Market Insights

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

Summary

• Bitcoin (BTC) broke above $9,000 as the spread of coronavirus weighed on equities.
• BTC support moves up to the $9,000 breakout area, while resistance is around $9,500

Market trends this week

Investors have diversified into cryptocurrencies as coronavirus spreads and volatility increases. BTC’s rally accelerated on Monday, when stocks had their biggest drop of the year. New reports about the virus and deaths emerged, driving BTC above $9,000 level, which many viewed as a key inflection point. That resulted in a gain of about 10 percent for the week.

The Federal Reserve also had a meeting on Wednesday. Policymakers maintained their earlier stance that interest rates will remain unchanged.

This Week’s Topics

• Brokerage firm Huobi will launch its first digital-asset brokerage platform, focusing on institutional and wealthy clients. (1/24)
• The Swiss government has softened the tone toward Facebook’s (FB) Libra project saying, “Switzerland is generally open to projects that seek to reduce the cost of cross-border payment transactions and promote financial inclusion.” (1/24)
• FB executives speaking at the World Economic Forum (WEF) express confidence that Libra can be launched early. (1/24)
• Japan’s Financial Services Agency will provide details on cryptocurrency regulations before the spring. (1/24)
• Japanese Finance Minister Taro Aso said that the potential of a Central Bank Digital Currency “must be considered.” (1/24)
• Interest in blockchain and digital currencies was prevalent at this year’s World Economic Forum as participants watch the People’s Bank of China’s proposed digital currency. (1/25)
• Glassnode reported that the number of addresses holding one or more BTC rose 11 percent to 784,000 in the last year. That suggests accumulation by individual investors. (1/26)
• Ripple reduced XRP sales by 80 percent in the fourth quarter in response to concerns about erroneous trading volume data from exchanges. (1/27)
• Payment-firm Liquid Group has announced a business partnership with blockchain-security firm CertiK. (1/27)
• A report by Deutsche Bank suggests digital currencies could become mainstream in the next two years. (1/27)
• TradeStation Securities lets clients trade options on BTC futures from CME. (1/27)
• The World Economic Forum establishes an international consortium to consider a framework for cryptocurrency regulation. (1/28)
• Bloomberg reports that BTC has developed a positive correlation with gold. That suggests it’s becoming a “safe-haven” asset. (1/28)
• Executives at accounting giant EY encouraged business leaders to increase their use of public-blockchain technology. (1/28)
• Singapore’s Settlement Service Law will take effect on March 28, introducing the first regulations on cryptocurrency firms. (1/28)
• Nomura Research Institute launches a crypto benchmark index for investment planning and analysis. (1/29)

Next Week’s Market Forecast

With new uncertainties from coronavirus, investors are anxious to see whether BTC can exceed $9,500. So far, the disease has caused anxiety and lifted cryptocurrencies. If one uses the 2003 SARS outbreak as a precedent, coronavirus could produce uncertainty for a period of time and potentially keep money flowing into BTC.

Global financial markets are likely to remain volatile as the virus remains a concern. BTC traders will be watching $9,500 for resistance and $9,000 for support.

Next Week’s Topics

• 2/4: Genesis hard fork on BitcoinSV’s (BSV).

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