1. Market Wrap: Bitcoin Holds Above $30K but Price Chart Looks ‘Ugly’
Also, Circle might be an attractive “starter stock for the cautious” when it goes public, according to one analyst.
Bitcoin bounced to around $32,200 after touching a 2.5-week low early Friday near $31,000.
The largest cryptocurrency by market value may have been buoyed by a report that Bank of America has approved trading in bitcoin futures for some clients, according to Edward Moya, senior market analyst for Oanda.
“This is a big commitment for America’s second-largest bank and signals that interest in trading cryptocurrencies is here to stay,” Moya wrote in an email. “On Wall Street, if one bank sees opportunity in doing something risky, the rest will easily justify following suit.”
Bitcoin (BTC): $31,964.2, +1.04%
Ether (ETH): $1,917.5, -0.29%
S&P 500: 4327.1, -0.75%
Gold: $1810.9, -1.01%
10-year Treasury yield closed at 1.299%, compared with 1.303% on Thursday
Analysts said bitcoin might be prepping for a price breakout — higher or lower — after trading in a range between roughly $30,000 and $40,000 for the past eight weeks.
2. Bank of America Approves Bitcoin Futures Trading for Some Clients
Clients are in the process of being set up, with some already live, according to one of two sources.
Bank of America, the second-largest bank in the U.S., has approved the trading of bitcoin (BTC, +0.25%) futures for some clients, according to two people with knowledge of the matter who spoke on condition of anonymity.
Like most institutions, the bank has been conservative in its approach to the crypto sector, but due to the large amount of margin required to trade the futures, it is now allowing some clients to access the crypto market, one of the sources said. Some clients are setting up to trade bitcoin futures, which are cash settled, and one or two may have already gone live, the other source said.
A number of investment banks are reportedly allowing clients to invest in crypto products. In March, Goldman Sachs confirmed plans to relaunch its cryptocurrency trading desk after a three-year hiatus, and in May, the investment bank started buying and selling bitcoin futures in block trades through Chicago Mercantile Exchange (CME) Group, using Cumberland DRW as its trading partner.
3. COVID-19 Stimulus Checks Fueled ‘Modest’ Jump in Bitcoin Price Last Year: Cleveland Fed
Policymakers should not be concerned, the researchers wrote: Only 0.02% of coronavirus-relief checks ended up in bitcoin.
The first round of stimulus checks in the U.S. in April 2020 fueled a “significant but modest” bump in bitcoin trading volume and price, according to a study from the Federal Reserve’s Cleveland branch that was posted Friday.
Central bank researchers estimated the government’s $1,200 stimulus checks sent to Americans during the COVID-19 pandemic fueled a 3.8% jump in trading volume and a 0.7% rise in price. Overall, they estimated just 0.02% of the stimulus money ended up in bitcoin.
Framed against bitcoin’s wild volatility, these figures don’t add up to much. Further noting a 0.07% “permanent price increase,” the researchers said their findings are “modest compared to the 4.6% standard deviation” in bitcoin’s daily price swings. Nevertheless, the researchers said the jumps were “statistically significant.”
The findings add some hard data to lockdown-era whispers of a government-fueled surge in $1,200 bitcoin buys. Those purchases were happening, the researchers found, but almost exclusively among young, single investors with moderate incomes.
4. XRP Eyes ‘Death Cross,’ Has Support at $0.51
Previous “death crosses” have marked major or interim price bottoms.
XRP’s price chart looks set to produce the first “death cross” in five months, a signal analysts consider to be a bear market indicator.
The 50-day simple moving average (SMA) of XRP’s price is expected to cross below the 200-day SMA in the next day or two, confirming the so-called bearish death cross. While in theory the pattern implies a deeper sell-off, historical data suggests otherwise.
Previous occurrences observed in early February this year, March 2020, August 2019, April 2018, January 2017 and May 2016 marked major or interim price bottoms. One in May 2014 brought immediate selling pressure to the market.
Death cross’ dismal record as a reliable indicator is hardly surprising, as moving-average studies are based on backward-looking data. In other words, death crosses are the result of a prolonged sell-off and have limited predictive powers. More often than not, the market is oversold by the time the crossover happens.
5. Ethereum Co-Founder Anthony Di Iorio to Sell Decentral and Cut Major Ties to Cryptocurrency
Di Iorio said that concerns about personal security figured partly in his decision to work on philanthropic initiatives full-time.
Anthony Di Iorio will be severing his major ties to the cryptocurrency industry and selling his current venture Decentral to start a philanthropic foundation in the next year, the Ethereum co-founder told us.
“I’m a crypto guy and I don’t want to be known as a crypto person,” he said. “I want to be known as a problem solver.”
Concerns about his personal security figured “a good 20%” into his decision, he said.
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July 17, 2021