March has already begun, but it is still worth it to take a look at the summary of the last week of the previous month.
The previous episode of Weekly Update brought you closer some updates about the Binance and a surprising story of CoronaCoin. What interesting happened at the end of the month?
The end of February wasn’t favorable for the Bitcoin. The leading cryptocurrency (according to the market capitalization) noted a significant fall after the fantastic performance in the first weeks of 2020 when it achieved an impressive value above $10,000 for one coin. Now, Bitcoin has retreated to the price of around $8,500.
What may has caused this pullback? It might be explained by the price correction after the latest bull market, reasonable in situations while the value of some asset is quickly rising in a short period. Some people, however, associate the price drop with a further advancing coronavirus outbreak. Nevertheless, this situation isn’t necessarily ominous for Bitcoin. According to Kraken CEO, Alex Saunders, the cryptocurrency industry soon may notice the next, even more intense, bull run.
Central bankers: Blockchain is not needed for digital fiats
An intensified discussion about blockchain and decentralized currencies caused national central banks (like, for example, the Bank of France) to consider a potential utilization of this idea. But apparently, not every country is interested in such an improvement. During a conference in Kyiv, Ukraine, dedicated to the topic of CBDC (central bank digital currencies), the representative of the National Bank of Ukraine stated that previously tested utilization of distributed ledger technology for a fiat e-currency didn’t work in this case.
Similar voices came from representatives of central banks from Canada and the Netherlands. But why such institutions are getting involved in CBDC anyway? According to Jamiel Sheikh, who talked with CoinDesk about this topic, the reason is a fear of private banking, already teased by Libra.
New Zealand and crypto taxes
Last year, New Zealand surprised public opinion with the announced possibility of salary paid in cryptocurrencies. Now, the country is going to improve the tax system to better fit for decentralized assets. As for now, cryptocurrencies are considered as property, which means they follow the rules of standard goods and services tax (GST). In such a situation, every transaction with decentralized assets is subject to a 15% tax, which leads to over-taxation. Proposed changes assume excluding cryptocurrencies from GST tax in some cases, when said decentralized assets works more like currencies or shares.
Crypto-football deal called off
Last week we told you surprising news about the Australian football club, Perth Glory FC, being bought by the London Football Exchange (LFE) – a blockchain-focused project aiming for the tokenization of this sport. An owner of the club, Tony Sage, recently traveled to London to finalize the deal. However, things didn’t go exactly as both sides had planned, and Sage announced that the transaction is called off.
We can’t be sure about the reasons behind this decision, but it might be related to possible illicit connections of LFE. According to the investigation of an Australian radio station, 6PR, LFE CEO Jim Aylward is, in fact, James Abbass Biniaz, previously charged with attempting to defraud the U.K. tax office.
Crypto use against sanctions
The tense situation between the USA and Iran was a hot topic at the beginning of 2020, causing a significant bitcoin price increase. And apparently, the conflict between those two countries is still related with the blockchain industry. Saeed Muhammad, a commander of the Iranian military branch called Islamic Revolutionary Guard Corps, opted for cryptocurrency utilization against the American sanctions.
As we may read on CoinDesk, the news was initially spread through Telegram, which is a very popular tool for communication and sharing information in Iran. It is worth to be noted that similar usage of cryptocurrencies is being used by North Korea.
Jim Parsons explains crypto in Simpsons
And for the end of today’s Weekly Update, we have something more casual. An ultimate crossover happened last week in a beloved animated TV series, Simpsons. In the episode titled “Frinkcoin,” the rules of cryptocurrency world get explained by Jim Parsons, an actor famous for his role as Sheldon Cooper in a “The Big Bang Theory” comedy series. He described the processes, which stand behind decentralized money and distributed ledger technologies.
For the cryptocurrency industry, every “cameo” of Bitcoin in any popular medium is gaining a lot of attention. Some people believe that such situations are taking us closer to more widespread adoption since they are popularizing the idea of blockchain. Will Simpsons episode about crypto will go down in history as the one which has revolutionized the crypto world? I rather doubt it. But it is still a pleasant surprise for blockchain enthusiasts.
