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) dipped below support at $8,000 before rebounding
• Seven major financial companies withdrew from Facebook’s (FB) Libra Project, including Visa (V), MasterCard (MA) and PayPal (PYPL).
• Ripple (XRP) continued to show bullish relative strength against BTC.
• BTC resistance is the recent high of $8,800 while support is at the recent low near $7,500

Market Trends this Week

BTC was firm early in the week after a partial trade agreement between the U.S. and China. A decline in the yen also supported prices. BTC then came under pressure when traders learned that seven major financial companies would withdraw from the Libra Association. It quickly broke under $8,000 before trying to stabilize, and is down 7 percent on the week.

Meanwhile, XRP continued to climb. The altcoin has gained momentum after the announcement of significant investments in the wallet company BRD and the Mexican exchange Bitso.

This Week’s Topics

• The Bank of England presents rules that FB’s Libra cryptocurrency and other digital-payment providers will need to follow. (10/11)
• Major companies including MA, V, eBay (EBAY) and PYPL withdraw from the Libra Association. (10/11)
• Pre-registration has begun for Gaia’s “Crypto Alchemist” strategic action game using blockchain technology. (10/11)
• MakerDAO announces new stablecoins secured by various cryptocurrencies. (10/12)
• The President of the Russian central bank says there is “no obvious need” for a national cryptocurrency at the moment. (10/12)
• Japan’s first Ethereum Developer Conference concludes. (10/12)
• XRP’s Xpring announced an investment of $750,000 in digital-wallet provider BRD to help users store, remit and purchase XRP. (10/12)
• The Lightning Network, once seen as a positive for BTC, has lost momentum as fewer people use it for payments. (10/13)
• The U.S. Securities and Exchange Commission blocks an allegedly unregistered digital token offering by Telegram. (10/11)
• Commodity Futures Trading Commission (CFTC) Chairman Heath Tarbet has recently described Ether (ETH) as a commodity. (10/14)
• Travel-reservation giant Booking.com (BKNG) announced withdrawal from the Libra Association. (10/14)
• Japanese payment companies ACD and QFpay came to an agreement on strategic alliances in a variety of businesses. (10/14)
• Honda Motor (HMC) and BMW have collaborated on a blockchain project to record payment information for expenses like parking and highway tolls. (10/14)
• Indian company InstaDAPP announced in early October that it raised $2.4 million to develop a smart wallet (10/15)
• Cryptocurrency exchange Coinbase announced the development of mobile apps for professional-trading platform users. (10/15)
• U.S. Treasury Secretary Steve Mnuchin speculates that several members of the Libra association likely withdrew because of regulatory concerns. (10/15)
• Libra Association holds a general assembly in Geneva prior to launch. (10/15)
• A G7 working group says that global stablecoins could present challenges to financial regulators. (10/15)
• Ripple invests in the Mexican exchange Bitso. (10/15)
• JR East Japan Startup and CBcloud announced a partnership to develop a seamless logistics business. (10/15)
• Digital asset-management company CoinShares launchs tokens representing digitized gold. (10/15)
• CME (CME) said Bitcoin futures have attracted more interest from institutional investors in the past year. The exchange noted a 61 percent increase in open interest. (10/16)
• Tagomi’s new crypto brokerage service claims to allow institutions to short sell cryptocurrencies more easily. (10/16)
• South Korea plans to use advanced technologies like blockchain for trade finance by 2021. (10/16)
• Libra head David Marcus addresses regulatory concerns. (10/16)
• SBI Security Solutions and NEC announced an alliance to experiment on the use of distributed-ledger technology. (10/16)
• Tokyo-based Kintetsu Group and Mitsubishi Research Institute will release a digital local currency using the blockchain technology next month. (10/16)
• The governor of Sweden’s central bank stressed the importance of Libra, calling its release a “watershed event.” (10/16)
• Technical analysts note that BTC’s break below the $8,000 level could lead to more downside. (10/17)
• Ernst and Young launches a blockchain tool to improve public-fund transparency and accountability. (10/17)
• Some French banking executives have stressed the need for a global standardization of crypto regulations. (10/17)

Next Week’s Market Forecast

Regulatory pressure against Libra has increased around the world recently. Along with high-profile defections like MA and PYPL, that’s weighed on the price of BTC. Investors will be watching to see if BTC can hold the $7,500 level. Prices could see further weakness if bearish news continues to surface about Libra.

From a stock perspective, investors are preparing for third-quarter earnings from many companies in the U.S. and Japan. Cryptocurrency prices may be impacted if these events move equity markets.

Investors should watch the recent high of $8,800 and the recent low near $7,500.

Next Week’s Topics

• 10/21-22: Pantera Blockchain summit in San Francisco
• 10/27-30: Money 20/20 conference in New York