Market Update Oct.16: Tether’s madness and the upcoming regulation

After last week we reported the relative stability in the crypto market, the action was not overdue, and the volatility that characterizes the market has taken its toll.

After a correction on Wall Street, there was also a drop in the currency market, and it appears that the correlation between these markets is positive, compared to the gold market, which rises when they fall.

The dollar pegged Tether again made headlines as its value fell in some exchanges. Tether’s decline has caused a little chaos in the markets as many investors have been stressed out and transferred their Tether holdings to Bitcoin and other cryptocurrencies. In this context, one can take note of the growing trend of companies trying to raise money for the issue of alternative stable currencies competing with Tether.

Liquidity problems in the BitFinex exchange led to price differentials of around $400, and we will soon know the reasons that led to the Tether drama that affected the entire market.

There was a downtrend this week, and it seems that most of them are approaching the floor in terms of technical analysis. It is still not entirely clear whether Bitcoin has reached the bottom.

An average bear market is around 18 months, so it is too early to say that we have passed the wave of declines and caution should be taken when entering the markets. However, one can remain optimistic that the industry is growing up and cleaning the stables.

The size of the crypto market is around $210 billion | Bitcoin’s dominance stands at 54%

Crypto News

market_update_Oct16

South Korean Plastic Surgeon Has Just Bought the World’s Third Largest Crypto Exchange. BK Global Consortium, led by a well-known plastic surgeon from Singapore, Dr. Kim Byung-gun, has acquired crypto exchange Bithumb for W400 billion. The ownership deal is worth around 38% of the popular exchange.

Not just ICOs: The SEC Targets Crypto Airdrops. The regulators have recently clashed with crypto startups once again after imposing fines worth $30,000 on a new project for airdropping tokens to interested investors. SEC says the airdrop is “fraudulent.”

From deposits suspension to today’s mess: All the speculations surrounding Tether and BitFinex. Hong Kong-based crypto exchange BitFinex has been in the spotlight for all the wrong reasons. Including manipulating the price of the stablecoin Tether. Traders on the exchange may have recouped profits when BTC went as high as $7900 on the exchange yesterday.

Fidelity just made it easier for hedge funds and other pros to invest in cryptocurrencies. Fidelity Investments, the fifth largest asset manager in the world, has announced that it will launch a new platform that attracts institutional investors to cryptocurrencies.

Sony Develops Blockchain Solution for Rights Management With Internal Partnerships. The multinational technology company is trying out a new industry with reports emerging that they are developing a blockchain-powered extension of its digital rights management system.

ICO Activity Down 90% Since the Start of 2018. ICOs are no longer raising as much funding as they used to at the start of the year, as a study by Autonomous research revealed that less than $300 million was raised in the whole of September.

Charts

Bitcoin

A volatile week that saw support in the areas of $6,100 followed by a sharp rise to $6700, influenced by recent market events. The resistance appears to be above $6,000, giving confidence to investors. The exchange traded at around $6,438.

BTCUSD

Ethereum

Against the dollar is trading around $210, support is built in this range at $188 and held in the correction that was this week resistance in this range at $250.

BTCUSD

Against Bitcoin trading around 0.031BTC the support holds around 0.03BTC and still trading in this support range as well as the floor we have seen since December seems to have the graph to accumulate a little more time and show stability to the resistance market around 0.037BTC.

ETHBTC

Bitcoin Cash

Against the dollar, the rate is based on support around $430 traded at $470. As of the writing of the update, it is not clear whether this is the floor and we did not see enough trading volume. If we look back, $300 appears in the graph as a table. In this range at $500.

BCHUSD

Against Bitcoin, it traded around 0.069BTC resistance at 0.075BTC support in this range around 0.068BTC a fragile graph technically does not look good, or we are on the floor.

BCHBTC

Populous

Against the dollar trading around $3.44 resistance at $3.80 support at $2.90 seems to be stabilizing recently and volatility has calmed down. Can we go lower from here?

PPTUSD

Against Bitcoin traded around 0.0005BTC not far from the floor we have seen since August around 0.0004BTC it seems that the trade has calmed down and the bull is starting to level resistance in this range at 0.0006BTC.

PPTBTC

Ardor

Against the dollar, a weekly chart traded around $0.11 support around $0.10 holds resistance at $0.14 in this range the peak was at the beginning of the year $2.29 it seems the currency crashed but found a floor and stabilized.

ARDRUSD

Against Bitcoin traded around 1738SAT support around 1500SAT in this resistance range at 2000SAT since July holds volatility has calmed down. Have we reached the bottom?

ARDRBTC

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Bitcoin Price Analysis Oct.16: Where are we after yesterday’s madness?

