- Officially: China's Bitcoin Exchanges need to close!
- Btc-e: Relaunch under a new Name!
- Regulation Wave around the Globe!
- Bitcoin Course Analysis for Week 37/2017!
Now it is official, China's Bitcoin exchanges were asked to discontinue the operation soon and to announce their closure. According to a [leaked document], all Chinese crypto exchanges have been instructed to "voluntarily stop" their activities as of September 30th. The "Leading Group of Beijing Internet Financial Risks Remediation" is probably behind the document.
Yesterday, I reported on BTCC's announcement that the crypto exchange would close as of September 30, to prevent regulation by the Chinese central bank. ViaBTC also announced this plan shortly thereafter. According to the current state, this plan is now lapsed since the closure of the crypto exchanges has now been ordered from the top. Intermittent announcements, the crypto exchanges must close already today, seem to have turned out to be wrong at the current time however.
The reports of the past few weeks have also caused misunderstandings about the extent of Chinese regulation, also because the exact translation of Chinese instructions could not always be clarified. At present the reports are overlapping, which is why, in the current case, absolutely reliable information can not be given.
According to up-to-date information from the leaked document, Chinese officials are said to have spoken verbatim to crypto exchange operators in order to communicate their ideas of the further approach. The key point of the prosecution seems to be that none of the crypto exchanges has an official license to trade financial products. Huobi and OKCoin have also met with Chinese regulators and are now preparing for a reaction.
The crypto courses again reacted strongly to the media reports, some of which even started an immediate closure of the Chinese crypto exchanges.
The crypto prices once again rapidly entered the basement in the wake of the high uncertainty on the market. The Bitcoin price was now below 3,000 USD, the Ethereum price also fell below the 200 USD mark.
The current panic on the markets could however soon be replaced. Jihan Wu has pointed out on Twitter that the fact that the Chinese crypto exchanges must be closed collectively in one day does not necessarily mean that they can not re-open in the near future - with an official license.
The leaked document states:
By 20 September at 6:00 pm, exchanges will have to prepare a detailed and risk-free plan for closing the transaction and send it to our authority. Exchanges must properly process all legal debts and liabilities and guarantee that the assets and cryptos of their customers are secured.
Before 20 September 6pm, exchanges should determine a bank account, whichever will be used for depositing user funds. All other accounts in banks and other non-bank payment service providers will be canceled and reported to the Business Management Department of People's Bank of China.
By midnight on 15 September, exchanges will officially announce their closure. They must also publish a timetable for the sale of cryptos. Immediately after receipt of this message, customers shall no longer be allowed to register at the exchanges.
Shareholders, controllers, executives, and core financial and technical staff of exchanges shall cooperate fully with authorities during the clearing, while staying in Beijing.
The crypto exchanges are requested to report their daily progress to the final completion of the closure at the authority.
Crypto exchanges must immediately store all data on a DVD and send it to the authority.
The document was signed by the "Leading Group of Beijing Internet Financial Risks Remediation".
The Russian crypt-currency exchange Btc-e has recently been controversial because of numerous incidents related to hacker attacks and government interventions. Nevertheless, BTC-e promised the customer to try to solve the problems and protect the stocks. Does Btc-e keep its promise?
Btc-e: What happened so far
As reported several times before, Btc-e offered the customers an early payment option. Customers who had owned before the shutdown of the exchange market credit could pay 55% of this, but they waived all further claims and agreed to the deletion of their account. Those who did not want to be satisfied with the 55% did not have to react. Then the stocks would be transferred to the now released new exchange market - however Btc-e from now on calls for stronger KYC processes.
WEX: New Exchange is successor to Btc-e
In a press release of 14 September (Thursday), Btc-e announced that a new platform will be launched shortly, which will operate under an unknown name so far. More information would be communicated via Twitter, it was said.
In the night from Friday to Saturday September 15 followed finally an update on Twitter. The new platform is operated under the name WEX. Now no longer with a .com, but a .nz domain. The temporary portal on which users could exercise the payout option was also implemented under a .nz domain. This is an indication that circumvents the regulatory difficulties that have recently occurred in connection with the platform.
You can read the original tweet here
The current regulation wave in the crypto area, which is currently spattering around the world, continues to grow. Recent examples of regulatory efforts by individual countries are Thailand, Namibia and Dubai.
In Thailand, the Financial Market Authority (SEC Thailand) issued a new Opinion on Initial Coin Offerings (ICOs), which states that some tokens fall under the country-specific definition of a securities offer and therefore have to be regulated accordingly. In addition, concerns are raised that in some cases, token sales could be used to deliberately deceive inexperienced investors. At the same time, the Thai authorities are interpreting a much more moderate regulation than is currently being observed in many places - especially in comparison to China.
Instead, SEC recognizes the high potential of tech startups as well as the potential of ICOs as a means of financing this. Similar to the Canadian regulators, the Thai government puts the regulated and controlled issue of tokens into play.
A not so positive news from the point of view of crypto users was to be heard from Namibia this days. ICOs, crypto trades, and any acceptance of digital currencies are hitherto forbidden, even though the Bank of Namibia now notes that currencies such as Bitcoin represent only a minimal threat to the monetary policy of the central bank.
