Monex Crypto Market Weekly: March 15

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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. Due to the difference in time zone, we’re able to share Friday’s report today.

Summary

  • Bitcoin (BTC) has little direction around the $3,850 level.
  • Stellar (XLM) and Lisk (LSK) have rallied, but with only limited impact on the broader cryptocurrency market.
  • Will the range-bound market continue next week? We’re watching $3,950 as the top of its current range and $3,675 as the bottom.

Market Trends This Week

BTC fell rapidly this week and found a solid bottom. However few buyers stepped in and market prices remained heavy. There were concerns about North Korea possibly stealing virtual currency through cyber attacks. Attention also focused on Invesco’s block chain ETF launching on the London Stock Exchange. Still these had little impact on BTC.

The real action this week was rallies in altcoins like Stellar (XLM) and Lisk (LSK), but that hasn’t been enough to lift the broader market.

Bitcoin (BTCUSD), with hourly candles.
Bitcoin (BTCUSD), with hourly candles.

Topics This Week

  • Proposal on Twitter that Vitalik impose gas charges on wallet transactions. (3/8)
  • NEM Foundation reports progress on reorganization. (3/8)
  • Fidelity starts offering virtual-currency custody service to some customers. (3/8)
  • Swissquote will allow transfers from external wallets starting on March 21. (3/8)
  • The German Finance Ministry releases a report on the regulatory treatment of electronic securities and virtual currencies. (3/8)
  • It is suspected that North Korea has stolen more than $500 million of virtual currency through cyber-attacks. (3/8)
  • Binance’s CEO suggests on Twitter potentially opening a new virtual-currency exchange in Argentina. (3/9)
  • Samsung publishes a Galaxy S10 compatible wallet and Dapps to the store. (3/10)
  • Reports indicate the Swiss Stock Exchange (SIX) will start the world’s first Ripple (XRP)-linked exchange-traded product. (3/11)
  • Invesco launches blockchain ETF trading in London. (3/11)
  • US Treasury imposes economic sanctions on Russian banks because of support from Venezuela. (3/11)
  • Ground X, a subsidiary of South Korea’s Kakao, raised almost $90 million with an ICO pre-sale. (3/11)
  • Coincheck adds a chat function to its iOS app. (3/11)
  • Remixpoint makes BITPoint a wholly-owned subsidiary. (3/11)
  • Thai SEC approves the first domestic management of an ICO portal. (3/12)
  • Binance’s official wallet supports credit card payment and XRP. (3/12)
  • Account linking between Coinbase.com and Coinbase wallet is made possible. (3/12)
  • Ripple investment division Xpring cooperates with block chain game company Forte. (3/12)
  • Bittrex International announced its that it will carry out the first initial exchange offering (IEO) on March 15. (3/12)
  • Basel Committee on Banking Supervision (BCBS) warns banks around the world of virtual-currency risk. (3/13)
  • NASDAQ provides technology to U.S. virtual-currency startup Bcause. (3/13)
  • Coinbase Custody integrated services with its OTC desk. (3/13)
  • SEC chairman Clayton indicates support for the view that Ethereum (ETH) isn’t a security. (3/13)
  • Stellar (XLM) is listed on Coinbase Pro. (3/14)
  • The main net of Cosmos Hub is launched. (3/14)
  • Payward Asia Co., Ltd. becomes a Type II member of the Japan Virtual Currency Exchange Association (JVCEA). (3/14)

Next Week’s Market Forecast

Will BTC’s range-bound drift continue? Although prices haven’t changed much since the start of 2019, volumes have almost doubled. Neither bulls nor bears have been able to take control, and the long-short ratio is balanced. Given the neutral backdrop, it won’t be easy to see movement unless large holders increase their trading or something major occurs globally.

We continue to watch $3,950 as the top of the current range and $3,675 as the bottom.

Next Week’s Topics

  • 3/18: ARK Deployer v2 will be released.
  • 3/18-19: Learn2Decentralize will be held in Malta.
  • 3/19-21: Money 20/20 Asia will be held in Singapore.
  • 3/21: OKEx C2C Launch Event will be held in London.
  • 3/21: OKEx Talks 2019 will be held in Taiwan.
  • 3/22: Blockchain & Bitcoin Conference will be held in Prague.
  • 3/22-24: Mallorca Blockchain Days will be held in Palma.
  • 3/24: STEEM will launch Main Net.

Industry Related Trends

Regulatory Trend: JCBA Announces Recommendations for New ICO Regulations

On March 8, the Japan Virtual Currency Business Association (JCBA) announced recommendations on new ICO regulation.

One topic is the arrangement of issues for expansion of virtual currency that can be handled domestically. It also looks to clarify regulatory targets of the Financial Instruments and Exchange Law and the Fund Settlement Act, along with policies on security and utility tokens.

The document looks into the handling of stable coins, another recent subject of discussion. It stated they should be treated the same as other virtual currencies.

JCBA wants a flexible framework based on appropriate regulations in order to spread initial coin offerings (ICO) as a means of financing. So, the recommendations called for the partial exclusion of regulations and the need for mitigation measures.

Based on the contents of the “Study Group Report on Virtual Currency Exchange Business etc.” announced recently, the FSA will establish its policy on virtual currency regulation. Are palliative measures in sight, such as those claimed by the JCBA?

Technology Trend: Monero Implements CNv4 Hard Fork

On March 9, the anonymous currency Monero (XMR) implemented the CNv4 hard fork.

The update first improved the proof-of-work-based hashing algorithm Cryptonight R and made it more robust for application-specific integrated circuits. As a result, ASIC miners are eliminated, and there is a case where the hash rate may drop significantly after hard forking.

Measures were also taken against the “big bang” attack, which increases the block size capacity. It uses a large number of transactions to overload the network. Developers addressed this problem with changes to the block-size algorithm.

Furthermore, the addition of a function to automatically add a dummy transaction ID to a block makes it difficult to identify the actual transaction from the outside. The anonymity of the transaction has been improved, as well.

In addition, a partial change of the monetary format in the anonymous transaction RingCT was performed.

With the hard fork, miners are being asked to update their software. It remains to be seen how far the reduced hash rate will recover.

Individual Company Trend: Trezor Refutes Ledger’s Claim of Wallet Vulnerability

On March 11, hardware-wallet manufacturer Ledger claimed on its blog of a potential vulnerability in rival Trezor’s products. The post said products can be forged, the side-channel attack can guess the PIN code and data in flash memory can be physically hacked.

The next day, Trezor explicitly refuted the claim. It said no such attacks can be launched remotely without direct theft, and are of little importance to hardware-wallet users. In the blog, according to Binance’s research on virtual currency threats at the end of last year, 66% of respondents consider remote attacks a major problem. Meanwhile, only 6 percent encounter physical attacks.

Trezor added a word of appreciation to Ledger and expressed a desire to work together to make safe and user-friendly products. Both are major manufacturers of hardware wallets for cryptocurrencies.

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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.