News Updates July 28, 2022
1. Four factors for Bitcoin’s resurgence.
ByteTree founder Charlie Morris analyzed four factors that can help understand how Bitcoin and cryptocurrencies have responded to the recent declines, and what is still to come.
The factors are on-chain data, technical analysis, investment flows, and macro trends. Technical and fundamental analysis of Bitcoin’s price. The factors that contribute most to the future renaissance of Bitcoin
This analysis shows that it is too late to be cautious, but it is better to be patient. In fact, the network appears absolutely stable, institutional investors have not exited the crypto markets, and macro conditions will improve at some point.
ByteTree founder Charlie Morris analyzed four factors that can help understand how Bitcoin and cryptocurrencies have responded to the recent declines, and what is still to come.
The factors are on-chain data, technical analysis, investment flows, and macro trends.
Summary
Technical and fundamental analysis of Bitcoin’s price Analysis of on-chain data.
Technical price analysis
Presence of institutional investors and macroeconomic environment
Technical and fundamental analysis of Bitcoin’s price
The factors that contribute most to the future renaissance of Bitcoin
This analysis shows that it is too late to be cautious, but it is better to be patient. In fact, the network appears absolutely stable, institutional investors have not exited the crypto markets, and macro conditions will improve at some point.
Prices have stabilized over the past week, with a slight increase in confidence in the markets after the end of the hard sell-off period.
Analysis of on-chain data
With regard to on-chain data, the network has seen only a modest contraction compared to past cycles, despite the collapse in prices, and this should be seen as positive given that some of the value of BTC comes from network activity and effects. There is also no significant decline in large-value transactions, which would suggest that institutional activity has remained high.
Technical price analysis
From a technical analysis perspective, weak trends would be deteriorating, while stronger trends are beginning to emerge and becoming a reality over time. Two of these positive trends are Ethereum’s strength and Bitcoin’s strength against Nasdaq (BitDAQ: BTC vs. NASDAQ).
Presence of institutional investors and macroeconomic environment
In terms of investment flows, capital flows in and out of the market have stabilized. However, the discount of GBTC, i.e., Grayscale‘s fund dedicated to Bitcoin, is extensive.
By contrast, macro conditions suggest positive developments for alternative assets such as cryptocurrencies and commodities, with the US dollar still strong. However, if its high is not what it is now, it should come soon.
2. Bitcoin Rebounds as It Revisits the $24,000 Overhead Resistance.
Bitcoin (BTC) price has recovered above the $20,724 support level after the recent slump. On July 27, the price of the largest cryptocurrency rose to a high of $23,440.
The bulls are retesting resistance at $23,377 before breaking above resistance at $24,000. Since July 19, the uptrend has been slowed down by the overriding resistance of $24,000.
Further upward price action is doubtful as the market has reached the overbought zone. In the last price action, BTC price was bounced at $24,276 as it fell back to the low of $20,724. If Bitcoin breaks above the overriding resistance today, it will be forced to move within a range for a few days. The cryptocurrency will fluctuate between $20,724 and $24,000. However, if the bears break below the $20,000 support, the downtrend will resume and Bitcoin will initially fall to the low of $18,905.
Bitcoin indicator reading
Bitcoin price is at level 57 of the Relative Strength Index of period 14, which indicates that the cryptocurrency is in the bullish trend zone and could rise to the previous highs. The cryptocurrency is above the 70% area of the daily stochastic. This indicates that the market is in a bullish momentum. The 21-day line SMA and the 50-day line SMA are pointing south, indicating a downtrend.
3. US senators call Fidelity’s bitcoin retirement plan “immensely troubling”
Democrat politicians have contacted Fidelity Investments CEO Abigail Johnson demanding to know why the firm would offer an asset as “volatile, illiquid, and speculative” as bitcoin in its 401(k) retirement plans.
In a letter to Johnson on Wednesday, senators Dick Durbin, Tina Smith, and Elizabeth Warren called the decision to allow Fidelity’s users access to the world’s biggest crypto “ill-advised” and “immensely troubling.”
Pointing out bitcoin’s recent crash, the letter addressed the difficulties average Americans experience when trying to save for retirement and said that a 20% investment limit and disclaimers on its website show that Fidelity was well aware of the risks of investing in digital assets.
According to the senators, given that there are so many different ways for Americans to invest in bitcoin, “working families’ retirement accounts are no place to experiment with unregulated asset classes that have yet to demonstrate their value over time.
4. SEC Chair Refused To Meet Crypto Leaders, XRP Lawyer Reveals.
The U.S. Securities and Exchange Commission (SEC) has received heavy criticism from the digital asset industry’s leaders over its regulatory policies. Now, a lawyer has revealed that SEC Chair Gary Gensler refused to meet the crypto companies last year.
SEC Chief prioritized his wealth
John Deaton, founder of Crypto law and lawyer of XRP holders claimed that Gary Gensler refused to meet the 69K XRP holders. However, he also revealed that SEC Chair didn’t even meet with Congress. Instead of meeting key players, Gensler meets around 7 times with a firm that controls 90% of his money.
In a Twitter thread, Deaton disclosed that SEC Chair’s current wealth is being calculated as over $100 million. He added that the commission doesn’t care about appearances of its impropriety.
According to the Crypto Law, records of Gensler’s disclosure from 2020 to 2021 revealed the majority of his money is invested in funds that are managed by the Vanguard Group. Annabel Lee LLC and a Marital Trust are two of his key entities.
