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) had its biggest weekly gain since August as geopolitical risk increased between the U.S. and Iran.
• Next week, BTC options are expected to start trading on the Chicago Mercantile Exchange (CME).

Market Trends This Week

BTC was relatively stable through the holidays, forming a potentially bullish inverted head and shoulders pattern. Buyers then stepped in, and kept purchasing as tensions escalated in the Middle East.

The U.S. killed Iran’s top commander on January 3. Tehran retaliated five days later with a missile attack against American bases. Stocks initially fell but recovered when it was clear that no one was injured. Equities continued to new highs after leaders in both countries backed away from further hostility.

Ripple (XRP) soared early in the week as Binance launched futures contracts on the altcoin. XRP later pulled back after Line’s (LN) Bitmax announced it would no longer handle the cryptocurrency.

This Week’s Topics

• The Korean Revenue Service has levied a tax on crypto exchange Bithumb. (1/5)
• China-based Guangdong rolls out blockchain-based lending platform. (1/7)
• Tokyo-based Decaret plans to launch a crypto app for Android devices. (1/6)
• DeFi lockups (deposits) have exceeded 3 million Ethereum (ETH), according to Defi Pulse Statistics. (1/6)
• Internet giant Baidu (BIDU) launches a blockchain service letting developers and small businesses build Dapps (distributed applications). (1/6)
• “Tokyo Your Coin”, a digital-currency model business promoted by the Tokyo Metropolitan Government, will grant “points” to commuters starting in April. (1/7)
• China-based crypto mining giant Bitmain may slash its workforce before Bitcoin halving, which is expected in May. (1/7)
• LN’s BitBox has announced that it will no longer support XRP. (1/7)
• Banking giant JPMorgan Chase (JPM) is building and e-wallet system for e-commerce transactions. (1/8)
• International Business Machines (IBM) demonstrates a new coffee-bean tracking system at the Consumer Electronics Show (CES). (1/8)
• BTC rose over $8,000 for the first time since last year, but reversed gains. (1/8)
• Initial construction of the world’s largest crypto mining facility in Texas is set to be finished by the end of March 2020. (1/8)
• Binance.US has joined the U.S. Chamber of Digital Commerce to promote “education, advocacy, and industry-wide regulatory development.” (1/8)
• The U.S. Securities and Exchange Commission has prioritized the study of virtual-asset service providers. (1/9)
• Libra Association Vice President Dante Disparte said that BTC is an “exciting asset,” but “not a means of payment.” (1/9)

Next Week’s Market Forecast

BTC’s recent move reminds traders of its potential use as a safe haven. There could also be a return of speculative money to the asset — especially with the North American Bitcoin Conference next week.

CME also rolls out BTC options next week. Bakkt’s launch of a similar service last year had little impact on markets, but CME’s offering is much larger.

Traders will be watching to see whether or not BTC can hold the $7,800 area, a peak from late November.

Next Week’s Topics

• 1/13: CME launches bitcoin option
• 1/15-17: The North American Bitcoin Conference in Miami
• 1/16-17: World Web Forum in Zurich

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