- Ripple sends a letter to Congress asking for clarity for XRP.
- Bitcoin continues to retreat but with enviable health.
- Everyone watches the Ethereum for a signal confirming the bullish scenario.
The cryptocurrencies sector has been struggling for years to find a regulatory framework that provides guarantees to all involved actors.
It is evident that Facebook's Libra project that involves issuing a cryptocurrency that allows the exchange of value in and towards the Facebook ecosystem has accelerated the regulatory scrutiny.
Suddenly everyone wants to know – inside and outside the crypto universe – the classification of each project that uses Blockchain technology. Is it a coin? Is it a token? Or something else?
What is a cryptographic coin?
Bitcoin and Ethereum, among others, are coins. They can be transacted, fractionated, and accepted as stores of value. Moreover, their production is limited, and their owner is guaranteed their authenticity and ownership while retaining the access keys to their wallet.
What is a Token?
It is a project that has no proprietary blockchain and uses the technology of other projects to develop upon. This business model generates applications that use blockchain technology. The tokens created are used as a tool that allows different users to interact with the utility. They have value as a tool, but their intrinsic value is debatable.
What is XRP? (Personal opinion)
XRP is a hybrid that concentrates in a single token/coin several attributes of both models and adds some of its own.
It is an instrument used by Ripple Ltd. to implement transnational systems for sending and receiving capital efficiently. (Token)
It is assigned an intrinsic value since the current, and future business potential of the company is known, and the company financed with the sale of XRP's. But it is a centralized project and unlimited supply. It is almost a Coin.
If I take the three points above and mix them, XRP looks like any initiative to raise capital in exchange for ownership of a part of the company.
Tomorrow, the committee on the regulatory environment for digital coins and blockchain will hold a hearing in the U.S. Congress.
Stay tuned for all the updates on FXStreet.com.
ETH/BTC Daily Chart
ETH/BTC is trading at 0.0220 after six consecutive days of rises. In intraday terms, the main moving averages start crossing to the upside.
Everyone is waiting for Ethereum's reaction after many months of struggles in comparison to Bitcoin. The profit potential is enormous, and the risk contained. Even if Ethereum ends up "dying" under Bitcoin’s heavy hand, it would still have value – and that value would increase.
Above the current price, the first resistance level is at 0.0228 (price congestion resistance), then the second at 0.025 (EMA50) and the third one at 0.0268 (price congestion resistance).
Below the current price, the first support level is at 0.020 (price congestion support), then the second at 0.016 (price congestion support). Below this second level of support, the scenario is very uncertain.
The MACD on the daily chart shows a potentially very bullish profile. It has a proper inclination to the upside and also enjoys a good opening between lines.
The DMI on the daily chart remains unchanged in the past few days. The bears control the asset, but with little advantage over the bulls.
The healthy development of this type of structure is a leadership change.
BTC/USD Daily Chart
BTC/USD is trading at $9,566 after testing the $9,150 support (price congestion support) for the second time. Bitcoin's resistance to drop is immense.
Above the current price, the first resistance level is at $10,000 (EMA50), then the second at $10,800 (price congestion resistance), and the third one at $11,300 (price congestion resistance).
Below the current price, the first level of support is at $9,150 (price congestion support), then the second at $8,800 (SMA100 and price congestion support) and the third one at $8,400 (price congestion support).
The MACD on the daily chart shows a bearish profile at an advanced stage. It begins to show a deceleration in moving averages. There are still many days of weakness left in the BTC/USD pair.
The DMI on the daily chart shows how the bears control the pair but with a tiny advantage over the bulls. The buying side strives to stay above the ADX line and retain the ability to give the bullish surprise.
ETH/USD Daily Chart
Above the current price, the first resistance level is at $215 (price congestion resistance), then it is second at $225 (price congestion resistance) and the third one at $240 (EMA50 and price congestion resistance).
Below the current price, the first level of support is at $205 (price congestion support), then the second at $200 (price congestion support) and the third one at $195 (price congestion support).
The MACD on the daily chart shows a profile proposing an impending bullish cross. The compression between the lines is very high, and the output can be violent.
The DMI in the daily chart shows how the bears have lost the support of the ADX line and fulfilled the testing pattern. The bulls are kept at low levels but have free room to rise.
XRP/USD Daily Chart
XRP/USD pair is quoted at $0.309 and is indifferent to the company's letter to Congress calling for effective regulation of the Blockchain projects.
Above the current price, the first level of resistance is at $0.32 (double resistance due to price congestion), then the second at $0.33 (resistance due to price congestion) and the third one at $0.335 (resistance due to price congestion).
Below the current price, the first level of support is at $0.308 (price congestion support), then the second at $0.30 (price congestion support) and the third one at $0.295 (price congestion support).
The MACD on the daily chart shows a confirmed bullish cross profile with little impact on the price. Tomorrow's hearing may have a substantial impact on the XRP.
The DMI on the daily chart shows bears controlling the situation without changing their level of activity. Bulls go down a bit and complicate a possible change of leadership.
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