Nees Updates April 01, 2022

1. TA: Bitcoin Breaks Key Support, Why BTC Could Extend Losses:

Bitcoin failed to stay above the $46,000 support against the US Dollar. BTC is sliding and might even test the $43,200 support zone.

* Bitcoin is down over 4% and there was a move below the $46,000 support.

* The price is trading below $45,500 and the 100 hourly simple moving average.

* There was a break below a key breakout pattern with support near $46,800 on the hourly chart of the BTC/USD pair (data feed from Kraken).

* The pair could extend decline and test the $43,200 support zone in the near term.

Bitcoin Price Dips Below Support:

Bitcoin price started a key decline after it struggled to stay above $46,500 and $46,400. BTC declined below the $46,000 support to move into a short-term bearish zone.

There was a clear move below the 50% Fib retracement level of the upward wave from the $44,470 swing low $48,200 high. The bears were able to push the price below the $45,500 support and the 100 hourly simple moving average.

Besides, there was a break below a key breakout pattern with support near $46,800 on the hourly chart of the BTC/USD pair. Bitcoin is now trading below the 76.4% Fib retracement level of the upward wave from the $44,470 swing low $48,200 high.

An immediate support on the downside is near the $44,450 level. The next major support is seen near the $44,000 level. The main support now sits near the $43,320 level. It is near the 1.236 Fib extension level of the upward wave from the $44,470 swing low $48,200 high. A downside break below the $43,320 support zone could send the price to $42,000 in the near term.

Upsides Capped in BTC?
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If bitcoin remains stable above the $44,450 support level, it could attempt an upside correction. An immediate resistance on the upside is near the $45,500 level.

The next major resistance is near the $45,800 level. The key hurdle is now forming near the $46,350 level (the previous breakdown zone), above which the price might rise steadily. In the stated case, it could test the $47,200 level and the 100 hourly simple moving average.

2. Possible Timelines For Bitcoin To Hit $100k: Why CEOs See Bullish Signs:

After bitcoin broke above the $45k resistance level reaching the $48k mark, it has retested the $45k level. Some analysts still expect a rise to above $50k, others have abandoned their bullish approach. Meanwhile, leading CEOs from Pantera Capital and Skybridge Capital remain positive that the coin will reach the $100k mark in a period of one to two years.

Pantera Capital CEO Is ‘Wildly.

In an interview with Yahoo Finance, the CEO of Pantera Capital Dan Morehead commented on Bitcoin’s price action so far in the year. Morehead noted that within the history of Bitcoin cycles, it’s had six previous bear markets that average about 60%, and 2022’s has been 50%.

In his opinion, the bitcoin cycles will begin to moderate thanks to large institutional engagement, and “a 50% bear market is probably all you’re going to get going forward.”

Morehead said he is “wildly bullish right now” because he believes that Bitcoin and the asset classes will decouple, noting that the high correlation that usually happens during periods of stress –similar to 2022’s turmoil– eventually breaks, usually after a 72-days average. “I think stocks and bonds may keep going down potentially for years, whereas blockchain assets can go up.“

Morehead accepted that Pantera Capital failed to predict how fear over the Fed’s rates rising would affect the crypto market, but believes that “in this case, the markets have it wrong, and blockchain will decouple from the other asset classes.”

“If you think about it, with rates rising, that is mathematically negative for bonds. It also has a negative impact for anything else with discounted cash flows like equities or real estate, but blockchain’s totally independent of rates.”

In his forecast, Morehead expects that six months from now bitcoin will be back to the typical 2.5X yearly growth that it’s been doing for 11 years. If so, then in a year Bitcoin could be worth about $100,000 per coin.

Scaramucci Sees a $500k Bitcoin:

Similarly, in an interview with CNBC, the CEO of Skybridge Capital Anthony Scaramucchi predicted again that “Bitcoin will hit $100k in the next two years” based on adoption growth.

Scaramucchi quotes Glassnode claiming that “there’s probably 245 million wallets out there or accounts related to Bitcoin,” while in October-November of 2020 there were about 85 million wallets. The CEO believes the growing adoption turns into people being more confident in the coin.

