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Regulation, Uniswap controversy and how many use crypto worldwide

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Coming every Sunday, Hodler’s Digest tracks every important crypto news story from the previous week. Essential reading for all Hodlers!

 

Top Stories This Week

 

European Commission unveils digital finance package for crypto and blockchain

The days of murky legal waters and uncertainty for the crypto industry could be coming to an end if the European Commission is to be believed.

A new digital finance package has been unveiled that proposes new legislation on crypto assets in Europe, including “stringent requirements” on companies that issue stablecoins with a circulating value above $5.8 million.

Firms will also have to publish a white paper with mandatory disclosure requirements unless they’re a small project issuing stablecoins with a total value under $1.1 million.

The European Commission says it’s aiming to boost innovation while protecting consumers. But the International Association for Trusted Blockchain Applications has concerns. It fears the proposals could “overburden a young and innovative industry with costly and complex compliance and legal requirements that are disproportionate to the policy objectives it pursues.”

Overall, Europe’s approach is best described as a cautious one. The European Central Bank says there is a real risk of stablecoin runs that could “trigger negative contagion effects on the entire global ecosystem.” And the ECB’s president, Christine Lagarde, has said any digital euro that’s released would only serve as “a complement to, not a substitute for, cash.”

 

Glassnode: Uniswap team may have misled community over team token vesting 

Uniswap’s decentralization has been called into question, with a recent post from Glassnode insinuating that the platform’s developers might have intentionally misled the community over how the team’s allocation of UNI tokens will vest over time.

The platform’s team, investors and advisors have been allocated 40% of all UNI tokens, and although these are meant to be distributed over four years, there’s a lack of a public schedule, and some of these tokens may not be locked.

There’s also concern that the only entity with enough UNI tokens to submit a governance proposal is, er, Binance, “a centralized exchange in direct competition with Uniswap.”

In an interview with Cointelegraph this week, Binance CEO Changpeng Zhao said: “I’m seeing a lot of bubbles in the DeFi space. There are a lot of projects with empty promises and with nothing going on. And many DeFi projects are only hot for two weeks and then they die.

Meanwhile, concerns about congestion on Ethereum are refusing to subside, with leading DeFi protocols racing to implement layer-two scaling solutions as ETH gas fees skyrocket and the network struggles under the demand.

 

MicroStrategy CEO could “liquidate $200 million in Bitcoin on a Saturday”

Michael Saylor caused alarm bells this week when he said the $400 million held in Bitcoin by his business intelligence firm MicroStrategy could be liquidated at any time.

He told Bloomberg that he wouldn’t hesitate to dump MicroStrategy’s 38,250 BTC at a moment’s notice if an alternative asset’s yields were to jump.

“We can liquidate it any day of the week, any hour of the day,” Saylor said. “If I needed to liquidate $200 million of Bitcoin, I believe I could do it on a Saturday.”

That isn’t to suggest that such a whale movement — which would undoubtedly affect Bitcoin’s price — is imminent. “We feel pretty confident that Bitcoin is less risky than holding cash, less risky than holding gold,” he said.

In other Bitcoin news this week, a pseudonymous Bitcoin trader outlined 23 key technical and fundamental factors that could buoy BTC’s medium-term bull case. The data points shared by “Byzantine General” fall into four major themes: a less overheated market, a neutralizing futures market, less leveraged traders and strengthening fundamentals.

Could holding 0.28 BTC put you in the top 1% wealth bracket someday? 

One Bitcoin evangelist caused a stir this week when he said owning a small portion of BTC could lead to significant wealth… if mass global adoption occurs.

The Twitter personality Davincij wrote: “There is only 0.0027 BTC for the current 7 billion people. If you HODL 0.28 BTC, and Bitcoin is the world reserve currency you will be the top 1%. Thus HODLing 1 BTC means you may have 400x more than the average person (worst case).”

It’s worth noting that a lot of things have to go right for this to be possible. Bitcoin’s market cap is currently $197 billion — while gold’s stands at $9 trillion. Meanwhile, the U.S. dollar — the world’s reserve currency — has a circulating supply of $2 trillion.

