Blockchain

Digital Asset Daily: Uncertainty Abounds

Reduce physical contact. Reduce travel. Don’t attend large gatherings. If you feel sick, stay at home. Wash your hands. These

Published

10 months ago

March 11, 2020

Republished by Plato

Reduce physical contact. Reduce travel. Don’t attend large gatherings. If you feel sick, stay at home. Wash your hands.

These are some of the top advice from experts to reduce the spread of coronavirus. In some places where the affects are particularly rough, a full neighborhood or city might go on total lockdown. The economic impacts of such activities at this point are far from known, as is the severity of the virus itself and how far it might spread. Uncertainty abounds.

The old tools of Quantitative Easing simply isn’t enough to battle the current crisis. Those are tools for the rich, whereas the virus is affecting everyone. Therefore, what’s needed here is something different. Something that will allow poor people who are sick to stay at home. We discussed Hong Kong and helicopter money in an article two weeks ago. More recently, we’ve seen a great example of this from Italy…

This is a huge step int the right direction. Almost makes the last 10 years of stimulus look like an unnecessary free handout.

We’re expecting a huge press conference from the United States later today. However, in a preemptive statement, Treasury Secretary Mnuchin has said not to expect broad stimulative measures.

Coordinated Measures

Not to make light of the situation, but one thing that’s happening as a result of the fast spreading coronavirus is the level of cooperation around the world seems to be increasing. Globalization is toast and many supply chains may see irreparable damage but from a policy point, we might just see something emerge that economists have been calling for over the last decade but have yet to really see, until today.

See, the problem with quantitative easing is that it’s only a temporary solution from the central bank but what’s really needed to make it effective is fiscal stimulus from the government itself. In most cases, politicians are unwilling or unable to take these measures because it means taking on large amounts of debt.

Today in the UK, something unique was seen. The conjunction of monetary and fiscal policy acting in unison to cushion the side-affects of the virus.

For the first time, we’ve seen simultaneous action from a central bank and their government counterpart. The Bank of England announced an emergency rate cut of 0.5%, going from.75% to just 0.25%. A few hours later, the Chancellor of the Exchequer announced a special stimulus package to the tune of £30 billion.

It’s a shame that it took a global pandemic to bring us to this situation, and that by the time we got here the affects will no doubt be dampened by years of unchecked central bank only stimulus, but as far as economic leadership is concerned Great Britain is certainly a stop ahead.

Tomorrow, it will be the ECB’s turn to make their move. Hopes are high in anticipation but Lagarde will really need to pull a rabbit out of a hat in order to please the markets. First off, the Eurozone already has negative interest rates making it a lot more difficult to perform an emergency cut. Second, unlike the UK, the political structure of the EU is quite fractured, making it extremely difficult if not impossible to coordinate such action.

Trading Levels

For anyone asking about bitcoin and the emerging market of digital assets, this just might not be the time to think about it. We can pretty much close the entire case by saying that bitcoin is being swept up by everything that’s happening with traditional markets and being placed in the same speculative basket as the stock markets.

So, we should be looking at the stocks right now to figure out how to trade cryptocurrency. At least until we see a significant decoupling between the two. This might come later on, once we understand more about the economic impact and how long it might take to see some sort of recovery. Or, it could come for other reasons that are yet unknown. There’s too much uncertainty right now to make any type of forward-looking statements.

At this point, I myself am having trouble keeping on top of all the information. Between analyzing the markets, trading the markets, building a business, and raising a family, I’ve been having a lot of fun lately.

Speaking of which, I want to wish a very warm welcome to Pedro Febrero, who joins Quantum Economics as our first Analyst. Please feel free to reach out to Pedro directly on his Twitter or LinkedIn.

Speaking of the markets though, I think the most relevant thing that we need to look for is fresh lows. The S&P 500, for example, has found itself a very logical line of support at exactly 2,700 points. Should this level break, it’s uncertain just how much further south things might go.

For anyone trading these markets, I highly recommend to use the short term charts and consider implementing trailing stops and of course proper money management.

