Driven by Real Demand Bitcoin Hits Resistance but Retail and Speculator Euphoria Is Not Here Yet

Technical obstacles are here with consolidation expected around $51,000 while the possibility of Fed tapering risk has been pushed back has greenback falling and US dollar net longs declining by more than half.

Bitcoin has finally hit $50,000 after three months.

As of writing, the leading cryptocurrency is trading just under $50k, finding resistance at this psychologically important level.

“We’re seeing some very bullish signs here,” said Vijay Ayyar, head of Asia-Pacific with crypto exchange Luno in Singapore. Bitcoin could “test all-time highs again” after pushing past levels that have seen some major challenges.

The rally is now overcoming a confluence of hurdles, including a Fibonacci and Ichimoku cluster between $47k and $48k. Besides $50k being a round number, the 61.8% Fibonacci retracement of the April to June downtrend presents a potential obstacle at $51,000.

“The next major resistance, for now, is at the $50,000 zone,” said Konstantin Anissimov, executive director at CEX.IO crypto exchange.

“Should more buyers dive in to push the price above the $50,000 level, a frenzy may be ushered in to steer the price toward a medium-term target of $55,000.”

Appetite Must Remain Intact

As Bitcoin’s market cap inches closer to $1 trillion, the total cryptocurrency market capitalization is currently at $2.23 trillion, fast approaching the mid-May peak of $2.6 trillion propelled by the gains of AVAX, LUNA, RUNE, AR, SOL, and ADA in the last 30-days.

The latest uptrend is marking the end of a months-long slump after crypto-assets peaked in April and May, driven by profit-taking and China’s crackdown on cryptocurrency mining and leveraged trading.

According to Edward Moya, senior market analyst at OANDA in New York, the fears of capital gains taxation have led some traders to hold cryptocurrency as a long-term investment as well.

“New investors are the key to this latest bitcoin rally, and all signs show they are comfortable with high risk.”

“Bitcoin could see a fast appreciation here and might not hesitate making a run for $60,000 if appetite for risky assets remain intact.”

USD Giving Back Its Gains

Investors are also betting on the prospect of more US stimulus spending that would lead to further gains amidst the growing adoption of cryptocurrency among mainstream financial services firms.

With Dallas Federal Reserve President Robert Kaplan, a well-known hawk, saying he might reconsider the need for an early start to tapering as concerns over the outlook for global growth due to the Delta coronavirus variant, USD slipped on Monday.

The greenback saw some profit-taking after registering its biggest weekly rise in over two months, currently around 93 after climbing to Nov. 2020 levels on Friday.

Last week, US dollar net longs also declined to $1.06 bln, from $3.08 bln in the previous week after the USD positioning was net long for five straight weeks, which came after staying net short for 16-long months.

Markets are expected to experience some volatility in the coming days, with Fed Chair Jerome Powell to speak about the economic outlook at the central bank’s Jackson Hole Aug.26-28 conference.

Tapering Pushed Back

The possibility of Fed tapering risk pushed from Sept. to December has QCP Capital maintaining a bullish bias against the 40k support level in BTC. Also, Governor Lael Brainard’s latest dovish pivot to become Fed chair is “likely to raise enough questions within the FOMC to delay their decision by a quarter.”

Not only is headline regulatory risk exhausted in the near-term, the funding rates in perpetual swaps and premium in the futures is also low and muted, meaning “most of the rally has been driven by demand in physical spot rather than from leveraged speculators.”

With no signs of overheating or overextension, QCP is bullish but not overly so due to GBTC still trading at a discount. In the meantime, consolidation is expected at $51,110.

However, NFTs are drawing the attention of retail and institutions alike. And as retail investors return to the market, another upswing could see crypto prices rallying to new heights.

Given the fact that the last time BTC was at $50k, the Google trends for Bitcoin searches were much higher than what it is right now, “this suggests that retail euphoria hasn’t entered the market yet, and bitcoin has a long way to go in this market cycle,” said Marcus Sotiriou, a sales trader at the UK based digital asset broker GlobalBlock, in a note.

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Author: AnTy

PBOC Planning Technical Pilot Testing of Digital Renminbi (e-CNY) for Cross-Border Payments

The central bank of China and Hong Kong Monetary Authority is now discussing the technical pilot testing of digital renminbi for cross-border payments, said HKMA on Friday. The launch date for e-CNY hasn’t been set yet.

Sharing the recent development in the cross-border payment area, Eddie Yue, the chief executive of Hong Kong’s central banking institution wrote,

“The HKMA and the Digital Currency Institute of People’s Bank of China are discussing the technical pilot testing of using e-CNY, the digital renminbi issued by the PBOC, for making cross-border payments, and are making the corresponding technical preparations.”

