News Updates September 19, 2022

1. Bitcoin Rainbow’ chart marks $16.7k as bottom, hints at a pot of gold in most bullish scenario

As the cryptocurrency market flashes red again, losing $165 billion in a week and dropping to its lowest levels in two months, and Bitcoin (BTC) drops below $19,000, investors and traders are looking for any kind of input on what awaits the largest token in the future.

To help them gauge the price of the maiden digital asset, some of them turn to Bitcoincenter’s rainbow price chart, introduced by Bitcointalk user ‘trolololo’ in 2014, that shows its past performance to provide a potential insight into its long-term movements.

In its short-term predictions, the rainbow chart indicates $16,703.48 as the bottom (‘1BTC = 1BTC’) in its purple band for September 22. At the same time, the end-of-the-year prognosis suggests that its most bullish scenario (‘Maximum Bubble Territory’), marked by dark red color, could see Bitcoin reach $294,915.68 on January 1, 2023.

As for the short-term middle-way ‘HODL!’ scenario, marked in yellow, it is predicted to stand at $76,160 on September 23, 2022, whereas for the year’s turn, the rainbow price chart indicates Bitcoin could be in the zone around $86,790.

2. Australian senator drafts bill aimed at stablecoin, digital yuan regulation

Senator Andrew Bragg on Monday released a draft bill aimed at regulating crypto exchanges, stablecoins, and the digital yuan.

Australian Liberal Senator Andrew Bragg has released a new draft bill aimed at clamping down on digital asset exchanges, stablecoins, and China’s central bank digital currency, the e-Yuan.

In a statement on Sept. 18, Senator Bragg stated that “Australia must keep pace with the global race for regulation on digital assets” as “it is essential that the parliament drives law reform” on the matter.

The new draft bill, titled Digital Assets (Market Regulation) Bill 2022, calls for the introduction of licenses for digital asset exchanges, digital asset custody services, stablecoin issuers, as well as disclosure requirements for facilitators of the e-Yuan in Australia.

Speaking to Cointelegraph, Senator Bragg said Australia has “quite a risk exposure, as an economy, and that’s one of the reasons why we need to have a serious program for managing disruption, managing risks, that emanate from the development of a CBDC.”

Senator Bragg said the objective of this particular act is to provide “an effective regulatory framework” as well as to provide "for the reporting of information by certain banks that facilitate the use or availability of digital Yuan in Australia” and to provide “additional duties” for governing bodies in relation to this act and the “regulation of activities relating to digital assets and digital Yuan.”

Senator Bragg said that this isn’t “an accusatory position to take” it’s simply just being “prepared and gathering information” which he thinks is entirely “reasonable.”

The Liberal senator also added that Australia wouldn’t benefit from having a CBDC as “privacy issues cannot be managed,” however it is important that the Australian government “put something on the table” to manage other CBDCs being introduced, as the Governor of The Reserve Bank of Australia has “spoken before saying there needs to be regulation on stablecoins.”

3. S. Korean Authorities Ask Interpol to Issue Red Notice for Terra Co-Founder Do Kwon: Report

Authorities in Singapore confirm that Kwon is no longer in-country, while he maintains that he’s not “on the run.”

The Financial Times is reporting that authorities in South Korea are said to be asking Interpol to issue a ‘red notice’ for Terraform Labs co-founder Do Kwon, as his current location is unknown.

* A red notice is a request for law enforcement worldwide to locate and arrest the named individual and hold them until extradition proceedings can commence. If issued the notice would go out to member police forces in 195 countries worldwide.

* Interpol did not respond to a request for comment from CoinDesk by press time.

* On Saturday, the Singapore Police Force confirmed to the press that Kwon was no longer in the city-state as was believed earlier.

* South Korean prosecutors issued an arrest warrant for Do Kwon on Sept. 14 and then moved to invalidate his passport days later.

* While Kwon is a South Korean national, it is not known if he holds a second or third nationality.

* Kwon tweeted that he is not on the run and is in “full cooperation” with authorities and has “nothing to hide

  •  He also said that unless “we are friends, have plans to meet, or are involved in a GPS-based Web3 game you have no business knowing my GPS coordinates.”

4. Explained: Is Bitcoin good for the environment?

It’s deceptively easy to cite energy statistics about Bitcoin mining as evidence that it’s bad for the environment. Nevertheless, civilizations have always expended energy on new technologies that initially appeared to be terrible for the environment, such as railroads, highways, telephone lines, batteries, natural resource mines, or computers, among endless examples.