If you found this letter interesting and/or useful, please send over your feedback as many of you already are. If you’re just seeing it for the first time make sure to subscribe so you never miss an episode and always feel free to share on social media and in your chat groups. Have an awesome day!

Best regards,

Mati Greenspan

Analysis, Advisory, Money Management

Post Views: 231

Source: https://www.cryptomorrow.com/2020/03/11/digital-asset-daily-uncertainty-abounds/

Blockchain

European Central Bank’s president calls for greater regulation of bitcoin.

Published

1 hour ago

January 16, 2021

Republished by Plato

According to the Reuters report, the European Central Bank president Christine Lagarde has called for greater regulation of bitcoin and other cryptocurrencies. She linked the use of cryptocurrencies with global criminality and money laundering. ECB chief Lagarde said the digital currency was increasingly being used by criminals worldwide to cover their tracks online and launder money beneath the authorities’ detection. She said criminals are relying on BTC and patchy regulation to move illegitimate money without oversight or supervision.

ECB President calls for more urgency around the global regulation of crypto.

ECB president called for more urgency around the crypto sector’s global regulation and more effort to develop common standards to prevent criminals from abusing digital currencies as a backdoor to money laundering and other nefarious activities. Highlighting the “funny business” going on in BTC markets, Lagarde described cryptocurrency criminality as “totally reprehensible.” “BTC is a highly speculative asset, which has conducted some funny business and some interesting and reprehensible money laundering activity,” she added. Currently, crypto regulations remain in a grey area in most countries, but regulators are catching up gradually.

Crypto regulations begin to tighten up after bitcoin’s massive rally.

The most notable example of crypto regulation has been in anti-money laundering, with exchanges and other crypto services now adhering to standardized AML requirements. The news coincides with a rally in BTC prices in recent months, spurred on by an increasing mainstream interest in BTC tokens. This has led to further calls for regulation worldwide, amid fears that more speculators could end up losing all of their money. Combined with soaring rates of fraud and concerns over money laundering and other criminality running through BTC, Lagarde said the time for light-touch regulation of the digital asset was over.

Source: https://coinnounce.com/european-central-banks-president-calls-for-greater-regulation-of-bitcoin/

Blockchain

Why this on-chain analyst thinks Bitcoin whales aren’t institutions

Published

1 hour ago

January 16, 2021

Republished by Plato

While most had high expectations from the crypto-market for the year 2021, it’s safe to say that the market has well and truly exceeded these expectations. Not only did the world’s largest cryptocurrency, Bitcoin, breach the $40,000-mark, but the industry’s cumulative market cap also went past $1 trillion.

Source: CoinMarketCap

The market and its largest cryptocurrency’s movements make for interesting reading, especially when its charts are observed. In fact, price charts noted an almost vertical movement by Bitcoin, suggesting that this bull run has far outpaced the bull run of 2017.

In such a case, the common perception is that the reason Bitcoin has seen such immense buying power is because a majority of this buying has come from institutions. The same sentiment was highlighted recently by Anchorage Co-founder Diego Monica who, while noting that institutions have more tolerance for volatility and are professional investors, said,

“This rally is absolutely followed and made by the institutions.”

As a result of this, investing in Bitcoin becomes less about following a fad and more about making an allocation to an uncorrelated asset class for purposes relating to capital preservation and appreciation. In fact, many have suggested that at current price levels, Bitcoin might even be too expensive for non-institutional investors to enter the market.

However, on-chain analyst Willy Woo isn’t so sure that this bull run is solely institutionally-driven. On a recent episode of the Unchained podcast, he said,

“We thought it would be, and right now the thing is, I don’t actually think that it is.”

According to Woo, Bitcoin’s bull run is being driven by the institutional narrative of institutions getting behind the idea of Bitcoin and crypto. While institutions have been suggesting that they are going to deploy funds, the majority of them are still yet to do so, he added.

In fact, it may be this validation from institutions that brought in many high net worth investors to this space, with family offices buying in at higher price levels.

Whale spawning season is here. (1000 BTC or more).

Very high net worth individuals are coming in, in droves.