Then there’s the issue of altcoins. If people invest in other crypto assets, money is diverted away from BTC — making it harder for the asset to reach top billing as the world’s go-to option.

100 million worldwide now use crypto-based assets, Cambridge study says

This next story helps illustrate the Everestian challenge that Bitcoin faces.

A new study by the Cambridge Centre for Alternative Finance recently revealed that 100 million people around the world currently hold Bitcoin and other blockchain-based assets.

This is a 189% increase from 2018 when there were estimated to be 35 million identity-verified crypto users worldwide.

Figures from the third quarter of 2020 also showed there are up to 191 million accounts at crypto exchanges — a number that doesn’t include self-hosted wallets.

Winners and Losers

 

 

At the end of the week, Bitcoin is at $10,747.42, Ether at $355.96 and XRP at $0.24. The total market cap is at $343,405,160,002.

Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are THETA, Hyperion and The Midas Touch Gold. The top three altcoin losers of the week are UMA, Quant and SushiSwap.

For more info on crypto prices, make sure to read Cointelegraph’s market analysis.

 

Most Memorable Quotations

 

“Banning crypto trading would cause India to fall behind other nations that allow it. By lobbying the Indian authorities, industry participants can implement the much-needed crypto regulations in the country.”

Charles Bovaird, Quantum Economics VP

 

“You get in, and you just have to not be the one left holding the bag.”

Dave Portnoy, Barstool Sports founder

 

“I have really high hopes for Ethereum 2.0. For Ethereum 1.0, I underestimated Vitalik. When he was talking to me about the project in 2015, I said, He took too big of a bite to chew. But to my surprise, he proved me wrong. He delivered Ethereum. I think Vitalik’s team and the community are capable of delivering on some really hard technical challenges. And they’re strong innovators.”

Changpeng Zhao, Binance CEO

 

“The longer Bitcoin stays above $10,000, the more bullish Bitcoin is.”

Tone Vays, veteran trader

 

“I’m a believer. I think it’s happening – [adoption] it’s coming. It’s so important for the world, and I want the world to know it, and I want other people in the world to get on board.”

Tim Draper, tech billionaire

 

“8 percent of those with low financial literacy reported they own cryptocurrencies compared with 4 percent of Canadians with high financial literacy.”

Bank of Canada

 

“Bitcoin is better at being gold than gold — and not just incrementally, but by an order of magnitude or 10X better.”

Tyler Winklevoss, Gemini co-founder

Prediction of the Week

 

Bitcoin’s “worst-case scenario” is now $7,000, trader Tone Vays says

Bitcoin hitting $7,000 is now the “worst-case scenario,” Tone Vays believes.

On his podcast, the veteran trader said $9,000 would serve as a very good “buy-the-dip” opportunity.

Vays added that he thinks $9,000 is the “most realistic” outcome should a bearish trend take hold of the Bitcoin markets.

“The longer Bitcoin stays above $10,000, the more bullish Bitcoin is,” he continued. “Consistency on the way up is bullish; consistency on the way down is bearish.”

BTC/USD has maintained $10,000 support this week but has so far failed to reclaim higher levels after its fall from $11,000 several days ago. 

According to Vays, “the sky’s the limit” if Bitcoin reclaims $12,000.

FUD of the Week

 

Most Americans are against a CBDC, survey reveals

A new study suggests that the majority of American citizens are against the introduction of a central bank digital currency.

Of the 400 people who responded to Genesis Mining’s questions, more than 50% were opposed to the proposition that the government should abandon paper money in favor of a digital dollar.

There were some proposing signs in this year’s survey. Close to 25% said they agreed cash should be replaced by a CBDC — twice as many as last year.

The survey was published the same week that Cleveland Federal Reserve President Loretta Mester revealed that the Fed has been undertaking extensive research into the risks and benefits of CBDCs throughout the COVID-19 pandemic.

Major Indian exchange proposes new regulatory framework to avoid crypto ban

One of India’s biggest trading platforms says it has developed a framework to regulate cryptocurrency in the country.

BuyUcoin, which has more than 350,000 users, described the framework as a draft set of community-driven rules, propositions and implementation methods.

