News updates June 03, 2022
1. Bitcoin Attempts Fresh Increase, Why 100 SMA Is The Key
Bitcoin fund support near $29,350 and recovered higher against the US Dollar. BTC must clear the $31,000 resistance and the 100 hourly SMA to continue higher.
*Bitcoin started a recovery wave from the $29,350 zone.
*The price is now trading below the $31,000 level and the 100 hourly simple moving average.
*There is a major bearish trend line forming with resistance near $31,000 on the hourly chart of the BTC/USD pair (data feed from Kraken).
*The pair could resume its decline if there is no clear move above the $31,000 resistance.
*Bitcoin Price Reclaims $30K*
Bitcoin price extended its decline below the $30,000 support zone. However, downsides were limited below the $29,500 level. The price formed a base near $29,350 and started a recovery wave.
There was a move above the $30,000 resistance zone. The price climbed above the 23.6% Fib retracement level of the recent decline from the $32,400 swing high to $29,328 low. It even spiked above the $30,500 resistance zone, but the bears were active near the $31,000 level.
Bitcoin price is now trading below the $31,000 level and the 100 hourly simple moving average. There is also a major bearish trend line forming with resistance near $31,000 on the hourly chart of the BTC/USD pair.
The trend line is close to the 50% Fib retracement level of the recent decline from the $32,400 swing high to $29,328 low. An immediate resistance on the upside is near the $30,800 level. The next major resistance is near the $31,000 and the 100 hourly simple moving average.
A clear move above the $31,000 resistance level could start another increase. In the stated case, the price could rise towards the $32,000 resistance. The next major resistance sits near the $32,400 level.
*Fresh Decline in BTC?*
If bitcoin fails to clear the $31,000 resistance zone, it could start another decline. An immediate support on the downside is near the $30,000 level.
The next major support is near the $29,350 level. A downside break below the $29,350 support may perhaps spark a sharp decline. In the stated case, the price could revisit the $28,250 support zone.
Major Support Levels – $30,000, followed by $29,350.
Major Resistance Levels – $30,800, $31,000 and $32,000.
2. Bitcoin Prices Drop below $30,000, the Lowest since December 2020. Here’s Why?
On 12 May 2022, Bitcoin witnessed a dramatic plunge in which it hit its 24-hour-low of $25,402. After this crash, Bitcoin matched its December 2020 levels, after which it rebounded to just above the $29,000 mark. Even after the rebound, Bitcoin decreased by over 5% in just 24 hours. This was a massive setback after 2021, in which its prices increased by almost 70%. The prices of Bitcoin are down by 39% after its all-time high of $69,000 in November.
Similarly, Ethereum has dropped by 13% in just 24 hours, trading below the $2000 mark. Bitcoin prices have been going up and down (showing more volatility) ever since the Russian invasion of Ukraine began. The rise of inflation, increase in market volatility and uncertainty, and the recent geopolitical tensions have dramatically impacted the price of Bitcoin, even more so than expected. Amidst these geopolitical changes, Bitcoin was thought to be a hedge against inflation. However, it has not fulfilled its promises yet. However, experts still say that Bitcoin may cross $100,000 this year at some point, even after the recent drops.
Other cryptocurrencies have suffered similar losses. The most noteworthy was the stablecoin. In principle, stablecoins are pegged against the value of the US dollar. They are supposed to be a 'safe' crypto asset and protect their investors from the high volatility of cryptocurrencies. The main goal of stablecoins is to maintain their value as their peg, i.e., one US dollar. However, stablecoins have witnessed the most drastic plunges in the last couple of days. Two of the most popular stablecoins are Tether (USDT), USD Coin (USD) and TerraUSD (UST). Terra’s native token LUNA, which was trading at $119.18 in April, is now trading at $0.01, having lost 99% of its value in just 24 hours. On the other hand, UST is currently trading below $0.45.
3. Here’s How Long-Term Bitcoin Holders Are Responding To The Crash.
Long-term holders of Bitcoin are using the token’s latest price crash to build their holdings.
Bitcoin has slumped nearly 36% this year and is currently trading around $29,000- its lowest level since late-2020. The token has now effectively lost all of its gains through 2021- one of its best years ever.
But long-term Bitcoin holders appear to be undeterred by the recent losses. Data shows that they have used the crash as an opportunity to accumulate.