Some will say it’s “business as usual,” others will say that yesterday is a turning point. Whether to the bullish side (with the breaking of the long-term descending line) or to the bearish side (Tether is likely to cause significant damages to the crypto industry).

What is for sure is that we can’t rely anymore on the BitFinex Bitcoin chart since it’s trading against Tether or USDT. From now on, we will analyze the BitStamp Bitcoin USD chart.

Regarding the pump from yesterday – since it was like a pump and dump movement, it can be seen only as the tail of the 4-hour candle. Of course, the trading volume of that candle was gigantic.

Now what?

  • Bitcoin is testing the long-term descending trend-line, which started somewhere around March this year when Bitcoin’s price was about $11,700. This is a tough resistance area including the 200 and 100 days moving average lines (purple line represents the MA-200, white line represents MA-100).
  • The overall momentum is still bearish. I would start thinking about the market as bullish in a scenario of creating a higher-low and breaking above $6800. Yesterday, the peak reached close at $6756 on BitStamp.
  • From the bearish side – support lies at current levels around $6400 (along with 50 days moving average line around $6350). Next support lies at $6250 and after is $6100.
  • After yesterday’s short squeeze, BitFinex short positions are starting to accumulate again.
  • RSI levels are at their high levels; Market is overbought as of now.

BTC/USD BitStamp 4 Hours chart

BTC Oct16Cryptocurrency charts by TradingView. Technical analysis tools by Coinigy.

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Hong Kong Crypto Trading Should Be Regulated: Claims SFC Chairman (Bitmex effect?)

TL;DR

• Hong Kong SFC chairman, Carlson Tong Ka-Shing claims that regulating cryptocurrency exchanges is better than banning trading.

• Cryptocurrency trading ban would be ineffective since it would only push investors towards overseas markets.

• Hong Kong-based exchanges are required to comply with regulations to ensure investors’ protection.

A new statement was recently given by Hong Kong SFC chairman, Carlson Tong Ka-Shing, in which he claims that crypto trading in Hong Kong should not be banned. Instead, he believes that new regulations are in order, which will tighten security, and protect investors.

The Hong Kong SFC (Securities and Futures Commission) continues to search for new effective methods of

Carlson Tong Ka-Shing. Source: South China Morning Post

regulating crypto operators. While important, the Commission’s goal is made more difficult since they are technically only allowed to regulate securities. Despite this, Tong Ka-Shing says that the SFC will keep an eye on this industry.

He believes that banning cryptocurrency trading in Hong Kong would not solve current problems. Not only is the crypto trading growing more and more popular, but is also an international activity. As such, introducing a trading ban in Hong Kong would force traders to seek out foreign markets.

Tong also claims that crypto trading venues are similar to traditional stock exchanges in a lot of ways. As such, they also require a comparable licensing regime. After the basic framework is enforced, the city would be able to update it and make it compatible with new market developments.

The ban would not work: Regulations are necessary

Over time, the SFC has issued several warnings to cryptocurrency traders in Hong Kong. These warnings addressed the unregulated nature of crypto exchanges, as well as dangers of trading on unregulated platforms. Additionally, they also issued notices to trading platform operators — often a company or a group of individuals — stating that complying with regulations is in everyone’s best interest.

Tong claims that some of these cryptocurrency companies still do not fit the custodian, audit, or even valuation requirements. Not only that, but these platforms also represent a new technology that has yet to be adequately understood by regulators. This is why a regulatory approach needs to be carefully considered. Even so, enforcing regulations is a better option than the alternative, which is a ban on trading.

Imposing a total ban is neither the right approach nor would it work considering that the possibility of trading in overseas markets is efficiently conducted via today’s internet.

While Tong is expected to hand over the reins of the SFC to Tim Lui Tim-Lueng later this week, he still gave one last warning to unregulated exchanges in Hong Kong, claiming that the SFC will continue to observe them.

Soon after Tong gave his statement, the representatives of several Hong Kong-based exchanges responded. One of them was the chief operating officer of BitMEX, Angelina Kwan. Kwan welcomed the idea of regulating cryptocurrency exchanges, believing that regulatory authority can help with shaping the cryptocurrency industry. She also gave an example where exchanges were able to benefit from regulations, mentioning the US introducing regulations which led to futures trading by the CBOT and CME Group.

Bitmex is (still) unregulated

The Hong-Kong based margin trading exchange, BitMEX, is still unregulated. More than that, traders can start trading by signing up with no required KYC process. There is no doubt that regulations will favor the traders that have suffered lots of weird Bitmex incidents over the last year. In the recent known case, Bitmex had planned maintenance, Bitcoin was pumping and raising, and at the moment Bitmex went live again – there was a mass-liquidation event that drove Bitcoin $300 higher. Such as event will likely not happening under regulations.

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