The exchange also said that it has the support of “all Indian cryptocurrency stakeholders.”

BuyUcoin CEO and co-founder Shivam Thakral described the framework, which will be presented to the Indian government, as “the first milestone of a long journey for making cryptocurrency accessible to the masses.”

 

Are we dumb? Financial illiterates “twice as likely to own crypto”

People who are more financially literate are likelier to be aware of cryptocurrencies but less likely to own them, according to a report from the Bank of Canada.

While 4% of Canadians with high financial literacy said they possess cryptocurrencies, 8% of those with low financial literacy own digital currencies like Bitcoin.

This report backs up a February 2020 report by the ING’s Think Forward Initiative, which warned:

“A large part of the cryptocurrency market [is compromised] of unsophisticated investors with lower financial literacy skills. These investors are likely to overestimate the reward prospects in cryptocurrencies and underestimate the risk involved in related investment.”

That said, an eToro survey in 2018 suggested that 44% of online investors avoided trading crypto because they felt they lacked the proper education.

 

Best Cointelegraph Features

 

WTF happened in 1971 (and why the f**k it matters so much right now)

In economic terms, 1971 was a big year, and a popular Twitter account has been going viral by explaining why. Cointelegraph Magazine’s Andrew Fenton explores how this has relevance to us all in 2020.

 

The Yearn.finance factor: Key use cases to explain YFI’s high value

YFI has pumped to amazing price heights, totaling at least 4,400% gains inside a two-month span. Is this price action warranted, and does the token have actual value? Two exchanges weigh in in this article written by Benjamin Pirus.

 

Rise of DeFi wars? Uniswap’s UNI token airdrop starts a crypto rivalry

Uniswap’s response to SushiSwap’s vampire mining attack is one of the most important moves in the DeFi space, Anirudh Tiwari says.



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Law Decoded: E Pluribus SHA-256

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New developments at the state level in the U.S. defined this week’s regulatory news.



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Big Bitcoin prediction, OKEx spooks markets, Ripple exec’s big mistake

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Coming every Sunday, Hodler’s Digest tracks every important crypto news story from the previous week. Essential reading for all Hodlers!

 

Top Stories This Week

 

Calm before the storm? Analyst says $20,000 Bitcoin is possible in three months

Bitcoin volatility has fallen to a 16-month low, indicating that a sharp move is on the horizon.

Large fluctuations tend to follow prolonged periods of consolidation, and according to a Bitazu Capital founding partner, Mohit Sorout, BTC could reach its previous all-time high if it was to break out today.

There are other factors at play. The U.S. dollar has been weak recently, and traditionally, this leads to strength across other “safe haven” assets. Bitcoin exchange reserves have also continued to plummet, indicating there’s a shortage of sellers… or a lack of trust in centralized platforms.

Cointelegraph analyst Michaël van de Poppe says BTC must hold $11,000 for October’s rally to continue — paving the way for a retest of $12,000 in the short term. Meanwhile, a report by Stack Funds suggests BTC has support to climb all the way to $15,000 if historic trends repeat themselves this year.

But this optimism isn’t universal. JPMorgan Chase experts believe Bitcoin is slightly overvalued and think the asset could see selling pressure ahead.

 

BTC and OKB plunge after OKEx suspends withdrawals

OKEx, a major crypto exchange, spooked the markets this week by announcing that it had suspended withdrawals.

The company said one of its private key holders was “cooperating with a public security bureau” concerning ongoing “investigations.”

In the immediate aftermath of Friday’s statement, Bitcoin fell nearly 3%, while OKEx’s native token, OKB, crashed 15%.

According to Caixin, OKEx founder Mingxing Xu — also known as Star Xu — was the executive who was questioned by authorities. The Chinese news agency also reported that he was investigated “at least a week ago” and had been absent at work for some time.

Industry executives have expressed surprise at how events unfolded. The Bitcoin Association’s president, Leo Weese, wrote: “That one person sits in China holding the keys to an entire offshore cryptocurrency exchange is probably the most surprising thing about this industry I learned this year. That customers don’t demand transparency about key management comes in at a close second, though.

