The new week started with the same old fights and the US Securities and Exchange Commission continuing its battle against crypto-trading funds that lack enough transparency. The SEC announced it will temporarily prohibit trading for US investors in the Bitcoin Tracker One and Ether Tracker One (listed on the NASDAQ/OMX exchange in Stockholm), a financial instrument known as Exchange Traded Notes, which is very similar to ETFs (Exchange traded funds). The regulator pointed the “lack of current, consistent and accurate information concerning Bitcoin Tracker One and Ether Tracker One” as the main reason.
One day later a federal judge has ruled that U.S. securities laws may cover an initial coin offering, handing the government a legal victory over an ICO. According to him the government can proceed with a case alleging that an initial coin offering is a security for purposes of federal criminal law.
We also saw some good news though.
First it was the European Commission Vice-President Valdis Dombrovskis who said at an informal meeting of the (Ecofin) that after additional review of the crypto-assets, EU’s finance ministers think “crypto-assets are here to stay” and “despite the recent turbulence, this market continues to grow.” He also noted that ICOs could emerge as a viable form of alternative financing, but there are still risks for investment protection due to lack of transparency and risks of money laundering, potential fraud or hacking”. The other challenge is the crypto assets categorization and classification. Dombrovskis added that the commission is working with European Supervisory Authorities on a regulatory mapping of crypto assets to answer above questions.
The US banking giant Citigroup is reportedly preparing to launch “Digital Asset Receipt” (DAR) for investing in cryptocurrencies. The bank will use this synthetic financial instrument to enable trading by proxy without direct ownership of the underlying coins, which will be held by a custodian instead.
BTC price, however, remained totally unaffected and it was trading mostly in the $64000-$6200 range on Monday, September 10th with trading volume also staying relatively flat at $4.8 billion. Cryptocurrency market is still in the process of bottoming, so the series of good news had little to no effect maybe just ensuring BTC temporarily hits the breaks.
On Tuesday, September 11th, bulls and bears could not push the price in either direction and once again we saw Bitcoin trading in the lower end of the mid-6000-dollar price level.
Two new stablecoins launched this week with Gemini exchange (owned by the Winklevoss twins) announcing the “Gemini Dollar” (GUSD), a dollar-backed stablecoin, and Blockchain Trust company Paxos issuing the U.S.-dollar backed Paxos Standard. Both coins are built on the Ethereum blockchain and are regulated (and approved) by the New York State Department of Financial Services.
Marketwatch reported on Wednesday, September 12, that Bitcoin futures contracts have been seeing their trading volumes drop. On Monday, September 11, they hit a month low with only 1,965 contracts on the Chicago Mercantile Exchange (CME). Trading volume is down nearly 29% from Friday, September 7, and down about 72.2% from one month ago.
At the same time the total crypto marketcap continues to drop and now stands at $187 billion. The drop amounts to a total of $643 billion that has vanished from the market since its all-time high near $829.96 billion.
The biggest cryptocurrency now stands at $6278, almost flat since yesterday with 24h trading volume of 4.85b versus 4.81 same time yesterday.
Price targets remain the same – escape from the 6200-6600 corridor then $6800 and $7k. Downwards we see 6k as a major support and 5800 as the next possible level to hold.
The most popular altcoin continues to add to its losses without any light in sight. ETH/USD lost $30 of its value since Monday and now sits at $171, down 6.6% for the day and 40% for the last 7 days.
The widely recognized economist Nouriel Roubini stated that the decline in the value of Ethereum was expected due to its lack of active decentralized applications (dApps). According to him it’s no wonder ETH is crashing and 75% of Ethereum-built “DApps are crypto-kitties, scammy Ponzi pyramid schemes & Casino games. The other 25% are DEX that no one uses as 99% of transactions are on centralized exchanges. & 99% of crypto-currencies have already lost 99% of their value.”
As I mentioned in my last report Break and hold below $190-$195 would mean we’re looking at $140-$150 short-term. On the upside traders will need to hold $200 then push above September 2017 low of $220 (possible even $217).
The ripple token was down 7.3$ on Monday when it also breached the $0.27 support. It lost another 2% of its value on Tuesday, but then compensated for the loses on Wednesday and now sits at $0.263, 1.8% up for the day, with 24h trading volume of 314 mill up from 298
XRP/USD will most probably go back above $0.27 as I don’t see it will easily break that support. Next level, however, will be the $0.21-$0.20 support. Upwards it is the $0.30 level.
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