On Monday, Joe Biden signed a bill that allows the government to collect taxes from cryptocurrency custodians and possibly require customer information from DeFi protocols. On the same day, Chinese official Meng Wei said that the Chinese government would completely stop cryptocurrency mining at state-owned enterprises. Read how this news affected the crypto-asset market and what will happen next in our analysis.
Bitcoin was trading at around $66,000 on Monday, falling short of its all-time high of $68,789. News from the U.S. and China sent the price into a downward spiral – it continued to fall all week, dropping below $60,000 on Tuesday and reaching its lowest price in a month of $55,000 on Friday. As the weekend wore on, the situation began to stabilize. On the technical chart, Bitcoin rolled back to the 0.382 Fibonacci retracement level ($57,820), where buyers began to build up positions. But the growth was stopped by the sellers' response at $59,800, which led to the instrument's rollback to the dynamic support level – the exponential moving average 21 EMA 2 H, above which Bitcoin is trading at the moment.
After the retest, BTC set a local price high, which in the short term indicates a bullish structure. Analysts suggest that the uptrend will continue, and the asset will not break the middle support line of the descending channel. The price will drop to the support level ($57,820) and then turn north to the next resistance level around $61,000.
As is usually the case in the crypto market, Bitcoin's price dynamics are affecting other assets. On Tuesday, the market lost $300 billion – the market capitalization fell from $3 trillion to $2.7 trillion, although before that ETH was trading close to its previous record high of $4859. On the first day of the week, its price fell 11.3%, dropping to $4202. Despite the bearish sentiment, there was some good news for Ethereum. According to a Securities and Exchange Commission report, Grayscale Ethereum Trust shares rose 19% in the third quarter of 2021, while Bitcoin Trust shares fell 2.6%.
On the daily technical chart, the "Cup and Handle" pattern is visible, but the asset is still busy forming the rest of the "handle". As soon as the ETH price makes a decisive break through the upper resistance, crypto traders will be able to use this opportunity to go long. The most important EMAs (20, 50, 100 and 200) show a bullish alignment. The Relative Strength Index value at 58 indicates that market participants remain positive. However, a bearish divergence in the RSI chart indicates the need to remain vigilant.
Square released a white paper Friday on a new decentralized protocol for a cryptocurrency exchange called tbDEX. The project is described as "a protocol for disclosing liquidity and exchanging assets" (such as bitcoin, fiat money or real-world commodities). According to the document, 1.7 billion adults in the world do not have access to a banking system, but two-thirds of them own cell phones. But to use decentralized financial services, a person has to buy a cryptocurrency on a centralized exchange and then transfer it to DeFi, paying a fee at each step. tbDex intends to solve this problem.
Instead of a management token, participants will be able to negotiate the trust directly with each other or, by mutual agreement, turn to a third party who enjoys the trust and will vouch for one of them. Asset exchanges between users will leverage utilizing decentralized identity (DID) and verifiable credentials (VC) to establish identity in the real world."The tbDEX protocol provides a secure exchange while providing minimal identifying information satisfactory to the counterparty. The protocol itself will not collect any personal information," the document states. The published white paper is not complete, so certain aspects may be added to or changed in the future. However, the project itself, if completed, will allow the crypto-asset market to take another big step towards economic literacy.