Armstrong says “silent majority” supports Coinbase apolitical stance in leaked audio

Staff at Coinbase fear that the exchange’s leadership are watching their every move and monitoring their messages, it has been reported.

According to Motherboard, the exchange’s newfound “apolitical” stance has led to allegations of surveillance and censorship, but in a leaked recording of an ask me anything session, CEO Brian Armstrong said the “silent majority” supported the move.

Elsewhere, it was claimed that Coinbase’s management had “stunted internal discussion” and forced employees to delete political Slack messages. The exchange responded to Motherboard’s claims by describing the accusations as “quite extreme and absolutely false.”

During an AMA back in June, Armstrong had reportedly resisted the idea of making a public statement in support of Black Lives Matter following the killing of George Floyd by police. However, he later backtracked and posted a series of tweets in support of BLM.

Coinbase has been hemorrhaging employees of late, with at least 5% of its workforce opting to take an exit package if they were unwilling to avoid political and social issues at work.

 

Following whipsaw launch, Filecoin looks to weeklong conference for stability

It’s been a wild ride for the FIL token following Filecoin’s long-awaited launch.

FIL initially rocketed by 118% before plunging by 80% as the cryptocurrency was listed on major exchanges — three years after the project’s ICO was held.

Now, the blockchain-based data storage platform is hoping to right the ship through a weeklong digital conference that begins on Oct. 19.

“Filecoin Liftoff Week” is going to be centered on education, infrastructure, interoperability, and future plans, with each day focusing on a different theme.

Despite the recent plunge in FIL’s value, the Filecoin team remains optimistic about the project’s future prospects: “This is only the beginning for the Filecoin network.”

 

Ripple’s CTO sold 40,000 Ether for just $1 each

And we end our news roundup with a painful story courtesy of Ripple’s chief technology officer David Schwartz.

He revealed that he and his wife came up with a “derisking plan” for their crypto investments in 2012 — and missed out on millions of dollars in profit as a result.

Schwartz sold 40,000 ETH for $1 each at the time — a stash that would be worth more than $15.5 million at today’s prices.

The Ripple executive also sold a significant sum of BTC for $750 apiece, and a large trove of XRP for $0.10.

He described himself as a “risk averse person with people who depend on me financially and emotionally” but admitted that selling his crypto at this bargain basement prices “hurt.”

 

Winners and Losers

 

Gainers and losers

At the end of the week, Bitcoin is at $11,435.68, Ether at $375.90 and XRP at $0.24. The total market cap is at $359,603,174,619.

Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are ABBC Coin (77.11%), Filecoin (44.49%) and Waves (28.70%). The top three altcoin losers of the week are Arweave (-32.22%), OKB (-23.80%) and Crypto.com Coin (-21.98%).

For more info on crypto prices, make sure to read Cointelegraph’s market analysis

 

Most Memorable Quotations

 

“All your funds and assets are safe. The investigation concerns a certain private key holder’s personal issue only.”

Jay Hao, OKEx CEO

 

“That one person sits in China holding the keys to an entire offshore cryptocurrency exchange is probably the most surprising thing about this industry I learned this year. That customers don’t demand transparency about key management comes in at a close second, though.”

Leo Weese, The Bitcoin Association president

 

“The Chinese government is cracking down on money laundering using cryptocurrency for telecom fraud, and centralized exchanges are in a very dangerous state.”

Colin Wu, crypto reporter

 

“I do believe we’ll be seeing a relatively boring and corrective quarter on the cryptomarkets. In history; $ETH frequently bottoms out in December, to start running the quarter after. $BTC dominance to run up, to have an altseason in Q1 2021. Continuing the patience.”

Michaël van de Poppe, Cointelegraph analyst

 

“You can only try to win the hand with the high hand: gold, silver and Bitcoin. You can’t win playing the low hand unless you’re a sovereign state or a major investment bank, and that’s the game today.”

Max Keiser, broadcaster

 

“We’d like to keep tabs on what other central banks are doing and learn from them, not just from China but from other countries.”

Kazushige Kamiyama, Bank of Japan’s CBDC head

 

“Our eyes are peeled on the $12,000 key resistance level, as we expect further consolidation around current levels going into the elections before breaking into the upside going forward.”

