The past week has been quite eventful for the crypto-currency market on both sparking new hopes about the crypto-market as well as new disappointments.
The latest headlines sparking hope for the crypto-market could be that an asset manager and a block-chain company plan to launch a security which will be linked to Bitcoin. The novelty is that, if they succeed, they would have created an investment product which would be traded as easily as stocks. Specifically, Van Eck Associates Corp. and SolidX Partners Inc. filed a request to list a Bitcoin-linked ETP to the US Securities and Exchange Commission on Wednesday. The fund is to be physically backed by holding actual bitcoins and is to be insured against loss or theft of the crypto-currency, as stated by the firms. Should the two firms be successful we could be witnessing the trading of crypto’s in another level, approachable maybe by a wider investor base. Such news could support Bitcoin primarily, as the prementioned investment product will be backed by Bitcoins, but could also serve in a wider recognition of the crypto-market.
In another turn of events in Korea, a District Court ruling not to confiscate Bitcoins because they are in the form of electronic files without physical entities, was repealed by the South Korean Supreme court. In its reasoning the Supreme Court stated that Bitcoin is intangible and comes in the form of digitized files, but it is traded on an exchange and can be used to buy goods. Therefore, receiving Bitcoins is an act of taking profits. The importance of the Supreme Court’s ruling centers around two points:
-It sets a precedent,
-It recognizes that digital assets such as crypto-currencies, do have real world value.
However, there are two sides of the ruling. The one which practically assists further to the adoption of Bitcoin, as a new legal recognition took place and the other that digital assets could be seized by courts.
As last, we reserved some comments made by Bank of England Governor Mark Carney. Specifically on the sidelines of the meeting of the G7 finance ministers in Canada, Carney stated that better protection for investors in crypto-currencies such as bitcoin were required and that it would be on the agenda of the regulators meeting. Also it was mentioned that British regulators were working on a report on regulations for crypto’s and that the report is due later this year. Please be advised that Mr. Carney had previously said that crypto’s are a poor alternative to existing central bank payment systems, however the underlying technologies may have valuable applications.
Summing it all up, as time progresses we might see more and more recognition for the crypto market but at the same time more regulation, which is not necessarily a bad idea considering all the scams which have surfaced overtime in the crypto-market. Bitcoin and other crypto’s may depreciate somewhat in the future but their existence seems more certain than before.
Bitcoin seems to be the trend setter for a number of crypto currencies hence we selected it for our technical analysis.
The crypto has been trading in a sideways manner for the past week, with the majority of the prices being between the 7315 support line and the 7690 resistance line. The RSI indicator in the 4 hour chart seems to indicate a rather indecisive market for the past week, remaining near the reading of 50. Overall, we would not share opinions about the bulls being back in the market currently. We could share the view that the current trend is for a sideways movement between the prementioned boundaries and currently see the case for Bitcoin to continue to trade in that manner for the next few days maybe with some bullish tones. For our opinion to change we would require a clear breaking of the prementioned levels.
However should the Bulls take the reins we could see the price of Bitcoin breaking the 7690 resistance level and aiming for the 7890 resistance hurdle.
On the other hand should the bears be in the driver’s seat we could see the crypto driving south breaking the 7315 support line and aim for the 7000 support barrier once more.