While Scaramucchi’s predictions from 2021 were not spot on, he accepts that he failed to anticipate the Russo-Ukrainian war and the elongation of COVID, but he sees no reason for Bitcoin not to hit the $100K mark within two years “given the way it’s scaling globally” and its many use cases.

A Bullish Pattern:
Meanwhile, analyst Yuriy Bishko believes that BTC follows a Wyckoff re-accumulation pattern. The Wyckoff market cycle theory is used to predict the market’s direction, and it supports the idea that prices move in a cyclical pattern of four phases: accumulation, markup, distribution, and markdown.

These phases can reflect the investors’ behavior, thus possibly predicting future price movement.

Within the Markup phase price action moves in a long uptrend, and the re-accumulation phase is a sideways range that interrupts Markup with small consolidation patterns. After re-accumulation, prices start to move higher, but the support zone needs to hold strongly.

3. Bitcoin Slides for Second Day as Analyst Warns of Dip Below $45K:

The cryptocurrency slides again after eight straight days of gains.

Bitcoin (BTC) fell for a second day in a row, retreating after its price passed $48,000 earlier this week.
The bitcoin was trading at $45,945 as of press time, down 2.5% on the day. The latest price drop followed an eight-day winning streak that had brought bitcoin to a break-even point for the year, recovering from this year's abysmal start.

* Bullish bitcoin momentum has definitely run out of steam, and the persistent geopolitical risk will likely cap the recent rally,” said Edward Moya, a senior market analyst at Oanda. “Bitcoin seems poised to consolidate here and could be vulnerable to a drop towards the $44,500 level.”

* Although bitcoin adoption is improving and interest is growing, it takes time to drive steady long-term flows, Moya said. “The path higher will be a slower grind higher for bitcoin as many traders will also focus on the other coins that are earlier in their growth stage,” he said.

* According to Jason Deane, chief bitcoin analyst at Quantum Economics, this consolidation is positive for the market because it builds a new base for investors to “make further price discovery.”

* On Tuesday, a unit of MicroStrategy, a software company holds a large amount of bitcoin in its treasury, said it obtained a $205 million loan collateralized by bitcoin.
Luna Foundation Guard (LFG), a nonprofit that supports decentralized networks, also resumed buying bitcoin. It announced a $272 million purchase on Wednesday.

* European Union lawmakers voted Thursday in favor of controversial measures to outlaw anonymous crypto transactions, a move the industry said would stifle innovation and invade privacy.

* The Federal Reserve’s preferred inflation gauge, the personal consumption expenditures price index (PCE), showed annual inflation rose 6.4% in February, the Labor Department's Bureau of Economic Analysis reported Thursday. The February pace was the highest since 1982.

* The S&P 500 was down 0.5% on Thursday. It has been on a four-day winning streak. The fall was likely due to investors’ conservative attitude as they monitor progress in discussions between Russia and Ukraine and mixed U.S. economic data.

* The Wall Street Journal reported that the bond market is suffering its worst quarter in the past 40 years.

• The West Texas Intermediate crude oil price plummeted late Wednesday and was down 5.9% on Thursday. President Joe Biden announced the largest-ever release of oil from the U.S. Strategic Petroleum Reserve to help ease high gas prices at the pump.

4. EU Parliament Passes Controversial Rules Banning Anonymous Crypto Transactions:

The European Union (EU) parliament has today voted in favor of new harsh rules that call for the crackdown of unhosted or non-custodial wallets. This is a big blow for cryptocurrency privacy advocates in Europe.

EU Parliamentarians Vote In Favor Of Anti-Anonymity Rules:

The ECON and LIBE committees on March 31 voted to approve an anti-money laundering and transfer of crypto assets proposal that could have negative implications for crypto-related companies and investors in the European Union.

Although votes on the amendments to the Transfer of Funds Regulation were close, the final draft was overpoweringly approved. 