Stack Funds

 

“So if I am to buy the dip, where would the perfect dip be? Well, the perfect dip would be… around $11,000.”

Tone Vays, trader

 

“It’s definitely sending a message to the crypto world that when there are U.S. users of a product or a service, there’s going to be enforcement of U.S. laws.”

“Crypto Mom” Hester Peirce, SEC Commissioner

 

 

Prediction of the Week

Could there be a massive Bitcoin shortage?

Rapid growth of institutional investments in crypto has prompted 10T Holdings co-founder Dan Tapiero to warn that shortages of Bitcoin could be on the horizon.

He warned: “SHORTAGES of Bitcoin possible. Barry’s Grayscale Trust is eating up BTC like there is no tomorrow. If 77% of all newly mined turns into 110%, it’s lights out. Non-miner supply will get held off market in squeeze. Shorts will be dead. Price can go to any number.”

Institutional demand surged rapidly after March when Bitcoin suffered one of its steepest falls in recent history. This indicates that big players see staying power in the world’s biggest cryptocurrency. 

The speculation about a potential supply-side crisis around Bitcoin also coincides with the post-halving cycle. Bitcoin went through its third halving on May 11, and historically, halvings lead to extended bull runs in the two years that follow.

Bitcoin may fall upwards

FUD of the Week

 

G7 will oppose Libra launch until regulations in place

The G7 has warned that it will initially oppose the launch of Facebook’s Libra project.

In a statement that pulled few punches, the Group of Seven wrote: “The G7 continues to maintain that no global stablecoin project should begin operation until it adequately addresses relevant legal, regulatory, and oversight requirements through appropriate design and by adhering to applicable standards.”

The statement was co-authored by central bankers and finance ministers from the United States, Canada, Japan, Germany, France, Italy and the United Kingdom.

The G7 has previously raised concerns over how to ensure digital assets comply with Anti-Money Laundering laws, consumer protection rules and other regulatory matters.

Last October, one of its reports also warned that global stablecoins pose a threat to the global financial system.

G7 issues warning to stablecoins

16 countries join forces to clamp down on money laundering crypto criminals

Europol has announced that 20 individuals suspected of working for the “QQAAZZ” criminal network have been arrested in an operation that spanned 16 countries.

The organization is accused of laundering tens of millions of euros for top cybercriminals since 2016. About 40 homes were searched as part of “Operation 2BaGoldMule,” with arrests made in Australia, the U.S, the U.K, Portugal, Spain, Latvia and Poland.

On the same day, a 40-year-old man was arrested in New Zealand for using cryptocurrency to launder more than $2 million for criminals — as well as by purchasing luxury vehicles including a Lamborghini and Mercedes G63.

And in the U.S, six individuals have been charged for their participation in a conspiracy to “launder millions of dollars of drug proceeds on behalf of foreign cartels.”

 

Deadline for Mt. Gox trustee rehabilitation plan extended again

The trustee of the now-defunct Japanese cryptocurrency exchange Mt. Gox has obtained another approval to extend the deadline for submitting a rehabilitation plan — this time to Dec. 15.

As reported by Cointelegraph, Nobuaki Kobayashi received a number of similar deadline extensions in March 2020 and April 2019.

The Mt. Gox crypto exchange is known for encountering the largest cryptocurrency hack in history. The exchange lost a total of 1.35 million Bitcoin in two hacks in 2011 and 2014.

Despite the hacks happening years ago, Mt. Gox customers have still not received compensation for their stolen funds. 

Kobayashi, a Japanese lawyer who was appointed to oversee the civil reimbursement process, reportedly has 150,000 BTC to repay users, but the refund process has been delayed multiple times since 2019.

 

Best Cointelegraph Features

 

The curious case of Coinbase — Employees driven out by “apolitical” stance

Coinbase’s new “apolitical” culture has led to some employees taking severance packages, as the crypto community reacts with ambivalence.

 

The next big treasure: Corporations buy up Bitcoin as a treasury reserve

The entry of firms like Square, MicroStrategy and Stone Ridge may open the BTC floodgates and provide “confidence for the rest to follow,” writes Andrew Singer.

