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) plummeted 15% on the week, breaking important support around $10,000.
• The launch of Bakkt futures met with lackluster trading volumes, possibly hurting sentiment toward blockchain assets.
• BTC now faces resistance at the old support area of $9,000.
• The recent low of $8,000 is the next likely support zone.

Market Trends This Week

BTC finally violated the psychologically important $9,400 level that had held as a floor for the last several weeks. Selling accelerated on Wednesday when it decisively broke support, resulting in a weekly loss of about 15 percent. BTC is now trying to hold the $8,000 level, which now acts as near-term support.

Some traders blamed the selloff on a drop in BTC’s hash rate. (This is the number of calculations the BTC network can process at a time. It is linked to the security, stability and speed of Bitcoin transactions.) Other market participants pointed to the weaker-than-expected launch of Bakkt’s BTC futures.

After showing relative strength last week, major altcoins including Ethereum (ETH) succumbed to the broader selling pressure this week.

This Week’s Topics

• 7-Eleven shoppers in the Philippines will soon be able to buy virtual currencies across 6,000 stores. (9/20)
• In an attempt to avoid severe international sanctions, North Korea is engaged in developing a cryptocurrency. (9/20)
• U.S. Securities and Exchange Commission Chairman Jay Clayton voiced concerns about the lack of regulation in cryptocurrencies at CNBC’s Delivering Alpha conference. (9/20)
• SRE Holdings has conducted a test to see how the blockchain can be useful in the real-estate business. (9/20)
• Coinbase has disclosed that it may add 17 new cryptocurrencies. (9/21)
• Bank of America (BAC) has entered the Marco Polo network, seeking to increase the efficiency of international transactions via blockchain technology. (9/21)
• Binance, the biggest crypto exchange in the world, plans to add over-the-counter (OTC) trading to help add Chinese customers. (9/21)
• Israel-based startup GK8 has unveiled a new cold storage crypto wallet that eliminates many security risks. (9/23)
• The number of online games using blockchain technology is swiftly expanding. (9/23)
• Intercontinental Exchange’s (ICE) Bakkt platform began trading BTC spot futures, although trading was lethargic. (9/23)
• Facebook (FB) divulged the weightings of the different currencies backing its Libra token. The Chinese yuan isn’t in the basket. (9/24)
• People’s Bank of China (PBOC) has rebuffed rumors of a potential upcoming crypto launch. (9/24)
• International Business Machines (IBM) executives said they are pleased to work with FB to advance blockchain technology. (9/24)
• Germany’s second-biggest stock exchange has introduced the country’s first regulated digital asset exchange called the Beelze Stuttgart Digital Exchange (BSDEX) (9/24)
• Monex Group, the parent of TradeStation, declares a dividend in the form of BTC to shareholders. (9/24)
• After Bakkt’s lackluster BTC future’s release, COO Adam Smith told CNN he remains confident about its future. (9/24)
• Cisco Systems (CSCO) and Singularity will collaborate on Artificial General Intelligence (AGI), a type of artificial intelligence (AI) focused on intellectual tasks. (9/24)
• Start-up Matter Labs has raised $2 million in an effort to scale Ethereum’s (ETH) blockchain. (9/25)
• Binance said it’s complied with standards set by the International Organization for Standardization (ISO). (9/25)
• Rakuten, Tencent (TCEHY), and Fidelity have joined together to invest $20 million to advance blockchain technologies. (9/25)
• U.S.-based Securitize received investments from Mitsubishi UFJ, Nomura HD, KDDI to expand the digitization of securities in Japan. (9/24)
• The SEC has begun the process of approving Exchange Traded Funds (ETFs) holding BTC. (9/25)
• A bill passed by the U.S. House of Representatives tasks the Financial Crimes Enforcement Network (FinCEN) with studying how blockchain technology can be used against financial crimes. (9/25)
• Bitflyer adds the ETH/JPY pair. (9/26)
• Bitfinex wins an appeal in New York, allowing the exchange operator to keep Tether information confidential in its ongoing case with state Attorney General Letitia James. (9/26)
• Lender SOFI will debut a new crypto trading platform in October. (9/26)

Next Week’s Forecast

Prospects for the crypto market remain cloudy, even as institutions remain committed to the technology. We’ve seen that with corporate services and exchange rollouts over the last few months.

Although valuations have collapsed in the short term, prices are within normal ranges. BTC has simply pulled back to June levels, when excitement over FB’s Libra pushed the entire crypto universe higher. The recent drops come amid government criticism of the project.

Now that major support at $9,400 is broken, traders are now looking for buyers to defend the $7,500-8,000 area.

One catalyst that could make BTC turn up again is the trend of monetary easing by central banks.

Next Week’s Topics

• 10/2-3: B.tokyo 2019 will be held in Tokyo
• 10/2-4: DELTA Summit 2019 (Malta’s Leading Digital Innovation Summit) to be held