He further notes that with renminbi already in use in Hong Kong and e-CNY being the same as cash in circulation, “it will bring even greater convenience to Hong Kong and Mainland tourists.”

This development was shared in HKMA’s article on “A New Trend for Fintech – Cross-border Payment,” where it talks about the share of e-payment in Hong Kong being one of the highest among the world’s developed economies.

While the domestic payment service has become highly digitized, development in cross-border payments is lagging behind globally.

For this, HKMA launched a joint research project with the Bank of Thailand last year to address the various cross-border payment issues by using central bank digital currencies (CBDC) and a blockchain platform. Yue noted,

“The research project has entered its second stage, including exploring specific business applications as well as the operability and scalability of the platform to allow the participation of three or more CBDCs.”

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Author: AnTy

Celo Lab Announces Acquisition Of Summa To Boost The Celo Ecosystem

  • Leading cross-chain architecture firm Summa with the help of its technical expertise in cross-chain architecture will enable easier system communication between Celo and various blockchains.

On the 13th of August 2020, token-funded startup cLab was thrilled to announce the acquisition of the leading blockchain interoperability firm Summa. This is to enable cross-chain bridges between Celo and other various blockchains. Marek Olszewski, the Chief Technology Officer at cLabs, asserted that the new acquisition would help Celo execute the platform’s long term vision.

His counterpart James Prestwich who is the co-founder of Summa, also expressed his excitement working with Celo, saying that over the past two years, they had built the interoperability space from scratch.

cLabs multifaceted engineering team is behind the cross-chain architecture that drives BTC. Summa, which is backed by Polychain Capital, is a significant contributor to the Bitcoin, Ethereum, Zcash, and Cosmos ecosystems. Together, they have a proven track record of innovation in blockchain interoperability as well as extensive knowledge of blockchain architecture.

The addition of Summa’s expertise in interoperability will allow cLabs to bring additional support to the Celo chain, enabling further diversification and decentralization of the Celo Reserve in a fully-permissionless way and improving both the security and user experience of the Celo Platform.

Marek Olszewski, the Chief Technology Officer of cLabs, praised Summa as one of the best teams focused on cross-chain bridges. The latest acquisition of Summa is expected to contribute to the adoption of Celo as the technology is bridged to the broader ecosystem. Through venture capital and token sales, Celo has so far raised 40 million dollars.

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Author: Lujan Odera

CFTC Tech Advisory Meeting Features Possible Fed-backed CBDC Scenarios

The CFTC Technical Advisory Committee (TAC) discussed a Fed-backed digital currency in the latest remote meeting which it held last week. This comes as more jurisdictions move to consider CBDC’s following China’s progress in this space and the COVID-19 pandemic that has since raised the need for digital money.

One of the keynote speakers, Georgetown Law Professor, Chris Brummer, presented some scenarios under which the U.S Fed could issue a CBDC, comparing the solution to that being advocated by stablecoins. Brummer was keen to highlight that not all CBDC’s are created equal hence multiple scenarios for a dollar-backed CBDC.

Dollar-backed CBDC Design Suggestions

In his presentation, Brummer further detailed six CBDC approaches that the Fed could take in developing a digital dollar. Most notably was the decision of whether to create an account or token backed ecosystem. The former is pretty similar to today’s bank accounts, only that into. A token ecosystem, on the other hand, will be less strict since no identification would be required to operate in the network.

Another suggestion was whether to have the CBDC on both retail and wholesale markets or only on the latter. Wholesale markets encompass commercial banks and other large financial institutions, while a retail market refers to the general public.

Brummer noted that this was another angle the Fed should consider before transforming the CBDC niche idea into a reality. He further summarized that the future of CBDC’s could only be dictated by the issuing authority since some central banks could decide to use commercial banks or issue the currency directly.

Greater Value Than Stablecoins

Recent months have seen stablecoins like the USDT gain popularity as stakeholders in the crypto market seek to preserve value while doing other activities such as yield farming. Brummer now says that CBDC’s set out to achieve a similar goal and could have the upper hand since trusted monetary authorities back them. Brummer said,

“Central bank currencies can be seen as trying to provide more certainty and safety, if one will, behind the utility that a traditional stablecoin aspires to achieve.”

While the underlying value compared to stablecoins is clear, Brummer, however, warned that adopting CBDC’s could destabilize the whole financial ecosystem as well. This is because central authorities might overlap the role of financial institutions in onboarding and serving clients, should they choose to roll out something like an account-based CBDC run by the Fed.

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Author: Edwin Munyui

Algorand’s Former Algo Capital CTO Takes Blame For Recent Hot Wallet Hack

Pablo Yabo, the last Chief Technical Officer (CTO) of the investment company Algo Capital has recently affirmed publicly that he takes responsibility for the major security breach that happened to a hot wallet controlled by him.