 

Game theory meets DeFi: Bouncing ideas around tokenomic design

Andrew Fenton talks to Jack Lu about his new DeFi platform Bounce, which has been described as a decentralized version of eBay, Sotheby’s or Christie’s.



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BTC, NEO, XMR, ADA, LINK

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The total crypto market capitalization has recovered from the Sep. 6 lows near $314 billion but it is struggling to sustain above the $350 billion mark, which shows that higher levels continue to attract sellers.

Bitcoin’s (BTC) dominance fell from above 68% in mid-May to about 56% in the first half of this month as DeFi tokens embarked on a strong bull run. 

However, in the past few days, the DeFi assets have witnessed sharp corrections and their volatility has increased. This could possibly shift traders’ attention back to Bitcoin. It’s also possible that Bitcoin’s inability to hold above the $11,000 level could also be negatively weighing on the confidence of altcoin and DeFi-token traders.

Crypto market data daily view. Source: Coin360

Although Bitcoin has been struggling to find momentum, a positive is that the volume of Bitcoin futures trading on Bakkt has been increasing and the exchange whale ratio is near yearly lows. This suggests accumulation by the whales and institutional traders.

Currently, most major cryptocurrencies are not following a general trend as the price action has been mostly coin specific. This has opened up opportunities both on the short side and the long side. Hence, in today’s list, two short ideas have been discussed for the traders who are bearish on the crypto markets.

BTC/USD

The relief rally in Bitcoin is facing stiff resistance near the 50% Fibonacci retracement level of $11,147.60. This shows that the bears have used the current relief rally to initiate short positions.

BTC/USD daily chart

BTC/USD daily chart. Source: TradingView

If the bears can sink the price below the uptrend line and the $10,625 support, it will signal weakness. If the BTC/USD pair sustains below $10,625, it will increase the possibility of a retest of $9,835.

However, if the pair rebounds off the $10,625 support sharply, this will be the first sign that the correction might be over. Trading momentum is likely to pick up after the rally breaks above the downtrend line.

If the price closes (UTC time) above the downtrend line, the possibility of a rally to $12,460 increases. Even though there is resistance at $12,000 it seems likely that it will be crossed.

BTC/USD 4-hour chart

BTC/USD 4-hour chart. Source: TradingView

The pair is currently attempting to rebound off the uptrend line, which suggests that the bulls purchased the dip to this support. The buyers will now make one more attempt to push the price above the $11,147.60 resistance.

If the bounce fizzles out and the bears sink the pair below the uptrend line, a drop to $10,625 could occur. This is an important support for the bulls because selling is likely to intensify if this level breaks down.

If the pair rebounds off $10,625, a few days of range-bound action is possible. The flattening moving average on the 4-hour chart suggests a balance between supply and demand. 

NEO/USD

NEO is currently facing stiff resistance at $25.23, which shows that the bears are aggressively defending this resistance. However, as it is in an uptrend, traders are likely to view the dips as a buying opportunity. 

NEO/USD daily chart

NEO/USD daily chart. Source: TradingView

The immediate support on the downside is at $23 and below that at the 10-day simple moving average ($22.26). If the NEO/USD pair rebounds off either support, it will indicate that the bulls are not waiting for a deeper fall to buy which is a positive sign.

If the bulls can push the price above the $25.23–$25.78923 resistance zone, the uptrend is likely to resume. The next target on the upside is $29.

A break below the 10-day SMA will be the first sign that the momentum is weakening and a drop below $20.9633 will signal a possible change in trend.

NEO/USD 4-hour chart

NEO/USD 4-hour chart. Source: TradingView

The 4-hour chart shows that the bulls pushed the price above the $25.23 resistance twice but they could not sustain the higher levels. This shows that the bears are attempting to stall the rally at this resistance. 

However, on the downside, the bulls have not allowed the price to sustain below $23, which shows that the buyers are accumulating on every minor dip. 

This could keep the pair stuck between $23 and $25.50 for a few more days. The moving averages have flattened out, which suggests a balance between supply and demand. 

