470.67 resistance level and the $6,366.09 support level and is approximately trading higher than last week after today’s correction.

If the crypto-currency is undertaken by a bullish sentiment we could see it break the $6,470.67 resistance level and aim higher for the $6,528.20 resistance barrier.

On the other side, should the digital currency drop lower, it could break the $6,366.09 support level aiming lower for the $6,306.16 support hurdle.

Bitcoin stabilizes after July rally

The digital currency is a non-correlated asset very similar to metals except it’s a lot easier to transport and it can actually be used to purchase items.

In the previous days, we saw US Securities and Exchange Commission reject the bitcoin traded ETF and subsequently dropped the crypto market confidence a bit. A huge wave of news reports was released on the matter, which in our opinion is a waste of time, keeping in mind that Crypto ETFs would most probably return to claim allowance again and ultimately succeed. Very importantly, the private markets regarding digital coin investing is currently massive with huge amounts of money being invested. Bitcoin prices fell as the news was released but held upwards as the coin corrected later on.

We set off to explore some points that could have been questioned by the authorities in order to finally reject the ETF’s license. Until very recently, security among the Crypto market was of high importance and concern. Cyber theft has taken place many times in 2018, especially in Asia which also caused many people to cash out the Crypto industry stating reliability was absent. It could be the case that over half a billion USD worth of Crypto’s has been stolen in the previous years, and even though people are now keeping coins offline, security has not been restored completely .

Second, is the fact that vulnerability of crypto currency markets towards sharp price moves creates uncertainty but also an easy pray for price manipulation.
Third, the anonymity of transactions is one of the key founding principles of Bitcoin that remains a huge barrier within the industry. The absence of transparency on the distributed ledger technology is seen by some industry participants as a limitation to broader acceptance by both institutional and individual investors, but also regulators.

On another front and according to Reuters, IBM and nine financial institutions, including Barclays Plc and Citigroup Inc., are testing a platform to access blockchain-based applications. The platform, will offer services like customer compliance checks, approval and agreement details and collateral management, it was said. Ledger Connect which is the firm offering this platform, aims to promote the use of blockchain-based software to other companies.

On a separate note, according to legend trader and hedge fund owner Bill Miller there are only 17M bitcoin outstanding currently. This event is now causing more and more investors to move into areas with cheap energy costs. Areas in Northern Virginia and Dallas-Fort Worth have been acquired by firms to bring out crypto mining activities. These sites are data centers with huge energy capacities and airtight security and are very similar to rigs in the Oil industry, just these aim for Bitcoins and use megawatts as fuel. Many firms are now joining the crypto mining industry boosting demand for the digital currencies but at the same time could be enacting a huge bull market.
As a conclusion, we would like to stress the opinion that crypto currencies have the potential of becoming all these things that they are not at the moment. We could see digital coins becoming a payment method, we could see them utilized as a real currency but most importantly coins could be accepted by central banks and regulatory bodies as an innovative asset.

During the past and the current week, BTC/USD broke one of our support levels which has now turned to Resistance $8,186. This minor drop was due to the rejection of the Bitcoin traded ETF.

If traders continue to purchase BTC/USD they could force it to move even higher to the $8,186 resistance level and even surpass it aiming for the $8,580 resistance barrier. We support the opinion that, if the digital asset is to move higher, it could do it gradually and not at once as this was the case until now in previous weeks.

On the opposite side, if traders decide to sell the digital coin we could see BTC/USD break the $7,690 Support level and aim for the $7,120 support hurdle.

The other scenario is for the Crypto to remain between the $8,186 resistance level and the $7,690 Support barrier swinging from level to level. This could also be the case due to the fact that the RSI indicator is on the reading of level 50 which indicates a rather uncertain market.