News Updates May 17, 2023
1. Three Top Crypto Analysts Predict Big Rally for Bitcoin (BTC) – Here Are Their Targets. Three widely followed crypto analysts have similar opinions that Bitcoin (BTC) is likely gearing up for a parabolic surge.
Crypto strategist Michaël van de Poppe tells his 656,700 Twitter followers that Bitcoin is flashing bullish signals on the weekly chart.
According to the analyst, Bitcoin continues to trade above two crucial technical indicators on the weekly timeframe despite its retreat from the key psychological resistance at $30,000.
“Bitcoin breaks upwards and tests $27,600.
Weekly timeframe: holding 200 moving average and exponential moving average.
I think we’re continuing towards $38,000-$42,000 from here.”
Meanwhile, fellow crypto analyst Kaleo is also bullish on Bitcoin.
The top trader tells his 587,400 Twitter followers that he thinks Bitcoin is setting up for a move to fresh yearly highs en route to $40,000 after managing to reclaim support at around $27,000.
“I’m a fan of this breakdown / reclaim. See this a pretty solid risk/reward long setup for a potential move back to range highs. And yes, $40,000 is still a magnet.”
Pseudonymous trader Bluntz, who is known in the industry for calling the 2018 Bitcoin bottom, also believes that the king crypto’s corrective move from $30,000 is likely over and that BTC appears poised to resume its uptrend.
“Starting to get some nice follow through candles on daily for BTC after Friday’s reversal.
If this was a three wave ABC down complete, then new highs are potentially on the table.
Sentiment does seem to have flipped down here with many expecting further downside now.”
2. Celeb-backed Token Offerings More Likely to Be a Scam, Research Reports
Is your favorite celebrity backing a new cryptocurrency? That’s probably a “red flag for investors," say researchers.
New research shows that there is a link between celebrity endorsement of a crypto project and the likelihood of it being a scam.
The research titled "The Effect of Celebrity Endorsements on Crypto" conducted by two former SEC economists—Joshua T. White and Sean Wilkoff—investigated the effects of celebrities boosting various ICOs.
They found that “celebrity-endorsed ICOs are associated with a 23-26 percentage point increase in scams through September 2019 and a 39-40 percentage point increase in fraudulent ICOs through April 2023.”
This “suggestive evidence” points to a “red flag for investors,” the researchers wrote.
The research examined the behavior of 21 celebrities from 2016 to 2018, including Floyd Mayweather, Snoop Dogg, Paris Hilton, and Lionel Messi.
"We assumed that celebrities could boost the visibility of cryptocurrency given their social media reach and lead to a fear of missing out (FOMO)," Joshua T. White told Decrypt via email. "Given the novelty of blockchain and crypto, we were unsure if celebrities would have expertise to identify credible projects [or] management team to understand the legal risks of touting a particular coin without disclosing compensation."
Another key finding was that celebrity endorsements are more likely to be a scam when the celebrities profession does not match the ICO product, per the researchers' sample.
However, when a celebrity's profession matches the ICO product–such as a soccer player endorsing an ICO that will fund a blockchain-based sports gambling website–it is less likely to be a scam.
3. China Takes Decisive Action Against NFT Market Scammers.
Supreme People’s Procuratorate of the People’s Republic of China, the national agency responsible for legal prosecution, shared its thoughts on the non-fungible token (NFT) market in an article published online.
The article, written by three authors, laid out the prosecutors’ vision of the market risks and the following reasons to enforce it more actively.
The authors pointed out that the trend of “securitization” of NFTs, which refers to the shared ownership of one copy by multiple users, no longer corresponds to the criteria of non-reproducibility, indivisibility, and uniqueness. They believe that this trend poses a great risk to the stability of the NFT market and needs to be addressed as soon as possible.
In addition, the prosecutors expressed their concern about the “inflation of prices” on NFTs, which has been triggered by the use of various marketing methods such as airdrops, blind boxes, and limited sales. The authors argue that the inflated prices of some non-fungibles are not backed by an “artistic beauty” and “reasonable pricing mechanism.” According to the procuratorate, marketing models such as rewards and dynamic rights and interests can also easily evolve into illegal pyramid schemes.
The proposed reaction to these risks includes a “crackdown on criminal activities”, equal emphasis on punishment and governance, and investment in risk research and law popularization. The article suggests that it is the national prosecutors who will take on the mission to separate a “true innovation” from the “pseudo” one and protect the former one.
China has not changed its anti-crypto stance, even despite the steady progress in crypto adoption by Hong Kong. Moreover, the country seems to take the same hostile approach toward Artificial Intelligence (AI). In early May, a suspect was detained by local authorities and arrested in the Gansu district of China after allegedly using ChatGPT to generate fake news stories.
Despite the potential of the NFT market, it bears financial, security, and “legal” risks, as Chinese prosecutors believe. Hence, the market needs not only comprehensive governance but also a crackdown on “pseudo-innovation.” However, it is important to keep in mind that this crackdown should not hamper the true innovation and creativity of the market.