A Tipping Point for Cryptocurrencies; the US Investigates Price Manipulation

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by | 25th May 2018 | 0 comments

Bitcoin and Ethereum are facing a tipping point this week as the cryptocurrencies fell to multi-week lows and are testing crucial support levels. All of that amid news coming from the US that the Justice Department opened a criminal probe amid price manipulation.

The federal prosecutor focuses on illegal practices that can influence prices. The wrong actions would be spoofing and flooding the market with fake orders to affect other traders into buying or selling their assets.

The Commodity Futures Trading Commission is also involved in the investigation that it is the early stages. Remember that the CFTC launched new guidance over cryptocurrencies derivates earlier this week.

Germany to approve Cryptocurrencies

Deutsche Boerse, the Frankfurt Stock Exchange owner, is working to add cryptocurrency assets to its products. However, they still have to understand the crypto nature better.

“Before we move forward with anything like bitcoin we want to make sure we understand the underlying transaction which isn’t the easiest thing to do,” Jeffrey Kessler, company’s head of clients, said Wednesday.

Singapore asks crypto exchanges to be careful with digital tokens

“If the digital tokens constitute securities or futures contracts, the exchanges must immediately cease the trading of such digital tokens until they have been authorized as an approved exchange or recognized by market operator by MAS,” said the Monetary Authority of Singapore in a press release.

The Singapore regulator warned eight cryptocurrency exchange to stay away or cease, from trading digital tokens as they could be classified as securities or futures.

Also, “MAS has reiterated that digital token issuers, intermediaries, and platforms that offer, facilitate or trade digital tokens are responsible for ensuring that they comply with all relevant laws.”

MAS also warned firms about ICOs as could represent securities.

Bank of Spain says cryptos poses more risks than benefits

Spain Central Banker Luis Maria Linde affirmed that although he is a believer in the blockchain technology, cryptocurrencies are currently passing more risks than benefits.

He called crypto assets “those spurious novelties that do not provide significant improvements and that should be tackled as soon as possible,”

Linde affirmed that cryptos “have low acceptance as a means of payment, suffer extreme volatility, present multiple operational vulnerabilities and have been related to fraudulent or illicit activities in many cases.”

BTC/USD tests the crucial dynamic support at 7,350

Early on Wednesday, Bitcoin fell to 7,270, its lowest level since April 12, before bouncing back to close Thursday at 7,585, slightly positive. However, the first test of the crucial dynamic support at 7,350 was done.

The pair is testing a dynamic line coming from September 2017 and the first week of April 2018 at 7,300. After a first attempt, it is now trading 0.65% down on Friday. BTC/USD is posted to close the week 12% down.

If BTC/USD breaks below that level, next supports come at 7,000 and the crucial 6,600.

Expectations for recovery are very limited as the pair remains now below the 8,000 and 8,600 areas. However, if the unit clears up those levels, next resistances are at 8,800, 9,000, and 9,500.

ETH/USD closed Thursday positive, but it is not the most significant story

ETH/USD Daily Chart - 25-05-18

Ethereum managed to bounce from the essential static support of 560.00 after an initial attempt to extend losses for the fourth day in a row and to break that price.

However, the line is strong, and the pair bounced back to close Thursday in the positive field just at the 600.00 area. ETH/USD is now trading 1.80% down on Friday at 690.00.

A break below this level would mean that the doors are open for the 500.00 level. There are not significant buyer areas between 560.00 and 500.00 levels.

Below that, check the 465.00 and 400.00 areas.

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