Market Insights

This post is a translation of the weekly cryptocurrency analysis by Crypto Lab, a wholly owned subsidiary of Monex Group (Tokyo, Japan). Monex is the parent of TradeStation Group. 

Summary

• Bitcoin (BTC) continued lower, sliding about 3 percent on the week.
• Next week’s expected rate cut by the U.S. Federal Reserve could reduce demand for cryptocurrencies as an alternate to equities.
• We’re watching support around $9,200 and resistance around $10,900.

Market Trends This Week

This week brought some good news for the blockchain industry, like testing of the Bakkt futures platform, but sentiment remained weak. Government officials expressed concern about Facebook’s (FB) Project Libra. There were also reports of the U.S. Commodities Futures Trading Commission (CFTC) probing the BitMEX exchange.

The heavy onslaught of corporate earnings season also distracted investors from cryptocurrencies.

Topics of the Week

• ALIS and Auction Lab start joint research aimed at development and maintenance of autonomous decentralized communities. (7/19)
• Media Dou announces policies for establishing an e-book distribution platform and reinforcement of hiring. (7/19)
• The G7’s group of finance ministers expressed concerns about cryptocurrencies like FB’s Libra and called for regulations. (7/19)
• Bitcoin Unlimited updates client software and ends support for Bitcoin SV. (7/19)
• The Japan Virtual Currency Exchange Association (JVCEA) submits a request for revision of the tax system for fiscal 2020 to the Financial Services Agency (FSA). (7/19)
• Iran’s central bank was authorized to issue the gold-backed stablecoin Paymon. (7/20)
• Iran legalizes crypto mining. (7/21)
• Japan’s Fisco Cryptocurrency Exchange submits a business-improvement plan to FSA. (7/22)
• BUIDL launches the SHIEDL anti-money laundering (AML) tool for cryptocurrency exchanges. (7/22)
• Mitsui Sumitomo Insurance and two other companies begin development of a distributed-ledger system to for monitoring workers’ compensation claims. (7/22)
• Justin Sun, founder of TRON (TRX) postpones his lunch with billionaire investor Warren Buffett. (7/23)
• Bakkt starts testing its Bitcoin-futures trading platform. (7/22)
• Binance Launchpad announces the seventh edition of “Wink (WIN)” IEO. (7/22)
• The Ethereum wallet MetaMask releases a mobile beta version. (7/23)
• South Korea estimates that almost $2.3 billion have been lost in crimes involving cryptocurrency over the last two years. (7/22)
• Sumitomo Corp. and bitFlyer Blockchain plan to launch a real-estate business using blockchain technology. (7/23)
• The Isou Project adopts Oracle’s (ORCL) blockchain as a distribution base for a regional currency. (7/23)
• Nomura HD invested in Omise, an online payment company, accelerating investment in blockchain. (7/24)
• U.S. Treasury Secretary Steven Mnuchin: “I will personally not be loaded up on Bitcoin in 10 years.” (7/24)
• Japanese exchange Bitpoint provides details on roughly $28 million stolen from its platform earlier this month. (7/24)
• The Japan Virtual Currency Business Association requests a revision to the 2020 tax system. (7/24)
• Japanese companies including Aeon and Kansai demonstrate using blockchain technology for power management in smart buildings. (7/25)

Market Forecast For Next Week

We expect cryptocurrencies to struggle before the Fed’s pivotal July 31 meeting.

Equity-market sentiment is likely to be positive next week as investors look for Jerome Powell to cut interest rates. While this has been partially priced in so far, the impact on blockchain assets isn’t entirely clear. Lower rates may provide some demand for cryptocurrencies, but a bullish move in equities could also hurt sentiment.

There could also be regulatory concerns with the U.S. Senate Banking Committee debating cryptocurrency regulations on July 30.

We’re watching $9,200 as support on BTC and $10.900 as resistance.

Next Week’s Topics

• 7/29: SPOT Conference in Hong Kong
• 7/30: ZCoin (XZC) protocol update scheduled
• 7/30: U.S. Senate Banking Committee hearing on blockchain regulation
• 7/30: IOTA Insights holds quarterly information session.
• 8/2-4: TruffleCon Conference in Redmond, Washington