In the past week, as we had predicted, cryptocurrencies saw major movements, led by litecoin which rose by almost 40%. Bitcoin, ethereum, and ripple, each rose by 24%, 10%, and 6%.

The weekly surge in cryptocurrencies was because of favourably positive news. In the previous weeks, the currencies had faced significant challenges following major negative news from the major trading hubs of South Korea, Japan, and China.

For cryptocurrencies, last week had to be better following positive sentiments from the United States regulators. In a meeting two weeks ago, the top regulators promised new regulations to protect consumers from the cryptocurrencies craze. This was a positive move from the US regulators because, unlike their global peers, they didn’t promise to shut them down. A few days ago, the CFTC released new incentives to protect traders from pump and dump schemes. Under the new guidelines, the agency will pay $100,000 to pump and dump whistleblowers.

At the same time, traders believed that the other regulators would be forced to move from their hardline positions. In fact, last week, a South Korean minister moved from an outright ban to a regulatory based system.

This week, there is a likelihood that the upward momentum on cryptocurrencies will continue. One of the reasons for this is that global market volatility has fallen significantly. Less than two weeks ago, the VIX, which investors use to measure fear was trading above 40. Today, it is below 20. This is an indication that investors and traders are likely to take shift their risk appetite to cryptocurrencies.

With regulators taking a pause on cryptocurrencies, and with the crackdown on illegal exchanges and ICOs ongoing, traders are likely to view these as positive moves. In fact, with the US regulators being positive about the cryptocurrencies, there is a likelihood that Chinese authorities could go back to the drawing board.

As you recall, China banned Initial Coin Offerings (ICOs) and cryptocurrencies exchanges. Early this year, they announced measures to ban bitcoin mining, which is very popular in the country because of low power costs. Therefore, traders expect that the country will be left behind by the United States and move to bring new measures to promote the currencies.

In fact, other countries are starting to move towards blockchain. In Spain, a country not well-known for cryptocurrencies, a major political party is planning to launch a plan to attract miners. The People’s Party, which is the party of the Prime Minister Rajoy is planning to table a bill to make it easy for people to mine bitcoin and issue ICOs.

This week, unless there are major news, there is a likelihood that bitcoin will continue moving up. As shown below, from its lowest three-month level, bitcoin is headed to the 38.2% Fibonacci Retracement level. As shown below, in the past week, the pair has been establishing higher lows and higher highs. As the upward momentum continues, the crypto could reach the 50% retracement level of $12,900, which forms an important support.

Bitcoin - Crypto

The alternative scenario is where the crypto reaches the resistance level of $11,675 and starts moving downwards.


Won't your trader friends like this?
About the Author
Contentworks delivers smart content marketing solutions for the finance and tech sectors and specialise in cryptocurrency and ICO launches. Our team of content strategists, social media marketers and creative operations geeks produce content which attracts potential readers, engages them and then drives them to take the next action. Attract. Engage. Succeed. www.contentworks.agency

Related Posts

Leave a Reply