The Crypto industry makes progress but still has a long way to go

Cryptocurrencies appreciated in value this week and did not hesitate to extend their rebound on Wednesday as Bitcoin price is now above $7,500 for the first time since June. Rival cryptocurrencies like Ripple, Etherium and Litecoin also followed the positive trend however Bitcoin remains deeply below its all-time high in the previous December. It is very obvious that some positive and productive developments in the finance world have created this bullish movement for cryptos and the advancement it is not by chance nor trend.

According to reports, the CFA institute has added Crypto currencies as a subject in its professional examination and the subject will be studied in depth by the program participants. CFA is a very serious and professional institute and is among the top qualifications in the finance industry. The qualification, which a very small number of people hold on a global scale, is a vast source of knowledge broken down in several modules which all together could be referred to as the finance bible. The qualification is a series of difficult examinations in which the candidate is required to sacrifice greatly and study consistently. Make no mistake, these examinations are very demanding and the person qualified as a Certified Financial Analyst is considered as privileged somewhat. Now, in order for this Institute to add Cryptocurrencies as a study subject, it must mean that this financial instrument has reached a level of significant awareness and it no longer belongs to a so called bubble or scam as portrayed by many. It also means, that future qualified CFA’s most probably could be required to give Cryptocurrency investment advice or perform in depth studies on the topic. It also exemplifies the fact that such an important institute recognizes digital currencies importance and dominance in the financial world. Of course, an opinion on Crypto’s will come solely to the person’s critical thinking and individuality, when it comes to giving advice.
On a separate note, IBM will be partnering with U.S.-based financial services provider Stronghold in order to support a new digital coin called Stronghold USD which will belong to the group of stable coins. Stable coins are digital assets that follow other financial instruments like major Currencies or Metals and imitate their movements. Stronghold USD, will be pegged to the US dollar and clients will deposit in USD in order to purchase the coin. Stronghold USD’s main use will be aimed to help financial company’s fulfill their payments and transactions faster and safer. Foreign exchange matters could also be removed as applications that use block chain and stable coins become more mainstream. Companies like IBM with massive reputation and experience getting involved with cryptos and block chain technology, could be a trick down the sleeve for the industry. It could most certainly remove negative publicity towards digital currencies, and help restore confidence in the near future.

Moreover, we have noticed a strong change of mind towards cryptos lately. More investors are now open towards considering coins. For example, Chief Executive Officer of Blackrock Larry Fink said in an interview with Bloomberg that their firm is currently researching crypto coins. Though, Fink was quick to state that they have not come across investors interested in Bitcoin, the fact that they want to learn more about how the instrument works is the first step to making progress in this industry.

As a conclusion and to keep it completely sincere, we must stress the fact that a lot has to be done so that digital coins become a recognized way of exchange. Even though we are not completely ready yet to let go of our real money and traditional ways of trade, the day when transaction will be done only between the purchaser and the seller, without a third party involved, could be getting closer.

Bitcoin with its latest rally broke two of previous resistance levels now turned to Support $7,120 and $6,700.

Should the digital currency continue its upward movement, it could move towards the $7,690 resistance level and break it aiming for the $8,186 resistance area.

The crypto coin could also remain in a sideways movement between the $7,690 resistance level and the $7,120 Support level.

Should Bitcoin come under selling interest, the coin could drop to the $7,120 Support level and aim for the $6,700 Support barrier. $6,700 has been tested various times in the past and is considered a strong support level.

Cryptocurrencies regulation to support or to tumble prices?

Fundamental Analysis:

Financial market participants and followers associated with Cryptocurrencies, are requesting regulations in order to protect their interests but most importantly to add further transparency to the market.

In Australia and New York State actions have already been taken and now Canada is also getting ready to follow up as the blossoming industry becomes increasingly mainstream. During mid-May, the European Union set an agreement in place for cryptocurrency exchanges to identify users in order to boost bitcoin’s legitimacy and to prevent criminals from taking advantage by moving money around the world. Though, the problem is not resolved as all the continents must synchronize the regulation activities in order to create a global regulation system on Crypto’s. Abusers can choose to use the most appropriate country with low barriers of regulation and carry out criminal or foul activities effortlessly.

Legislation targeting virtual-currency exchanges was introduced back in 2014, though those rules have yet to come into effect. Currently, the issue remains and exchanges that belong to the “money services business” are left unregulated and the people investing money in these industries are seemingly unprotected from many scams and fake websites that are surging the Internet.

Furthermore, the digital coin market could be sensitive to negative comments coming from various acclaimed figures within the global financial community as these could be harmful to the perception of the world regarding the credibility of the digital coin industry.  All these established figures do create volatility speaking in public. In our opinion, investors should be able to create their own views on decisions.

May has been a volatile month for cryptocurrencies, but most notable is the overall downward trend in prices though can also be viewed positively as it creates opportunities.

Investors are seen to believe in the power of block chain, the technology behind Bitcoin and other digital assets. In our opinion, investments could increase as numbers confirm that daily volatility on Crypto’s has increased in 2018 and is forecasted to rise even further.  Blockchain allows people to communicate their transactions more efficiently and more countries are now utilizing it.

As a conclusion, we believe Crypto Currencies are undergoing a difficult period with a lot of criticism against them and subsequently entering a sell off. On the other hand, presently, we are seeing many countries opening crypto currency exchanges indicating that people could be interested in the digital market. However, whether crypto-currencies and the technology that powers them will reshape the financial system remains to be seen, but control from regulatory bodies could help stabilize the crypto currencies aggressive movements and negative outlook.

Technical Analysis:

Crypto’s under surveillance

Media reported that the British FCA said on Friday that firms offering services linked to crypto-currencies would likely require it’s authorization. The regulation also includes a number of derivatives. On the same note, Australia also clamps down on regulation of crypto’s, as all digital currency exchange providers with operations in Australia must register with AUSTRAC as part of the country’s anti money-laundering efforts. On other news mining gets more and more energy consuming and crypto-currency consumers seek cheap energy in Norway and Sweden. Overall, as regulators seem to be on the move the outlook for bitcoin remains negative.

Bitcoin entered a sideways movement in the past few days between the 7425 resistance line and the 5710 support line. Technically, please be advised that Bitcoin has broken the downward trend line incepted since the 5th of March and is currently moving in a sideways manner. We see the case for the crypto-currency to continue to move in a sideways manner currently, however we retain the negative outlook as regulators may intensify efforts to set the crypto-market under control. Should the bulls take the reins we could see the crypto-currency breaking the 7425 resistance line while on the other hand should the bears have the upper hand we could see it breaking the 5710 (S1) support line.