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Massive Bearish Divergence Hints At First Major Chainlink Corrective Phase
Chainlink was among the first cryptocurrency to set a new all-time high in 2020, but given its absence during the 2017 peak was facing different circumstances and no overhead resistance. The » Read more
” href=”https://www.newsbtc.com/dictionary/altcoin/” data-wpel-link=”internal”>altcoin was nearly unaffected entirely by the » Read more
” href=”https://www.newsbtc.com/dictionary/bear/” data-wpel-link=”internal”>bear market over the last couple of years, breaking record after record.
However, a massive bearish divergence has formed as the unstoppable cryptocurrency touches an ascending trendline for the third time. Could this be the start of the » Read more
” href=”https://www.newsbtc.com/dictionary/altcoin/” data-wpel-link=”internal”>altcoin’s first extended » Read more
” href=”https://www.newsbtc.com/dictionary/bear/” data-wpel-link=”internal”>bear phase? Or are bulls preparing a much stronger push to finally blast through the long-term trendline?
Chainlink At Risk Of First Major Corrective Phase, According To » Read more
” href=”https://www.newsbtc.com/dictionary/bear/” data-wpel-link=”internal”>Bear Div
In 2017, Bitcoin’s meteoric rise and the explosion of ICOs built on Ethereum put the cryptocurrency asset class on the map. But after a storm of exuberance and parabolic price action, the bubble burst and these assets came crashing down by as much as 90% or more in many cases.
” href=”https://www.newsbtc.com/dictionary/bear/” data-wpel-link=”internal”>bear market. During that time, however, Chainlink made its debut in the crypto space, and its been on an unstoppable uptrend ever since.
The » Read more
” href=”https://www.newsbtc.com/dictionary/altcoin/” data-wpel-link=”internal”>altcoin rose from nearly worthless to over $25 recently at its 2021 peak. Chainlink went from being born during a » Read more
” href=”https://www.newsbtc.com/dictionary/bear/” data-wpel-link=”internal”>bear market, to hitting all-time highs left and right even before a bull market was confirmed.
” href=”https://www.newsbtc.com/dictionary/altcoin/” data-wpel-link=”internal”>altcoin remains near 2021 highs.
— 🌏The EW Guy (@TheEWGuy) January 25, 2021
Bearish Divergence, Or Are Bulls Baiting For The Next Move Up?
The recent push to $25 per token, has resulted in a massive bearish divergence on the weekly Relative Strength Index, spanning across the current peak and the 2020 high of $20, according to one crypto trader.
Coinciding with the bearish technical signal, is a more three-year long trendline that has acted as the top to every major rally. The chart below shows the long-term trendline on the LINKUSDT trading pair on Binance more clearly.
A massive bearish divergence spans across two years of LINKUSDT price action | Source: LINKUSDT on TradingView.com
Bearish divergences appear when price action sets a higher high, but a technical indicator on the same timeframe chart makes a lower low. It often suggests that although prices are reaching new highs, the underlying buying pressure is lower than during the first peak.
The weakness results in bears taking over, and forcing prices lower. Bearish divergences often appear at the top of a trend, but are difficult to act on.
Related Reading | Altcoin Expert: Buy Crypto That Holds Up During Bitcoin Breakdown
Bearish divergences are only confirmed once price action has turned down. The lack of a higher high on a technical indicator could merely be due to the fact the bullish move is only yet just beginning. Taking a position in a long up-trending » Read more
” href=”https://www.newsbtc.com/dictionary/altcoin/” data-wpel-link=”internal”>altcoin due to a bearish divergence could lead to any missing out on any additional legs up that might follow.
Given Chainlink’s long-term momentum, the bearish divergence – if invalidated – could supply the momentum needed for a much stronger push higher.
Featured image from Deposit Photos, Charts from TradingView.com