- PBoC intensifies cryptocurrency crackdown
- Twitter enables tipping with Bitcoin
- Institutional investors are turning their attention to Ethereum, according to JPMorgan
The last seven days were negative overall for the cryptocurrency market. Bitcoin and other major coins took a dive last week as at the latest PBOC crackdown, a potential default story of China Evergrande property developer group and Fed’s tapering signal weighed on market sentiment. Bitcoin's market dominance decreased slightly to 42.3%. The capitalization of all digital assets in circulation fell to 1.95 trillion, while an average daily trading volume is registered at $98.20 billion.
China is cracking down on crypto again
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Create account Try a demo Download mobile app Download mobile appBitcoin price fell sharply on Friday as old news suddenly got picked up on social media, sparking an instant crypto price crash. The People’s Bank of China (PBoC) declared all cryptocurrency transactions as illegal. The Central bank has banned overseas exchanges from providing cryptocurrency services to Mainland China residents online. Financial institutions, payment firms and related companies are barred from facilitating online crypto trading. However, the Chinese authorities did not provide any new information in relation to what was already commonly known, and many investors believe that the recent drop in price was irrational. Still uncertainty related to Evergrande weighs on market sentiment after the Chinese developer failed to make a $83.5 million coupon payment last week.
Meanwhile crypto adaptation is increasing. Twitter announced that it will allow users to tip their favourite content creators in Bitcoin. Twitter has also unveiled plans to support NFT authentication for users. Also two trust funds based on Bitcoin and Ethereum have been launched by California-based Cambrian Asset Management. The institutional investment products will offer exposure to the underlying assets but cut out some of the volatility according to Bloomberg.
Small bitcoin holders, or those who own less than 10 BTC, have accelerated their accumulation of BTC after large sell-offs, according to blockchain data compiled by Glassnode.
Small holders have increased their holding since the crypto sell-off in May, suggesting that investors remain active above $30,000 level. Source: Glassnode
Bitcoin launched today's session higher and is currently testing major resistance at $44,000 which coincides with 38.2% Fibonacci retracement of the upward wave launched in July and 50 SMA (green line). Should break higher occur, then upward move may accelerate towards $47,000 level. On the other hand, if buyers manage to regain control, then support at $40,700 may be at risk. Source: xStation5
Ethereum futures more popular among major investors than Bitcoin
JPMorgan has revealed that institutional investors are starting to move away from Bitcoin futures and prefer to use Ether derivatives. The rolling average of the difference between bitcoin futures prices and spot prices had weakened and shifted from positive to negative in September.Meanwhile, the difference between ether futures prices and spot prices remained positive and actually increased in September.”This points to a much healthier demand for [ether] vs. bitcoin by institutional investors,” JPMorgan wrote.
Ethereum price bounced off the major support at $2700 and managed to break above psychological $3000 level which is marked with the 50% Fibonacci retracement of the pullback launched in mid-May 2021. Currently price struggle to break above the earlier broken lower limit of the wedge formation and EMA 100 (purple line). Source: xStation5
