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Cryptocurrencies gain on Middle East tensions
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Litecoin nears the lower limit of the upward channel
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Will new Chinese law pave the way for the state-backed cryptocurrency?
Taking a look at the Bitcoin chart, one can see that the uncertainty and concerns related to the US-Iran conflict caused BTC price to spike. An interesting fact to note is that at one point, Bitcoin price on some Iranian exchanges exceeded $24,000! Capitalization of the whole cryptocurrency market increased by around $25 billion during recent tensions in the Middle East.
Source: xStation5
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Open account Try demo Download mobile app Download mobile appBitcoin started to appreciate amid Middle East tensions and climbed to the $8400 area for the first time since November 2019. The upward move was halted at the 50% retracement level of the downward move started at the end of October. As are situation began to calm, the most popular cryptocurrency started to lose ground and slid below the psychological $8000 mark. In turn, a head and shoulders pattern surfaced on the Bitcoin chart with neckline at around $7750. Should the coin realize the range of the pattern in a textbook manner, declines could reach $7000.
Source: xStation5
Moving to the Litecoin chart, one can see that altcoin has been trading in an upward channel since the middle of December. Litecoin is testing the lower limit of the channel at press time. Should the coin move beneath it and break below the lower limit of the Overbalance structure ($43), a short-term trend reversal could be on the cards. In such a scenario, a $39 handle would serve as the first support to watch. On the other hand, failure to break below the range of the channel could see the price rebound towards the latest high at $48.
Cryptocurrency News
New Chinese regulation regarding cryptographic password management came into force on January 1. The regulations set standards for the application of cryptography and password management and, in turn, makes China less vulnerable in cyberspace. Standardization may be seen as an attempt to pave way for the state-backed cryptocurrency. Currently China is considered a leader in the field and is expected to be the first country to issue its own state-backed digital currency.
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