Monex Crypto Market Weekly: March 8

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This post is a translation of the weekly cryptocurrency analysis by Crypto Lab, a wholly owned subsidiary of Monex Group (Tokyo, Japan). Monex is the parent of TradeStation Group. Owning to the difference in time zone, we’re able to share Friday’s report today.

Summary

  • Bitcoin (BTC) is expected to recover with the rally of Litecoin (LTC) and Binance (BNB). Still, there are scenarios where prices may decline due to risk aversion. That’s especially true if equities or Ethereum (ETH) drop.
  • LTC surged as the Venezuelan government’s international remittance service started.
  • BNB will soon be affected by the third announcement of the token sale and the use of the DEX test net.
  • Is a breakout coming in the next week? Keep watching BTC around $3,950.

Market Trends This Week

BTC followed Ripple’s (XRP) rally earlier in the week, but is now pausing as stock indexes come under pressure. Coupled with weakness in ETH, BTC encountered selling pressure around $3,670. Then gains in LTC and BNB lifted BTC toward $3,950.

Bullish catalysts also emerged, including the start of service of LGO Markets — a virtual currency exchange for institutional investors.

XRP temporarily moved higher after Coinbase announced trading in the payment system will be offered not only to professional traders but also to general investors.

LTC soared on March 5, drawing more buyers as it climbed. At one point it was up 20 percent in BTC terms. Some market participants attribute the move to Venezuela using BTC and LTC for international money transfers. Others credit technical factors. Regardless, LTC continues its relative strength against BTC since December due to the LightningNetwork implementation and expectation for better anonymity.


Bitcoin (BTCUSD), with hourly candles.

BNB has rallied significantly due to Binance announcing details of a successful token sale and the start of the DEX test net. That put BNB up 40 percent in BTC terms.

Topics This Week

  • ETH: Constantinople hard fork safely mounted. (3/1)
  • Coinbase also offers XRP transactions for general investors. (3/1)
  • ETH developers discuss the necessity of hard fork coordinator. (3/1)
  • Rakuten Wallet Corporation announces capital increase as company name changes. (3/1)
  • Major retailer Carrefour utilizes block chains to track circulation of dairy products. (3/1)
  • Three Swiss companies completed real estate transactions using domestic first block chains. (3/1)
  • LGO Markets, a virtual currency exchange for institutional investors, started service. (3/4)
  • Circle acquired SeedInvest, which handles the cloud funding business. (3/4)
  • TRON and Tether have joined to issue TRON-based USDT. (3/4)
  • Tradingview adds Huobi’s virtual currency index HB10 to the list. (3/4)
  • Ernst & Young announces an accounting tax tool for virtual currency. (3/4)
  • Venezuela’s government started international remittance service using BTC and LTC. (3/5)
  • The Swiss Stock Exchange started handling ETP-linked ETP. (3/5)
  • The Russian virtual currency related bill was adopted at the second reading. (3/5)
  • Cryptect Corporation established Protoption Inc. as a company selling virtual currency options. (3/5)
  • Opera is preparing for providing iOS version virtual currency wallet built-in browser. (3/5)
  • Binance announces details of its third token sale. (3/5)
  • Huobi began handling XRP on OTC platform. (3/6)
  • SWIFT began a demonstration experiment of electronic ballots using block chains. (3/6)
  • SBI Virtual Currency announces postponement of board transfer. (3/6)
  • Mercury-FX succeeded in commercial use of Philippine remittance using x-Rapid. (3/6)
  • Argentina and Binance Lab cooperate in supporting domestic block chain companies. (3/6)
  • Binance DEX test net usage campaign started. (3/7)
  • South Korea establishes special Task Force to prevent cryptocurrency-related crimes.(3/5)
  • Thai Petroleum Company tests blockchain energy trading platform.(3/7)
  • eToro launches crypto trading platform & wallet in the U.S.(3/7)

Next Week’s Market Forecast

Will BTC keep pushing the upside? Sentiment has improved in the last month and the market is steady, but there aren’t a lot of apparent factors to strengthen the trend. Under such circumstances, it’s likely that price action will follow movement in the volatile altcoins. However, their impact on BTC’s price trend is weak. That suggests we’ll remain in a state of waiting. Keep watching BTC around the $3,950 level, with support around $3,670.

Next Week’s Topics

  • Asia Crypto Week opens in Hong Kong. (3/11-17)
  • CBOE futures XBTH 19 final trading day. (3/13)
  • Token 2049 is held in Hong Kong. (3/13-14)
  • THETA will launch the main net. (3/15)

Industry Related Trends

Regulatory trend: Virtual currency industry also subject to FATF review

On March 4, Diamond reported that the Fall Friendly Financial Task Force (FATF) is dealing with the financial industry. Unlike in 2008, cryptocurrencies won’t be excluded this time

FATF officially announced a draft on virtual currency regulation last month. The document included the need for licensing related businesses and others. FATF’s recommendations for global standards have been updated since 2012 to establish a framework against money laundering and terrorist financing. Last October, the description of virtual currency was added to the section on new technologies corresponding to paragraph 15. This draft shows an interpretation of this paragraph 15, covering national regulations and action guidelines for monitoring the risk of money laundering and terrorist financing.

Although there is a possibility that this draft may be modified in part, it’s expected to be finalized as FATF’s official text in June.

Technology trend: Blockstream releases C-Lightning v0.7

On March 1, Blockstream, which deals with technology development of block chains based in the United States, released c-lightning v 0.7.

C-lightning is a Lightning Network (LN) module that improves scalability of BTC written in C, and the code is published on Github. By using public code, developers can smoothly perform node management and application using LN.

The main improvement of this update was the inclusion of plug-in functionality. This lets developers add their own functions to c-lightning in arbitrary languages and develop more flexibly. The addition of Routeboost function and bug fixes were made to enable sending and receiving of payment via private channels.

LN applications are being considered for micropayment scenarios. (A recent case included the use of LN to buy pizza.) As the expansion of tools such as c-lightning progresses, it will increase odds of more day-to-day uses of blockchain.

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David Russell is VP of Content Strategy at TradeStation. Drawing on nearly two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them appraised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.