Long-term Bitcoin holders are accumulating
Data from blockchain analytics firm IntoTheBlock shows that long-term holders are using this bear market to increase their tokens. The trend is observed during most bear markets, given that the fall in prices makes Bitcoin far more attractive.
4. Digital Currency Group’s NY Expansion In Doubt After Crypto Mining Ban.
DCG- which owns asset manager Grayscale, is preparing to build its second massive office in Buffalo, New York. However, it seems the plans will be dropped as the New York Senate has passed a bill with a two-year moratorium on new permits for certain power plants involved in crypto mining.
DCG’s Barry Silbert Calls to Prevent Crypto Mining Ban
Digital Currency Group (DCG) claims to be one of the largest employers in New York State, with more than 150 employees in Rochester. Moreover, the company is planning to build a massive office in Buffalo amid growing demand from clients. DCG is the parent company of top crypto firms including Grayscale, Genesis Trading, and Foundry.
Commenting on the impact of the crypto mining ban, Barry Silbert said:
“We’re one of the biggest employers in western NY with 150 employees in Rochester and we’re building a second massive office in Buffalo. This moratorium bill is a job killer and sends a terrible message to crypto entrepreneurs. If this moratorium bill passes, I don’t think we will be.”
5. Bermuda banks on clear regulatory framework to attract more crypto firms.
Amidst the current volatility in the cryptocurrency market, Bermuda is banking on its clarity surrounding digital asset legislation to attract more crypto projects and companies.
Bermuda is one of the few countries in the world that has implemented a complete framework governing cryptocurrencies, according to a report by The Wall Street Journal published on June 3.
Bermudan officials believe that their expertise in international commerce, which accounts for around 27% of the island’s GDP, together with a skilled local workforce, translate into a basis for the creation of a strong digital-assets sector on the island.
In particular, Bermuda’s minister of economy and labor, Jason Hayward, said:
“We are aware of the recent devaluation in the price of cryptocurrencies and remain confident that it does not threaten the island’s ability to become a crypto hub.”
6. Central African Republic announces plan to tokenize country's minerals.
The Central African Republic (CAR) revealed the next step in its bitcoin adoption journey with plans to tokenize access to its natural resources, according to a statement released on Thursday.
The presidential news release said the CAR government will offer tokenized access to mineral resources to crypto and digital asset projects that establish a presence in the country. The natural resource tokenization drive will come under the auspices of Project Sango.
The government announced Project Sango in May, after passing a law recognizing bitcoin as legal tender the previous month. CAR is the first African nation to adopt bitcoin as a recognized form of currency and the second in the world after El Salvador.
In addition to petroleum, CAR possesses other mineral deposits including diamonds, copper and rhodium. The country’s natural resources also include gold, limestone, cobalt and manganese, among others.
The landlocked African nation still remains one of the least developed countries in the world, in spite of its abundant natural resources. For President Faustin Archange Touadera, the tokenization of these “massive geological treasures” represents a means of creating new investment opportunities in the country.
7. NY Attorney General Warns About Investing in Crypto Market — Says It's Extremely Unpredictable, Unstable
New York Attorney General Letitia James has issued a warning about investing in cryptocurrency. She said the crypto market is “extremely unpredictable” and “unstable,” noting that the market “reached record lows” last month.
*NY Attorney General Warns About Cryptocurrency*
New York Attorney General Letitia James issued a warning about investing in cryptocurrencies Thursday. The official Twitter account of the New York Attorney General’s Office tweeted:
James added: “New Yorkers should be cautious and think twice before putting their hard-earned money into this unstable market.”
Last year, James shut down cryptocurrency trading platform Coinseed. She also took action against two crypto lending platforms.
The New York attorney general’s warning followed weeks of cryptocurrency sell-off. However, many people on Twitter disputed her claim that the crypto market reached record lows last month. At the time of writing, bitcoin is trading at $30,505.32, up over 3% in the past seven days but down 21% over the past 30 days.
Several countries have also warned about investing in cryptocurrencies following the crypto market sell-off. In addition, cryptocurrency terra (LUNA) and stablecoin terrausd (UST) collapsed in May, losing almost all of their values.
Following the collapse of the two cryptocurrencies, the chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, warned that a lot of crypto tokens will fail.
This week, Singapore’s deputy prime minister advised retail investors to steer clear of cryptocurrencies. The governor of India’s central bank, the Reserve Bank of India (RBI), also issued a warning about cryptocurrency following the LUNA and UST catastrophe.
