Bitcoin price this week shocked the crypto world with an over $2,000 collapse from over $12,000 to under $10,000 in just two days flat. Although there’s certainly blood in the streets, and a sharp turn in sentiment toward fear and panic, the cryptocurrency is currently holding an important level.
The fall retraced to a key level that during the last major bull market was never lost. The alternative – potentially losing the line – last led to the Black Thursday plummet. The cryptocurrency is clearly at a crossroads and whatever happens next is especially critical.
Bollinger Bands Weekly Mid-BB Held Strong The Entire Last Bull Market
Crypto analysts rely on several tools as part of technical analysis to predict future price movements, find areas that may act as support or resistance and more.
Some of the best analysts the finance industry has to offer have even created indicators to assist themselves and others with this practice.
Related Reading | Time To Pay Attention: Famed Bollinger Band Creator Comments On Bitcoin
The Bollinger Bands are just one type of technical analysis indicator commonly used throughout crypto and other markets. It helps plot various levels of potential support and resistance and is among the best tools for measuring volatility.
And according to the last Bitcoin bull market, the middle-BB – a 20-session simple moving average – supported the cryptocurrency’s powerful parabolic ascent the entire way up.
BTCUSD Weekly Bollinger Bands 2016 & 2017 Bull Run Comparison | Source: TradingView
Is Bitcoin Holding Strong Here After Such a Collapse An Early Sign Of A Bull Run?
Now, that same key level is holding once again for Bitcoin. Zooming in on BTCUSD weekly charts shows how the middle-BB kept Bitcoin in a bear market all throughout 2018.
Rising through the mid-BB can be a powerful buy or sell signal. The April 2019 rally is a perfect example of this. The rally grew so strong, and was supported by such a surge in buying volume lit ed to Bitcoin “riding the bands” all the way to $14,000.
BTCUSD Weekly Bollinger Bands 2020 Mid-BB Holding Support | Source: TradingView
After that top, Bitcoin has since struggled to hold above the mid-BB, even after repeated trips to the lower Bollinger Band. Black Thursday marked the last touch of the bottom band, taking the crypto asset all the way back to the top band at over $12,000.
From there, the cryptocurrency is now once again testing the weekly mid-BB and thus far holding. The last time, it didn’t, and Bitcoin fell over 50% more. As the April 2019 rally shows a strong close below the mid-BB can lead to an aggressive trend on the other side, so Bitcoin is not out of danger.
Bulls do not want to see any close below the critical line. If it can hold, as the last bull market has shown, it was off to the races and new all-time highs around every turn.
Is that’s what is about to happen if Bitcoin can hold weekly support after such a massive crash?
XRP Lawsuit: On Ex-SEC Chair Jay Clayton’s Sudden U-Turn After Suing Ripple
Ripple’s Boss, Brad Garlinghouse, on Monday, left a few remarks via his Twitter handle on a Wall Street Journal’s post co-written by former US-SEC, chairperson, Jay Clayton.
The post which was co-written by Brent MacIntosh, the former Undersecretary of the US Treasuries for International Affairs, sought to preach the all-to-familiar stance of most crypto companies: ‘Crypto needs regulation, but it doesn’t need new rules.’
Garlinghouse spelled out surprise over Clayton’s turncoat comments that the US government has no concrete and adequate regulatory framework for the crypto industry. He further added:
“Cryptos, like nearly any new innovative technology, can be used for good or bad purposes. The problem is that US companies seeking to be compliant and use this tech for good are left in limbo (or for Ripple, worse!) because of a lack of a clear, predictable framework.”
Jay Clayton, in his last days at the SEC, pulled a shocking stunt on the crypto community, suing Ripple for what it believes is the undocumented sales of large-scale XRP digital assets to unidentified customers.
The bane of the case which was first announced in December last year is in determining if XRP – the digital currency of Ripple – is an investment contract or just another type of asset existing in digital forms. Assets bought and sold do not lie under the jurisdiction of the SEC, but investment contracts (also known as securities) are well within their powers to investigate, using the Howley test as a yardstick.
When compared to Bitcoin and ETH…
XRP, unlike fully decentralized Bitcoin, takes the shape of a centralized digital currency. This is because Bitcoin is still being mined by different people across the world, but Ripple pre-mined billions of XRP coins.
How The Case is turning out
The latest in the seven-month-old lawsuit is a winning streak for Ripple. Judge Sarah Netburn denied the SEC’s plea to examine all records of Ripple’s conversation with lawyers and expert advisers to determine if it knew what class of asset XRP is, and what violations of the SEC’s laws it may have knowingly violated. This signified a sigh of relief for the company which has called the lawsuit a hindrance to its growth and plans to go public.
