Here is what you need to know on Monday, May 25, 2020
The cryptocurrency market is in red on the first day of this week’s trading. The largest cryptocurrency by market capitalization, Bitcoin (BTC) is at the forefront with losses of almost 5% in the last 24 hours. Over the last seven days, BTC has lost 9.90% of its value. It is trading at $8,794 following a 0.89% growth on the day. An intraday high has been reached at $8,817 (second resistance zone after $8,800). BTC/USD is facing a bullish trend amid low volatility which means rapid price action is unlikely in the coming sessions.
Among the top three cryptocurrencies, Ethereum leads with a 1.36% growth on Monday. The cryptoasset has adjusted from $199.59 (opening value) to $202.20 (prevailing market value). Unlike Bitcoin, Ethereum’s trend is bearish. However, downward price action would remain limited due to the low volatility. In other words, there is a possibility, Ethereum will hold above $200 in the rest of the sessions on Monday.
Ripple, on the other hand, is focused on reclaiming the ground above $0.20. The weekend session saw the price retest support at $0.19. Like Ethereum, XRP/USD is facing a downward trend. On the brighter side, low volatility means that price movement will also be limited on Monday.
Several cryptocurrencies among the top 100 managed to avert the strong arm of the bears. They include THETA (up 10.43%), Zilliqa (up 3.87%), KuCoin Shares (up 62.13%) and Verge (up 7%) in the last 24 hours. Consequently, the worst-hit coins include HyperCash (down 10.19%), Numeraire (down 10.74%), OmiseGo (down 11.83%), Cardano (down 6.28%) and Status (8.31%).
Chart Of The Day: BTC/USD hourly
Bitcoin and gold could be bracing for a bull-run triggered by possible United States sanctions against the Asian economic giant, China. Interestingly, Bitcoin had established a correlation with the Yuan during the recent trade dispute between the US and China. A report by Bloomberg had established that Chinese investors used Bitcoin to hedge against the then devalued Yuan. At the time, demand for the largest cryptocurrency was high considering that investors paid a premium price of $300 to get it.
Several months after the trade war, Bitcoin is looking into another rally likely to emanate from a new version of a “cold war” between the two nations. White House National Security Advisor, Robert O’Brien is threatening to enact more sanctions as a retaliation to the yet to pass Hong Kong national security law.
In the past nations hit by sanctions tend to seek alternatives in cryptocurrencies, especially Bitcoin. For example, Venezuelans rushed to Bitcoin to deal with extreme inflation while Iranians sort an alternative in Bitcoin to navigate a ban on international banking. China’s central bank could devalue the Yuan as a way of retaliating against the sanctions. A devalued Yuan will call for alternatives and this is where Bitcoin and gold come in.
Binance Options has added support for Ethereum (ETH) and Ripple (OXRP contracts. According to the announcement on Monday, “the new listing will be available on the latest version of our (Binance) mobile app.” Links were also provided to assist users in either downloading or updating the mobile app. Binance also included a warning to investors that “there is no guarantee that your options purchase will execute at a profit after the premium has been deducted. Most options purchases will not be profitable, but a minority will be very profitable.”
Governments around the world are putting everything they have into the fight against the COVID-19 pandemic. In light of the economic snarl-ups, regulators have begun to eye cryptocurrencies and especially the blockchain technology. Some of the factors pushing theses governments include, delay in data reporting, the struggling international trade as well as rigid supply chains.
According to Otokita Shun, a senator in Japan, cryptocurrencies will become very useful “in the world of after – corona.” In his opinion, the benefits of cryptocurrencies and the blockchain will become more apparent. Shun also predicted that there will be an overhaul of the tax guidelines and other financial hurdles that hinder cryptocurrency growth.
Quote of the day
“In the world of after – corona, not only digital currencies but here, the importance of cryptocurrencies and blockchains will increase. The Diet will also call for positive improvements in taxation improvements in taxation and regulations that hinder innovation.” (@Otokita Shun).
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