The new measures will require crypto services providers, such as exchanges, to collect the personal details of individuals who transact over 1,000 euros of crypto using self-hosted wallets before the transfer is allowed. Self-hosted wallets are basically those that are not held by third-party intermediaries, the likes of Trezor, Ledger, and MetaMask.

The vote today comes after heated discussions among lawmakers and members of the crypto industry regarding whether non-custodial wallets should be bound by the know-your-customer (KYC) nightmare that obliges companies to obtain personal information about wallet users.

The next step now is for the new legislation is to go through trilogue talks between representatives of the European Parliament, the European Council, and the European Commission as early as mid-April. This will present a window of opportunity for the controversial legislation to be challenged and revised.

New European Crypto Rules Face Significant Blowback:

Unsurprisingly, the proposed rules have drawn the ire of the crypto community. Brian Armstrong, the CEO of San Francisco-based crypto exchange Coinbase noted that the legislation is “anti-innovation, anti-privacy, and anti-law enforcement.” He added that the proposal essentially treats cryptocurrency differently from fiat currency.

“Imagine if the EU required your bank to report you to the authorities every time you paid your rent merely because the transaction was over 1,000 euros,” Armstrong posited.

Tether and Bitfinex CTO Paolo Ardoino said he was bummed the proposal was passed Thursday, arguing that it “represents a big step back for human rights.” He hopes the final vote on the draft can consider the potential privacy breaches and security risks that could ensue if it’s enacted into law.

Some lawmakers are also opposed to the proposed regulations. Markus Ferber, the economic spokesperson for the European People’s Party (EPP) agrees AML checks in crypto should be taken seriously, but suggested that the new rules are commensurate to an outright ban on self-hosted wallets.

5. Financial Heavyweight Woori to Launch B2B Crypto Wallet Management Platform

South Korea’s Woori Fund Service – a part of the financial business group that also comprises the commercial bank heavyweight Woori Bank – will team up with the domestic crypto exchange GDAC to unveil a business-to-business (B2B) crypto wallet management solution.

South Korean laws governing the crypto sphere are developing fast, and exchanges and wallet providers have been told that they must conduct quarterly financial due diligence audits and maintain asset reserves that match at least 100% of their customers’ holdings on their platforms.

This has necessitated new accounting protocols for the industry, with some platforms experiencing phenomenal growth in customer deposits in short spaces of time – leaving them scrambling to match rapidly changing deposit figures with their own reserves.

6. Bank of Japan official calls for G7 nations to adopt common crypto regulations

The Bank of Japan has warned G7 nations that a common regulatory framework for cryptocurrencies needs to be introduced quickly to discuss digital assets to be used to skirt sanctions.

7. Circle Taps BNY Mellon to Serve as Custodian for USDC Stablecoin Reserves

The Bank of New York Mellon Corporation, popularly known as BNY Mellon, has been selected to serve as the “primary custodian” for the reserve assets behind the USDC stablecoin, a cryptocurrency whose value is directly pegged to the U.S. dollar. Circle, a global crypto finance company, announced in a statement on Thursday.

8. IMF Warns Russia Sanctions Threaten to Undermine US Dollar Dominance

Financial sanctions imposed on Russia over its invasion of Ukraine may result in reduced dominance of the U.S. currency, according to a high-ranking official at the International Monetary Fund (IMF). The confrontation could lead to fragmentation of the world’s current monetary system, the top representative warned.

9. FTX Exchange's Proposal Becomes the Focus of CFTC Chair's Hearing in Congress

Rostin Behnam, the Chairman of the Commodity Futures Trading Commission (CFTC), was at a hearing tagged “The State of the CFTC” with the House Agriculture Committee on Thursday, March 31, and one of the core subjects of discussion was a proposal from FTX Derivatives Exchange. 

Per the proposal, the trading platform requested to float a new means of clearing derivatives without the involvement of the accredited futures commission merchants. Drawing on this, the Chairman of the committee, David Scott (D-GA), pointed out that he is “very concerned” about “a proposal pending at the CFTC by a cryptocurrency exchange that is seeking approval to operate a new and untested system of clearing derivatives trades.”