Bank of England Governor Andrew Bailey warned last week that bitcoin has no intrinsic value and is not a practical means of payment.
8.
Cyprus Looks To Become Global Crypto Hub With New Bill
While the US and parts of Europe weigh the role that cryptos might play in aiding Russian sanction evasion, Cyprus is being fully compliant, a government official told Blockworks
*Cyprus’ Distributed Ledger Technology bill undergoes legal vetting after public comment period
*Officials are weighing the implications of passing policy before the EU releases its framework
Cyprus is vetting a cryptocurrency “umbrella” bill in a bid to establish the Mediterranean nation as a premier destination for digital asset innovators and companies.
The legislation, the Distributed Ledger Technology Bill, was published for public comment in 2021 and is now undergoing legal vetting, Kyriacos Kokkinos, Cyprus’ deputy minister to the president for research, innovation and digital policy, told Blockworks.
The bill focuses on clarifying policies around the digital asset industry and amends existing related laws, such as property law and tax codes.
“What we see as an opportunity for Cyprus and what we’re working on is to develop a new pillar of our economy,” Kokkinos said. “Through focusing on the technology sector, especially on new and disruptive technologies, like fintech and blockchain, we aim to build a new pillar of the economy that will give economic competitiveness and social prosperity.”
Key provisions include clarity around taxation and token issuance, plus a measure enabling the Cyprus Securities and Exchange Commission to issue related secondary legislation.
Whether the country should pass its legislation before the European Union releases its own policy is an ongoing discussion, Kokkinos said.
“Because we are members of the European Union, we will have to be very careful,” he said. “We don’t want to run ahead and regulate something then the European Union comes forward in a year with a different point of view.”
In an effort to coordinate policy, Cyprus lawmakers are in close contact with EU officials.
We are fully aware of our small size, so the name of the game is collaboration with our neighboring countries, especially Greece, Israel and other geographies in the Middle East, so that we can complement each other,” Kokkinos said.
The plans come as countries around the world continue to grapple with how to respond to Russia’s invasion of Ukraine. Cyprus has been impacted significantly by sanctions as Russian citizens are notable contributors to the country’s tourism and banking industries.
Bank deposits in Cyprus held by non-eurozone residents totaled more than $6 billion in February 2022, according to the Bank of Cyprus. Before the financial crisis-induced bailout in 2013, non-eurozone deposits totaled more than $21 billion.
While the US and parts of Europe weigh the role that cryptocurrencies might play in aiding Russian sanction evasion, Kokkinos said Cyprus is being fully compliant.
To the best of my knowledge and attention, no cryptos are being processed through Cyprus, and Cyprus is very sensitive and strict in adhering to all sanctions against Russia,” he said.
9. Crypto 401(k) Provider ForUsAll Sues US Department of Labor
ForUsAll is suing the Department of Labor after the regulator discouraged retirement planners from turning to crypto.
ForUsAll, a 401(k) provider with over $1.7 billion in assets under management (AUM), has sued the U.S Labor Department (DOL) for planning an investigation into companies offering crypto investment options to 401(k) holders.
The San Francisco-based firm indicated that the regulators also discouraged employers from turning to cryptocurrencies for their retirement planning.
This lawsuit seeks to preserve the rights of American investors to choose how to invest money in their own retirement accounts,” reads the lawsuit. “Brought under the APA [Administrative Procedure Act], this lawsuit challenges DOL’s arbitrary and capricious attempt to restrict the use of cryptocurrency in defined contribution retirement plans.”
In a separate release from ForUsAll, the firm said that the federal agency should instead focus on its rulemaking process before issuing such guidance publicly.
“The DOL plays several important roles that serve American workers — but ‘armchair financial adviser’ shouldn’t be one of them,” said CEO of ForUsAll Jeff Schulte.
ForUsAll first partnered with Coinbase back in June 2021, offering up to 5% of 401(k) savings in 50 different cryptocurrencies. The startup now serves more than 80,000 retirement savers across 500 plans.
Fidelity has also joined the trend, allowing its clients to diversify their retirement savings with Bitcoin for up to 20%.
As crypto and retirement plans continued to spring up, the DOL was recently joined by various politicians, notably Elizabeth Warren, in urging caution and pushing back against the trend.