Substantially all industrial activities are bad for the environment. The more relevant question is not whether Bitcoin mining is bad for the environment per se, but rather ⏤ as with every other use of power ⏤ is the activity worth it?

Indeed, a closer examination of Bitcoin statistics makes it impossible to summarily assume that Bitcoin is bad for the environment, especially when compared to other unquestioned uses of power like holiday lights or video games.

For example, the Bitcoin Mining Council’s second quarter report indicates that Bitcoin mining consumes 189 TWh of electricity in a single year, compared to 162,194 TWh of energy used for all purposes by the entire world. It’s curious to consider the media’s fixation on a new technology that consumes less than 0.2% of the world’s energy.

When compared to Bitcoin’s 189 TWh, consider the energy usage of China (39,361 TWh) or the US (29,291 TWh). Even consider the amount of energy wasted due to simple inefficiencies in power grids every year (50,000 TWh) ⏤ 264 times more than Bitcoin.

Bitcoin miners traditionally seek out inexpensive energy sources, including stranded and renewable sources. The Bitcoin Mining Council, which aggregates data from the majority of Bitcoin’s hashrate, estimates that 59% of the energy used by bitcoin miners came from renewable sources in Q2 2022. In fact, Bitcoin’s use of renewable energy sources increased 6% versus the same quarter in 2021.

5. Bitcoin Is in a Bearish Run as the Bulls Try to Stop the Decline to the Low of $17,605

Bitcoin price long term forecast: bearish
On September 18, Bitcoin turned down from the 21-day line SMA, signalling the resumption of selling pressure. On September 17, buyers failed to push Bitcoin above the 21-day line SMA, leading to the current downtrend. On the downside, Bitcoin could regain the previous lows of $18,675 and $18,638. However, if the bears break below these price levels, Bitcoin will be forced to retarget the critical support level of $17,605. However, if the bulls fail to defend the current support levels, it will lead to another round of downtrends. In other words, if the bearish scenario is confirmed, there will be panic buying and selling of the BTC price.

Bitcoin is at level 36 of the Relative Strength Index for the period 14. The BTC price is approaching the oversold area at level 30. The BTC price is below the 21-day line SMA and the 50-day line SMA, which are responsible for the current decline. It is also below the 20% area of the daily stochastic. This confirms that the cryptocurrency has reached the oversold area. The 21-day line SMA and the 50-day line SMA are sloping south, indicating a downtrend.

Bitcoin has resumed selling pressure as it moves down from the moving average lines. On the weekly chart, a candlestick has tested the 61.8% Fibonacci retracement level on March 28. The retracement suggests that BTC will fall but reverses at the 1.272 Fibonacci extension level or $11,836.95.

6. Crypto Prices Are Crashing Because of What’s Coming on Wednesday

The week is off with bulk of the cryptocurrency market trading in the red, which is largely attributed to the upcoming rate hike announcement from the U.S. Federal Reserve Bank. 

According to a report by Yahoo Finance, Fed officials are expected to deliver a third-straight 75-basis-point increase to their benchmark policy rate during the two days meeting ending on Wednesday. 

Investors across both the crypto market and traditional equities markets are bracing for the impact of the announcement. This is especially as higher-than-expected inflation figures in August (an 8.3% YOY increase in consumer price index -C PI) sparked more pessimism about the Fed rate hike. 

Data from CryptoRank, a cryptocurrency price data aggregator, shows that all of the top 10 cryptocurrencies by market cap have dropped between six to 11% in price in the last 24 hours. Bitcoin (BTC), the market leader fell around 8% to be trading at around $18,400. 

Similarly, the second largest crypto, Ether (ETH), fell 11% on the day to currently be trading at around $1,290. The current ETH price is also a 26.1% drawdown from the one-month high price of about $1,800 it reached in the week preceding the Ethereum blockchains merge event. 

Meanwhile, BNB, XRP, ADA, SOL, and DOGE have fallen about 7%, 11%, 10%, 8%, and 8.5% respectively on the day per data at the time of writing. 