Clayton further expressed that the foundational frameworks of the US laws suffice to build upon for crypto regulations, but the government has to be careful not to commit under-regulation or over-regulation.
Ethereum Co-Founder Anthony Di Iorio Bets Big on the Future of Cardano and Polkadot
Anthony Di Iorio, a Canadian entrepreneur and the co-founder of leading smart contract platform Ethereum, said that he believes in the potential of Cardano (ADA) and Polkadot (DOT).
In an interview with crypto proponent Anthony Pompliano, Di Iorio, who is also the CEO and founder of Canadian blockchain startup Decentral and crypto wallet Jaxx, revealed that he has a diversified investment portfolio featuring several top projects, including Cardano and Polkadot.
A Big Fan of Cardano and Polkadot
“Now I’ve kind of fallen back to just simplicity. I’m in a number of different projects, but the majority of my stuff is in the top projects. I’m a big fan of Polkadot, I’m a big fan of Cardano.”
Di Iorio went on to narrate why he was so sure of the future of these two projects. He had joined the Ethereum development team earlier in 2012 when he met Vitalik Buterin at a Bitcoin conference.
He has formed strong relationships with other co-founders of Ethereum, including Vitalik Buterin, Cardano’s founder Charles Hoskinson, and Polkadot’s current CEO Gavin Wood.
Di Iorio admitted that while he worked with these men, he knew that they were goal-oriented and would help push these projects further.
“Big fan of Charles, let’s say that. You know, taking some different approaches in the way that they’re doing things, much more on the academic side of what he’s done and bringing stuff forward. Real big fan of Gavin Wood… Knowing those guys from the days back at Ethereum – and knowing their drive and knowing their competitiveness and their smarts – I was able to see those projects for the last few years and know that they were gonna get to where they’ve gotten up to.”
Not Getting Lost in DeFi
Despite all the recent hype about DeFi, Di lorio pointed out that he is keeping his investments simple and investing in larger projects.
“Most of my stuff is in the top few things, Ether, Bitcoin, Cardano, Polkadot. I like Cosmos as well. And there’s a few others, but I’m not getting lost in all the DeFi stuff. I just think there’s not enough time, not enough energy. It’s a full-time gig to be running a lot of that stuff and keeping on top of stuff, so I’ve simplified my life quite a bit over the past few years.”
Featured image courtesy of Business Insider
What you should know if your bank is exposed to Bitcoin
On one hand, El Salvador recently became the first nation to officially declare Bitcoin as its legal tender, and on the other, several nations have recently opined that their indigenous banks face a ‘threat’ from the world’s largest crypto-asset. Nevertheless, the rise in the adoption of cryptocurrencies has been accompanied by regulators taking the fast-growing market seriously.
Banks will now face “the toughest” capital requirements for their holdings in Bitcoin and other crypto-assets under global regulators’ plans to brush off the insecurity offered by the “volatile” crypto-market.
Using money laundering, reputational challenges, and massive price swings as the base of their proposal, the Basel Committee on Banking and Supervision is in the news after it explicitly stated that the banking industry faced “increased risks” and “financial stability concerns” from crypto-assets.
Accordingly, they have now placed Bitcoin in the “highest risk” category. The aforementioned committee comprises a host of nations and global institutions as its members.
The Basel Committee isn’t alone, however, with a Bank of International Settlements exec recently commenting that El Salvador’s Bitcoin policy is an “interesting experiment.”
*BITCOIN PUT IN HIGHEST RISK CATEGORY IN BANK CAPITAL PROPOSAL
— *Walter Bloomberg (@DeItaone) June 10, 2021
What’s more, the panel proposed a 1250% risk weight be applied to a bank’s exposure to Bitcoin and certain other cryptocurrencies. Bloomberg’s estimates highlighted,
“In practice that means a bank may need to hold a dollar in capital for each dollar worth of Bitcoin, based on an 8% minimum capital requirement.”
However, stablecoins and other tokens tied to real-world assets are set for lower capital requirements. The report further highlighted,
“The capital will be sufficient to absorb a full write-off of the crypto asset exposures without exposing depositors and other senior creditors of the banks to a loss.”
The proposal did not specify any specific timeline, and hence, the implementation of these rules can take a couple of years. The proposal is, however, open to public comment before it comes into effect. It should also be noted that the committee said that the initial policies were “likely to change” several times as the market “evolves.”
Even though banks like HSBC have been cautious about stepping into crypto-trading, a few big names, like Standard Chartered Plc have announced their entry into the space.
As for Bitcoin, it fell by over 3.7% in the last 24 hours to trade at $35,418 at press time.
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