XMR/USD

The recovery in Monero (XMR) from the Sep. 5 low of $74.1012 has been strong and the bulls have pushed the price back above the moving averages, which increases the possibility that the correction might be over. 

XMR/USD daily chart

XMR/USD daily chart. Source: TradingView

However, the bears are unlikely to give up without a stiff fight at the $97.4615 resistance. If the XMR/USD pair turns down sharply from the current levels and breaks below $84, a drop to $74.1012 is possible.

Conversely, if the bulls can arrest the next dip at the 20-day exponential moving average ($89), it will increase the possibility of a breakout of $97.4615. Above this resistance, a move to $105.9131–$107.3742 is possible. A break above $107.3742 can result in a rally to $120.  

XMR/USD 4-hour chart

XMR/USD 4-hour chart. Source: TradingView

The 4-hour chart shows that the recovery from $74.1012 has been gradual. Although the bears broke the pair below the 30-EMA on several occasions, they could not capitalize on it and intensify the selling. 

This shows that the bulls are accumulating on dips. Currently, the price has again dipped back below the 30-EMA. If the pair rebounds off the current levels, the bulls will try and drive the price above the overhead resistance at $97.4615.

The short-term momentum is likely to weaken if the bears can break and sustain the price below the immediate support at $87.5629. 

ADA/USD

The relief rally in Cardano (ADA) from the lows of $0.0855982 on Sep. 6 hit a stiff resistance at $0.0997444 on Sep. 13. The moving averages are sloping down, which suggests that the bears are in command.

ADA/USD daily chart

ADA/USD daily chart. Source: TradingView

In a downtrend, the bears short on pullbacks to resistance levels as that improves the risk to reward ratio of the trade. Currently, if the bears can sink the ADA/USD pair below the $0.0855982 support, the decline might resume.

Traders can consider taking positions on the short side with an appropriate stop-loss to benefit from the likely down move. The next support on the downside is at $0.074 but if this support fails to hold, the drop can extend to $0.05. 

This bearish view will be invalidated if the pair rebounds off $0.0855982 and the bulls drive the price above $0.10. Such a move will suggest that the downtrend might be over. 

However, it is not necessary that a new uptrend starts as soon as a downtrend ends because many times, the price remains range-bound as it tries to form a bottom. 

Therefore, traders can step aside and wait for a new bullish setup to form if the price breaks above $0.10.

ADA/USD 4-hour chart

ADA/USD 4-hour chart. Source: TradingView

The 4-hour chart shows that the pair has been gradually declining towards the critical support at $0.0855982 and a close (UTC time) below this level is likely to start the next leg of the down move.

However, if the pair rebounds off $0.0855982, the bulls will make one more attempt to propel the price above $0.10. If they succeed, a quick relief rally is possible.

Conversely, if the price again turns down from $0.10, the pair might remain range-bound for a few days.

LINK/USD

Chainlink (LINK) is in a downtrend and it has been making a lower high and a lower low pattern for the past few days, which shows that the bears are using the relief rallies to sell. 

LINK/USD daily chart

LINK/USD daily chart. Source: TradingView

The down sloping moving averages suggest that the trend favors the bears. If they can sink the LINK/USD pair below $9.65, a drop to $9 is likely. This is an important support to watch out for because a break below this level is likely to resume the downtrend.

The next support on the downside is $7. Therefore, traders can consider benefiting from the possible down-move.

This bearish view will be invalidated if the pair turns up from the current levels or rebounds off sharply from the $9 levels and breaks above the downtrend line. 

LINK/USD 4-hour chart

LINK/USD 4-hour chart. Source: TradingView

On Sep. 5 and 6, the bears were unable to sustain the price below $10.50, which shows that the bulls were attempting to defend this level. 

However, during the current fall, the price has been sustaining below $10.50 for the past two days, which suggests that the buying has dried up.

The moving averages are sloping down gradually and the price is below the averages, which suggests that the advantage is with the bears.

A break above the 30-EMA will be the first sign that the bears are losing their grip. Until then, the path of least resistance is to the downside. 

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, you should conduct your own research when making a decision.



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