This cycle is unlike any we’ve seen before. pic.twitter.com/ea2Slqq9wH

— Willy Woo (@woonomic) January 14, 2021

Woo explained that a combination of things has contributed to his certainty about family offices making capital allocations towards crypto, including first-hand conversations with people in the space disclosing their intent to do so.

That being said, the main part of such certainty comes from his observation of capital flows on-chain. He explained that the value of withdrawals on exchanges is increasing, which at first glance, seemed to signify that institutions are present. However, a closer examination of clusters of wallet addresses pointed to the fact that a single entity controls multiple addresses.

“It’s not corporation scale where you’re talking tens of thousands of Bitcoin that are being held,” he claimed, adding, “The number of whales holding thousand Bitcoins or more is skyrocketing, and so are the smaller allocations of around 100 and 250.”

Source: https://ambcrypto.com/why-this-on-chain-analyst-thinks-bitcoin-whales-arent-institutions

Blockchain

ETH Price Analysis [WoW]: Ethereum Price Trading at key Pivot, Oscillators Indicate Strong Momentum Despite Overbought Conditions

Published

1 hour ago

January 16, 2021

Republished by Plato

ETH price breaking key weekly resistances and confirming them as support.
Breach of ETH price discovery is to be backed with increasing volume.
Oscillators suggesting strong momentum still present despite overbought conditions.

ETH price is currently trading at a true pivot where a bullish weekly candle close will greatly increase the probability of breaking into price discovery. Price action has been making consecutive higher highs and higher lows since it’s March 2020 Bearish Expansion. The projection remains bullish until proven as this is a strong weekly uptrend.

ETH Price Analysis: Weekly Chart

Preluding to the chart above, a strong uptrend is evident with continuous acceleration leading to a potential parabola. The 21 MA has provided a reliable Dynamic Support that has led to a strong Bullish Volatility Expansion from the lows.

Key Weekly S/R levels have been breached with conviction; price action has confirmed S/R Flip retests along the way with further Bullish Volatility Expansions. ETH price trading in such a volatile range is deemed to have strong swings thus evidently, the volume profile has been increasing.

Volume influxes are a key indication of a strong uptrend as bullish volume follow through is what drives price action. As evident on the chart, there has been a Volume Climax Node. Bearish volume is still below average as the current weekly candle trades open. For further follow through, an influx in volume is required to break the All-Time High with persuasion.

The current shape of the weekly candle is of a Bullish Hammer; however, this is not confirmed until an official close. There has been a strong buy-back from the S/R Flip Retest which is indicative of strength. The next weekly candle open will be deemed telling of the overall direction of the trend.

Now holistically assessing the oscillators, momentum is still intact with the bulls, epically how the stochastics have been behaving.

ETH Price Analysis: Weekly Stochastic oscillator

As evident, each and every bull cross has led to a substantial Bullish Volatility Expansion in price action. The stochastic helps to monitor momentum in the prevailing trend. It can remain trading in overbought regions for an extended period of time, epically in a strong up trend. Ethereum has an immediate Bull Cross coming to fruition, this will be confirmed on the next weekly candle close. Holding true will store momentum for the break of the All-Time-High.

ETH Price Analysis: Weekly Relative Strength Index [RSI]

Furthermore, observing another key oscillator is the RSI that is responsible for measuring the speed and velocity of price action. Preluding to the image above, Ethereum’s RSI is considered to be in overbought regions however back testing swing high. This is considered to be very bullish if respected, breaking down will mean a reversion in price action. As long as the RSI and Stochastics maintain their respective bullish control zones, ETH price will remain very bullish as it comes close to price discovery,

What to Expect for Weekly ETH Price ?

In conclusion, Ethereum price remains quite strong as it is approaching its All-Time High. Price action has been maintaining consecutive higher highs and higher lows. This next weekly candle close will be highly indicative of the overall direction. Both key oscillators are suggesting that the momentum is stored with the bulls. A true break is likely to be backed with increasing volume as price action enters price discovery.

Hope this article helps in the preparation for the next volatility expansion in Ethereum. Follow us at tradingview for more in detail crypto price analysis.

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