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) showed resilience this week, climbing about 5 percent as new reports of coronavirus spread.
• Volatility in crypto markets was tame this week in comparison to some wild fluctuations in global equity markets.

Market Trends This Week

Global equity markets endured roller-coaster price action as fears about coronavirus continued to ratchet up. The price action in crypto was tame, showing a change of character from the high volatility in recent weeks. Relative strength was evident as prices found support and rose slightly on the week.

Several headlines hit the news wires that could move crypto markets in the future. Japan’s Virtual Currency Exchange Association (JVCEA), an official self-regulatory body of crypto exchanges, added U.S.-based crypto exchange Coinbase as a second-class member as the firm prepares to potentially enter the Japanese market. Line (LN) launched BITFRONT, a digital-currency exchange based in the U.S. Crypto startup Tagomi will be the newest member of Facebook’s (FB) Libra Association.

The biggest news of the week came out of India. India’s top court struck down a ban on cryptocurrency trading, ending a nearly two-year legal battle to get virtual currencies reinstated in the country. Despite the flurry of crypto-related news recently, market participants’ short term focus remains the spread of coronavirus.

This Week’s Topics

• Virtual currency broker Tagomi becomes the 22nd member of the Libra Association. (2/28)
• Researchers scramble to find the cause of the shortage of funds in China-based exchange FCoin. (2/28)
• Crypto data-analytics startup Chainalysis remains the largest analytics contractor used by the U.S government to detect fraudulent activity in crypto. (2/28)
• Japanese messaging company LN enters the U.S. market with a new exchange called BITFRONT, which will handle five cryptocurrencies including Bitcoin (BTC)
• The U.S. Bureau of Economic Analysis has submitted a revised benchmark survey for financial-service companies to identify domestic companies involved in cryptocurrencies overseas. (2/29)
• Iranian leaders call for the use of cryptocurrencies to avoid sanctions. (3/1)
• Swiss Stock Exchange will invest in an institutional trading platform to be used as a gateway into cryptocurrencies. (3/1)
• U.S House of Representatives plans hearings to explore the benefits of using blockchain technology for small businesses. (3/2)
• Major mining equipment companies Bitmain and Micro BT announce launch of their latest models ahead of the Bitcoin halving. (3/2)
• Square (SQ) CEO Jack Dorsey announces that revenue from BTC rose 50 percent last quarter. (3/3)
• Coinbase Japan joins JVCEA. (3/2)
• Rakuten announces the launch of a crypto margin-trading service starting this spring. (3/2)
• The Bank for International Settlements (BIS) is working on the tokenization of securities to streamline the settlement cycle. (3/3)
• Singapore-based cryptocurrency exchange Huobi announces the successful deployment of the DEFI network “Huobi Chain”. (3/3)
• Coincheck launches “Tsumitate,” letting customers purchase virtual currency in yen without fees. Coincheck is owned by Monex, the parent of TradeStation Group. (3/3)
• Researchers warn that Bitcoin’s lightning network is becoming more centralized as one-tenth of nodes control 80 percent of the network. (3/4)
• FB considers revising its plan for Libra to receive approval from regulators. (3/4)
• Human resource giant Randstad has launched a test that uses blockchain technology for matching. (3/4)
• The Supreme Court of India strikes down a central bank ban on cryptocurrency trading. (3/4)
• Samsung targets the European payments industry with a blockchain solution for banks. (3/5)

Next Week’s Market Forecast

Crypto investors will watch to see whether demand returns to crypto markets if equity markets become less turbulent. Using 2008 as a precedent, some have speculated that the stock market will fall further, though many differences exist between financial stocks then and the current virus.

BTC’s decline this week stopped around $8,500, a large area of support near the 200-day moving average. Apart from watching volatility in equity markets, traders will also have a keen eye on the upcoming halving in BTC and the hash rate.

The next resistance is around $9,400, while $8,500 is support.

Next Week’s Topics

• 3/10: Digital Asset Summit hosted by CryptoCompare in London.

Note: Equities and Futures accounts are offered by TradeStation Securities, Inc. Crypto accounts are offered by TradeStation Crypto, Inc.

TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. You Can Trade, Inc. is also a wholly owned subsidiary of TradeStation Group, Inc., operating under its own brand and trademarks. When applying for, or purchasing, accounts, subscriptions, products and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.