• Major cryptocurrencies are trading sideways
• Paraguay government to introduce regulation for Bitcoin after El Salvador’s historic decision
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Most of the major cryptocurrencies were trading sideways last week and it seems that there is no near-term catalyst for a bigger move. The situation in China negatively affects mining operations and contributes to the persistence of negative sentiment on the market, but on the other hand cryptocurrencies adaptation is other countries continues to gain traction. Bitcoin's dominance increased to 45.3%. The capitalization of all digital assets in circulation rose to 1.40 trillion, while an average daily trading volume is registered at $56.10 billion.
Bitcoin market dominance moves slightly higher. Source: Coinmarketcap.com
Cryptocurrency adaptation in South Korea and Paraguay is growing
After El Salvador decided to make Bitcoin a legal tender at the beginning of June, Paraguay has started to develop its very own cryptocurrency strategy. Latin country is introducing a bill to Congress on Wednesday, July 14 but there were no details on what this bill would entail. Meanwhile Woori Woori Financial Group has become the latest major South Korean financial institution to announce it will launch digital asset custody services. This decision involves CoinPlug, one of the oldest cryptocurrency exchanges in South Korea and Kakao, a blockchain payments company, in a joint venture with the bank.
Some indicators also point to declining bearish momentum. According to the analytics firm Santiment, Bitcoin’s market-value-to-realized-value (MVRV) ratio, which seeks to capture market bottoms and tops, is indicating that a Bitcoin rally might be on the horizon.
In the past, when the MVRV indicator turned negative, it often led to an increase in the price of Bitcoin. Source: Santiment
While this is bullish for Bitcoin price, JP Morgan suggested that El Salvador will face headwinds in using BTC as a medium of exchange as a large portion of the most popular digital currency is held by wallets that have not made any transfers in the past year. The illiquidity and the nature of the volume limits Bitcoin as a medium of exchange, according to the bank analysts.
Bitcoin price has been moving in a rising wedge formation starting in mid-June, following a period of consolidation that started on May 19. Today the price broke below 50 SMA (green line) and 50 Fibonacci retracement of the upward wave which started back in March 2020. Should break below the limit of the formation occur, then investors should focus on the $32,000 handle, where the previous price reactions can be found. The nearest major resistance lies at $36,500 level. Soure: xStation5
Ethereum price broke below the lower limit of the wedge formation last week, however sellers failed to uphold bearish momentum and downward move stopped around support at $2025.00. As long as the price sits above, further upward impulse towards resistance at $2310 is possible. However during today's session, increased sellers activity can be seen. Should break below the aforementioned support at $2025 occur, then downward move may accelerate towards $1770 level. Source: xStation5
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