Despite the turbulent market action, analysts have not given up the notion that Bitcoin is forming a bottom. DrProfitCrypto, a pseudonymous crypto market analyst, told his over 35,000 Twitter followers that the pioneer cryptocurrency has entered a "bottom phase" in which he is expecting the price to remain stable between $18,000 and $25,000 till March 2023.

7. Working Group to Develop Efficiency Standard for Crypto Mining in Russia

Crypto industry experts have formed a working group to draft a standard for energy-efficient and profitable cryptocurrency mining in Russia. The rules will aim to help developers and data center operators offer investors increased hardware uptime.

Russia Prepares to Improve Efficiency of Mining Facilities in 2023
A group of crypto specialists have teamed up to elaborate a standard that should improve the overall efficiency of mining and in particular the use of energy to mint digital currencies. The set of rules and procedures will be designed to increase the time the expensive data processing equipment operates under optimal load which should result in higher profitability.

The standard, which is expected to be released for adoption in February next year, will be prepared by members of the Russian Association of Cryptoeconomics, Artificial Intelligence and Blockchain (Racib), the cryptocurrency sector, and other associated industries, the Russian crypto news outlet reported this week.

The decision to establish the working group was announced at a crypto summit held in Moscow, during a presentation on the topic made by representatives of Racib, mining data center operator Vekus Mining Development and Yuri Kudryashov, director of Russia’s Research Institute for Sustainable Development in Construction.

The main purpose of the forum was to talk about the development of the digital environment and digital financial assets in general. Participants discussed the pending legalization of mining in Russia and other activities related to blockchain and cryptocurrencies, the introduction of central bank digital currencies, and the spread of tokenization. The summit also focused on education and security issues.

8. Crypto market lost $165 billion in a week dropping to a 2-month low

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Crypto market lost $165 billion in a week dropping to a 2-month low
Crypto market lost $165 billion in a week dropping to a 2-month low

The global cryptocurrency market has experienced a considerable outflow in the last week despite the historic Ethereum (ETH) Merge event that transitioned the blockchain to a Proof-of-Stake (PoS) status. 

In the last week, the global crypto market sunk below the crucial psychological threshold of $1 trillion, collapsing $165 billion between September 12, when it was trading at $1.068 billion, and $903 billion on September 19, according to data retrieved by Finbold from CoinMarketCap

Notably, the last time the market recorded such a low was on July 14, 2022, a little under two months ago; despite being in a more extended bear market, the overall capitalization of cryptocurrencies had been battling to hold support above $1 trillion during this time.

Elsewhere, the second largest cryptocurrency by market cap, Ethereum, is changing hands at $1,295, down over 10.99% in the last 24 hours and a further 26.15% across the previous week.

Crypto trading analyst Ali Martinez was quick to tweet out a hypothesis from September 15. Now Ethereum has dropped below $1,300, notably Martinez highlighted that ETH could end up in a downwards spiral as low as $1,000: 

The general opinion is that there will be a rise of 100 basis points, followed by more increases in the following months, while discussions over this policy begin to intensify.

It remains to be seen whether the markets will continue to fall based on the outcome as the Federal Open Market Committee (FOMC) meeting approaches Wednesday, 21.

9. France Orders Jail Time for 2 Men Charged With Funding Terrorism in Syria With Crypto: Report

The amount transferred via crypto by three Islamic extremists is estimated at around $280,000, one news outlet in France reported.

French authorities finalized prison sentences for two men who were arrested on charges of funding terrorism in Syria via cryptocurrencies, multiple local media outlets reported Friday.

* The two men, Franco-Algerian Sami Allem and Franco-Moroccan Abderrahman Cheikh, were sentenced in a Paris criminal court on Friday for "participation in a terrorist criminal association" and "financing of terrorism," French daily newspaper Le Figaro reported Sunday.

* Allem was sentenced to three years in prison with one year of probation, while Cheikh was sentenced to two years in jail with two years' probation, according to the report

* The two men were arrested in September 2020 following an operation by France's anti-terrorism prosecution Parquet national antiterroriste (Pnat), Le Figaro reported. In September 2020, French police arrested 29 people suspected of funding Islamist extremists in Syria with crypto.

* Allem and Cheikh were part of a network that was accused of having financed "jihadists" in Syria using crypto between 2018 and 2020. The amount transferred via crypto to Syria for the purpose of funding terrorism was estimated to be around 280,000 euros ($280,268), according to the report.

* France's Ministry of Justice did not immediately respond to a request for comment.