In a paper on crypto currencies, the Bank of Namibia, in addition to the known risks commonly associated with crypto currencies, also represents the highly valued potential of the distributed Ledger Technology, which is based on the currencies.
For the time being, it does not, however, note that exchanges for digital currencies are not foreseen in Namibia under the Exchange Control Act of 1966. Crypto currencies will therefore not be recognized either as domestic or foreign currency in the near future. The value of digital money is neither guaranteed by a central bank nor covered by property values, which is why it is also forbidden for Namibian traders to accept crypto currencies as payment means.
Not so harsh words can be heard from Dubai. The Financial Market Authority of the Emirates is included in the list of those who officially warn their people before ICOs and call on possible investors. However, the Authority does not currently intend to regulate these types of product offerings.
Crypto currencies and DLT are highly complex and have their own unique risks, which are not easy to identify and understand. As a general rule, ICOs should be viewed as highly risky investments.
This statement does not allow any conclusions to be drawn as to the possibility of early regulation by the Gulf States. Nevertheless, the underlying skepticism about the new digital technology is the general trend of the reactions of state institutions to the current popularity of Initial Coin Offerings.
The price fell to a low of 2,513.24 EUR (3,001.99 USD) this week, but was able to catch up again and is now at 3,294.41 EUR (3,873.739 USD).
Image based on data from coinbase.com
Summary
- The Bitcoin course has fallen during the week.
- On September 12, the down trend began, which on September 15, at 2,513.24 EUR (3,001.99 USD) led to a low since the beginning of August. However, the course was then able to recover.
- First interesting short-term resistance at 3,284.73 EUR (3,923.51 USD) is currently being tested, the most important short-term support is at the week's minimum with 2,513.24 EUR (3,001.99 USD).
The week was just a rollercoaster for those investors who had just entered in August or even September: The latest developments in Chinese exchanges, which were not quite out of nowhere, as well as the comments of JP Morgan's CEO Jamie Dimon, led to a great uncertainty in the market which led to a loss of value of over 1000 EUR (1194 USD). As sales are a good reason to buy on the markets today, the price has now recovered and increased by around 700 EUR (836 USD). Currently, the course moves cautiously on an upward trend (shown in blue) and is above the exponential moving average over one or two days.
The MACD (second panel) is positive again thanks to rebounds, as is the MACD line (blue) above the signal (orange).
The RSI (third panel) stands at 62 and is bullish.
The analysis of the movements in the 60min chart speaks a bullish language. A first important support is described by the uptrend and is at 3,208.16 EUR (3,832.05 USD). Should this be broken, the support at the weekly minimum, ie at 2,513.24 EUR (3,001.99 USD), would be to be overcome for a resume of the dramatic downtrend of the last days. Here, in addition, the supports defined by the exponential moving mean values stand in the way. The first interesting resistance is currently being tested and is at 3,284.73 EUR (3,923.51 USD), which was the original starting point of the downfall. Overcoming the week's maximum at EUR 3,714.80 (4,437.22 USD) would be a sign of a sustained upward trend.
The long term course development
Let us consider the 240min chart as the first to assess medium and long-term developments:
Image based on data from coinbase.com
The events of the past two weeks have led to a trend reversal: in the medium term, we are in a downward trend. The price has fallen below the exponential moving average of the last one or two weeks. These two lines formed a death cross on September 10th.
The MACD is negative according to these trends, but thanks to the rebound the MACD line is above the signal. The RSI is at 52 neutral to slightly bullish. In the medium term, the situation is bearish. However, as you can see on the RSI and the MAVD line above the signal, there is hope of a trend reversal. In order for this to happen, the support has to hold, with the main support at 3,099.85 EUR (3,702.68 USD) - falling below this value would end the previously described timid upward trend. The most important resistance is currently described by the exponential moving average over two weeks, which is consistent with the resistance of the current downtrend and is 3,456.79 EUR (4,129.03 USD). While further support in red and resistances in green have been included, these are the ones that currently determine the medium-term course development.
Let's take a look at the 1D chart:
Image based on data from coinbase.com
As you can see, the course has really crashed after a successful test of the 23.6% Fib retraction level regarding the development between the end of March and the end of August. After a short-term test of the 50% Fib retraction level, the price could rise on this bounce and again over the exponential moving average of the last two months.
The MACD is negative due to the recent course development and the fall below the exponential moving mean values - more precisely, the MACD line - as is the MACD line under the signal. The RSI is still bearish after a short fall into the overpriced area.
Overall the long-term forecast is slightly bullish. Although the indicators are rather negative, if the current situation is compared with the middle of July, there is reason to hope that the downward trend came to an end again. The most important support is described by the 38.2% Fib retraction level and stands at 2,956.61 EUR (2,531.58 USD). The most significant resistance is at the 38.2% fib retraction level, which currently equals the exponential moving average over one month at 3,425.50 EUR (4,091.66 USD).
Disclaimer: The course analysis is from the morning and can have changed since. The price estimates presented in this post are not a recommendation to buy or sell. They are merely an estimate of me.
I wish you all a lovely Saturday and a great Weekend!!!
Best regards
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