5. U.S. Senator Pat Toomey Blames SEC for Crypto Lending Products Fallout.
U.S. senator Pat Toomey recently wrote a letter to Gary Gensler, the chairman of the Securities and Exchange Commission (SEC), concerning the Commission’s approach to regulations governing companies that offer cryptocurrency lending products to customers.
Toomey blamed the SEC for the losses incurred by customers of crypto lenders under the SEC’s purview. He stated that the funds lost by people who invested in crypto lending products offered could have been prevented if the regulator took the necessary action.
SEC’s Lack of Regulatory Clarity Reasons for Losses
In the letter, Toomey pointed out that the SEC’s adoption of the “regulation-by-enforcement” method is a fruitless approach.
Regulation by enforcement is a governing method that allows the SEC to create new rules that have not been publicly announced and then penalize companies that fail to comply with them.
The senator noted that the SEC selectively deciding when to apply its position on when digital assets and services are securities is making it difficult for companies to comply with the regulating body’s laws and has contributed to financial losses by consumers.
Toomey Cites Recent SEC Charges
In the letter, Toomey further made reference to recent SEC charges against a former Coinbase employee and two of his acquaintances. The trio allegedly engaged in an insider trading scheme involving about 25 cryptocurrencies. The SEC claims nine of the tokens were unregistered securities.
Commenting on the case, Toomey said:
“In this circumstance and elsewhere, the SEC ostensibly had a clear opinion on why it thinks these digital assets are securities, yet it did not disclose that view publicly before launching an enforcement action.”
The senator also cited the recent case of Celsius, a crypto lending platform that recently went bankrupt. Toomey noted that the SEC’s failure to act before the event has cost Celsius’ users billions of dollars worth of investment.
6. UK National Crime Agency Seizes $33 Million in Cryptocurrency.
The British National Crime Agency (NCA) has revealed that it has seized £26.894 million ($32.75 million) in cryptocurrency. “Criminals increasingly exploited financial technology and crypto assets” that could harm “the U.K.’s economy and institutions,” said the agency.
NCA Seizes Crypto Worth $33 Million
The British National Crime Agency (NCA) published its annual report 2021-22 this week. The NCA “leads the U.K.’s fight to cut serious and organized crime, protecting the public by targeting and pursuing those criminals who pose the greatest risk to the U.K.,” its website states.
The report details that between April 1, 2021, and March 31, 2022, the NCA seized property worth £59.79 million, stating:
Seized property held by the NCA as at 31 March 2022 consisted of £59.79m … in cash, motor vehicles and other valuables suspected of being derived from criminal activity.
The NCA also revealed that £26.894 million ($32.75 million) in cryptocurrency was among the property seized. In contrast, no cryptocurrency was seized in the year 2020-21. The agency did not specify which cryptocurrencies it seized.
6. Digital Euro Needs Curbs to Halt Lending Crunch, ECB Study Finds
The economic evidence appears to support calls to cap how much central bank digital currency people can hold, to stop them fleeing banks all together, the study suggests.
Europeans would need to have access to a new digital euro capped to prevent significant outflow from conventional banks, according to a study published by the European Central Bank (ECB) on Thursday.
The findings support a suggestion by ECB’s Fabio Panetta that accounts for the central bank digital currency (CBDC) would be limited to 3,000 euros ($3,048) per person, to ensure there’s still enough money in conventional finance to support lending.
Inspired by the success of bitcoin (BTC) and private initiatives, like the now-aborted Facebook-backed libra, many central banks around the world are mulling whether to issue a digital fiat currency alongside banknotes and coins. However, cautious European Union officials want to figure out the impact of CBDCs before they take any final decision.
7. Law Commission of England and Wales Sees Crypto as a New Type of Property
Changing personal property law to cover crypto and NFTs could protect investors against losses through hacks and system failures, the commission says.
The Law Commission of England and Wales – a statutory independent body tasked with reviewing and updating the law – wants to extend property rules to cover crypto and non-fungible tokens (NFT), according to a consultation paper published Thursday.
Aside from legally defining digital assets as personal property, the proposed reforms could make it easier for crypto investors to claim losses in hacks or scams through legal action.
“A lot of people just invest in NFTs, but they don’t ask the question ‘what happens when things go wrong?’” Commercial and Common Law Commissioner Sarah Green told CoinDesk in an interview. “It's not clear at all what happens if you hack into my wallet and take my bitcoin or if ... this system fails and I can't access my bitcoin.”
The seemingly crypto-friendly proposal is aimed, in part, at helping the U.K. government’s goal of turning the country into a global crypto hub, the commission said in a statement. The commission's proposals, however, would not apply in Scotland or Northern Ireland, which have their own legal systems.
Last week financial regulators also proposed rules to Parliament that would recognize stablecoins – which are asset-backed cryptocurrencies – as legal means of payment. More stablecoin regulations are on the horizon, and the government is planning a consultation on crypto as investment assets for the end of the year.
8. Japan’s top crypto lobby groups push for lower taxes to attract talent
The lobbying groups are planning to ask the government to make crypto issuing and holding cheaper to prevent talented individuals from leaving the country.
Japan’s strongest crypto lobbying groups say that current tax rates prevent industry growth and call for lower taxes to prevent talent outflow.
Bloomberg News reported that two of the top lobbying groups, the Japan Cryptoasset Business Association (JCBA) and the Japan Virtual and Crypto assets Exchange Association (JVCEA), are working on a proposal to submit to Japan’s Financial Services Agency (FSA) this week.
Politicians from various parties have been raising the same concerns as well. A member of the ruling Liberal Democratic Party, Masaaki Taira, is one of the most vocal politicians on the matter. He has been expressing and pursuing his colleagues to loosen the regulations to “stem the outflow of digital talent.”