His cellphone was compromised by cybercriminals and around $2 million Tether (USDT) was stolen from it, as well as Algorand (ALGO) tokens.

Yabo affirmed that the incident made him think about his part in the theft and also about crypto adoption. According to him, the global adoption of cryptos will depend on companies finding versatile ways to use cryptos and to store them safely.

He also noted that the hackers were pretty swift in taking the funds and that they were able to take the money quickly, transferring the money to several accounts, so it would be harder to track it. He took full responsibility for what happened and affirmed that he would cover most of the funds with his own money. The rest will be paid the general partners of the firm.

Soon after the hack, Yabo decided to step down as the CTO. He affirmed that he will work on Rand Labs, for now, a company that develops for Algorand.

Despite all the trouble, the losses of the company were not so big compared to how much money it has. Algo Capital recently raised $200 million USD to create the infrastructure of its blockchain.

The hack obviously impacted the price of the ALGO tokens. The cryptocurrency’s price went down by 14% this week. At the moment, ALGO is the 18th largest crypto by market cap, despite all its losses.

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Author: Silvia A

Bitcoin Network’s Shows Strong Growth Signs; Realized Market Cap, Hashpower and Mining Revenue

Despite price woes, Bitcoin continues to exhibit highly bullish technical fundamentals. This week, Bitcoin network hash rate set a new record, while its share of the overall cryptocurrency market cap rose above 70% for the first time since mid-March 2017.

A crypto trader, Crypto Michael, at the Amsterdam Stock Exchange, recently remarked that the 21-week exponential moving average acted as support throughout the last bull market after BTC tested it January 2016. Indeed, as he depicts in his chart below, Bitcoin had a tendency to fall by 33% to 39% to hit the moving average, then rocket back to fresh all-time highs in the coming weeks.

Regarding Bitcoin’s health Vortex tweeted:

As miners become accumulators the demand-side plays a vital role to determine the operations’ overall profitability. In the absence of demand, miners would need to force-sell their bitcoins at a lower rate. The move would bring the prices down, overall. That also means that miners will shut down their mining rigs, which means a drop in hash-rate.

The latest drop below $10,000 is one of many that have occurred over the past 30 days, with Bitcoin hovering around this threshold since mid-August. In fact, this will potentially be the fifth time that BTC will test the critical support level at about $9,300 which is a level that has proven resilient since mid-June.

REgarding the same, former Wall Street investor Travis Kling says:

“The increasingly erratic U.S. president is yelling at an irresponsible central bank to act even more irresponsibly with its monetary policy, while running a $1 trillion deficit for the second year in a row… Central banks and governments are proving the profound need [for Bitcoin].”

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Author: Sritanshu Sinha

Tron’s Marcus Zhao Touches on New Anonymous Transactions Being Finalized on TRX Network

Trons-Marcus-Zhao-Anonymous-Transactions-Are-Almost-Finished

Marcus Zhao, the technical director of the Public Chain Division of Tron (TRX), has gone to Twitter in order to announce that the anonymous transactions are near from being complete in the Tron network.

According to him, the next step was to improve the testnet until they are able to launch the changes on the mainnet of the system. He asked for feedback from the users, too, and provided a link that could be used if they wanted to help out in testing the network. This way, the users can see the changes by themselves before they are implemented for good.

The Reaction

Most of the people on Twitter were very excited about the news. However, they were far from being the only voices who had opinions about how Tron should deal with the upgrade.

A user named @vcorem, for instance, affirmed that this was simply too much work in order to improve a feature such as this one. They first created the virtual machine, then implemented the ZK-Snarks protocol on it and then decided to emulate the UTXO model to make these transactions. So much work for something that is not really that much unique, in his opinion.

Opinions on this were divided as there were other users who had a much more positive view of the system. Some affirmed that such a system would be very useful and that other ecosystems are already doing it, so there is a trend towards anonymity

The fact is that this kind of transaction is really getting popular. There are several old-school tokens using it today such as Monero (XMR) or Zcash (ZEC), but many other projects involving anonymity are being created today. Litecoin, for instance, is also set to start an anonymous option for its users.

Unfortunately, authorities from all over the world frown upon anonymous tokens as they believe that they can be used for crimes. It seems that a battle between the believers in a world with anonymous transactions are going to have to face this problem before they are able to reach their goals and see more private tokens.

At the time of this report, Tron is trading 4.3% up today (and 7.2% up this week) and it is priced at $0.0295 USD per token with a market cap of 1.97 billion UD, being the 10th largest cryptocurrency in the world.

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Author: Gabriel Machado