ETH course analysis KW46 – Breakout to new heights?

The week saw Ethereum rise steadily to a high of 307.32 EUR (362, 38 USD).

Bitcoin secret has risen during the week

The short-term Triangle Pattern has now been finally breached. The short-term support is EUR 287.77 (USD 339.32), the short-term resistance EUR 307.32 (USD 362.38). Finally Bitcoin secret is back! The price has been very stable for several weeks. This week, however, a rally began which raised the price to values above 300 EUR (approx. 360 USD) – the first time since September 1st again. Currently the price moves on a small plateau, which does not endanger the fundamental upward trend.

The MACD (second panel) is positive according to the rally, but the MACD line (blue) is below the signal (orange). The RSI (third panel) was initially overbought and has currently dropped back to a still bullish 67.

The movements on the 60min chart speak a bullish language. The most important support of the week is described by the support of the uptrend and is at 287.77 EUR (339.32 USD). This week’s most important resistance is described by the weekly maximum and is 307.32 EUR (362, 38 USD).

The long-term cryptosoft trend

To put this rally into a broader context, the first thing we look at is the 240min chart: thanks to recent cryptosoft movements, the Triangle Pattern, which has been in place since September, has now been finally abandoned. It has been replaced by an uptrend whose very conservative cryptosoft interpretation is shown in blue here. The price is clearly above the exponential moving average over one (blue) or two (red) weeks.

The MACD is positive, as is the MACD line above the signal. The RSI is at overbought 77. In the medium term the situation is bullish as well. The support is roughly the same as on the 60min chart; it is also described by the uptrend and is at 260.57 EUR (307.25 USD). The Resistance corresponds to the maximum reached in early September and is 329.84 EUR (388.93 USD).

To put these developments in a long-term context, we will close with a look at the 1D chart:

We can see that the recent rally still fits into the price of the Triangle Pattern – but now, exceptionally, the resistance of the Triangle Pattern is being tested. The bullish forecasts on the short and medium term charts are therefore extremely interesting, as this could lead to a test of this resistance.

The MACD is positive, as is the MACD line above the signal. The RSI is bullish with 66.

Overall, the long-term forecast is bullish. Both support and resistance continue to be described by the triangle pattern. The most important support is 252.38 EUR (297.59 USD), the most important resistance is 308.63 EUR (363.92 USD).

Why the ETF debate is overheating and the SEC is in favour of Bitcoin

In recent weeks, the debate about a possible Bitcoin ETF approval or its decision date has led to heated discussions. The dried out crypto market is thirsting for new liquidity that an ETF approval by the US Securities and Exchange Commission (SEC) would bring. If a Bitcoin ETF promises a new rally for crypto investors, people who devote themselves to technology and are against a regulated crypto market see it as a misguided development.

If one has heard of Bitcoin in the non-crypto media in recent weeks, it was mainly Bitcoin ETF applications filed by several financial market players with the US Securities and Exchange Commission (SEC). So far, all applications relating to an exchange-traded index fund have been rejected by the authority. The hope that it could work out at the next decision dates in the next few weeks not only supports the Bitcoin price, but also awakens the sleepy greed of many crypto investors and those who want to become one.

Ethereum head Vitalik Buterin is angry against Bitcoin revolution

Contrary to the short-term positive price implications that some investors are longing for, there are also dissenters who do not want to hear about a Bitcoin revolution like this: https://www.forexaktuell.com/en/bitcoin-revolution-scam/. For example, Vitalik Buterin, the well-known head behind Ethereum, has unequivocally criticised crypto ETFs. The original motivation behind Bitcoin was the currency function and the associated global adaptation as a payment medium. The overemphasis of the investment case by ETFs damages more than it helps, as it directs the focus away from the actual functions of the crypto currencies.

Bitcoin loophole as a danger to crypto adaptation

The justification should by no means be seen as a purely idealistic one. There are also factual arguments, particularly of a technical nature, against crypto-ETF approval. If one recalls the hype phase at the end of 2017, then it becomes clear which dangers can arise from an enormous inflow of funds in a short period of time. The entire crypto ecosystem more or less collapsed under the enormous flood of transactions. Stock exchanges could only offer their services to a limited extent, transaction times and costs skyrocketed due to a lack of scalability and the security deficiencies of the Bitcoin loophole crypto service providers were serious.

Certainly, a lot has happened in the meantime and some shortcomings have been remedied. The scaling of Bitcoin and Ether, on the other hand, is hardly any further than it was then. Although there are now second-layer solutions such as Lightning, these are still far too impracticable to be used across the board. So if Big Money should flood the market with ETFs in a short time, then overheating of the ecosystem, especially in scalability, cannot be ruled out.

What is Bitcoin’s WKN?
In addition to the burden on the ecosystem, crypto-purists criticise the one-sided external impact on the general public. If Bitcoin is reduced to regulated funds and certificates, this damages the basic understanding of the crypto economy. If a Bitcoin fund is booked into the custody account of the house bank via a securities identification number (WKN), this is in absolute contradiction to the Bitcoin White Paper. A certain re-centralisation would take place, which would again make banks the central managers of assets. The narrative “Be your own bank” is thereby led ad absurdum. No one needs to know what a wallet or private key is for a Bitcoin ETF – the responsibility lies exclusively with the regulated financial services provider.

Non-crypto-purists see it the other way around. Their argumentation is that an ETF lowers the crypto inhibition threshold, i.e. promotes a broad willingness to deal with Bitcoin and Co. at all – ETFs as an entry drug for non- crypto affine.

Keep Cool
Bitcoin ETF or not – there are reasons for and against ETF approval. However, it must be clear that crypto ETFs are definitely coming. The question is only how fast. Accordingly, it can be quite positive if the SEC gives the current crypto ETF applications a basket so that the crypto ecosystem gets more time to further expand and stabilise its infrastructure. It is fortunate that no ETFs were approved during the hype phase at the end of 2017. Had there been 2017 Bitcoin ETFs, the overheating and subsequent drop height would have been even greater.

Bitcoin acceptance – Where does Germany stand in the international comparison?

Notwithstanding the fluctuating price developments of Bitcoin & Co., the general acceptance of crypto currencies continues to advance worldwide. Also the relevance of the blockchain as a technology is still on the advance with many promising projects. This realization now seems to be gradually reaching governments around the globe.

All over the world there are now Bitcoin ATMs to admire. Whether in the United States, on the island state Malta or also in Austria – in most different countries there is the possibility of exchanging Bitcoin at cash machines. Many people may wonder why they have never seen a Bitcoin ATM before. However, there is a simple reason for this: In the Federal Republic of Germany there are no publicly accessible machines. The regulatory hurdles for operating a Bitcoin ATM are far too high and include a BaFin license, among other things.

What is the status of the Bitcoin loophole?

In purely infrastructural terms, Germany does not seem to be one of the frontrunners of innovation and acceptance – at least as far as crypto currencies are concerned in this review by onlinebetrug. Nevertheless, there are of course many Bitcoin acceptance points in our country as well. The fact that the government and regulators in Germany are slowly getting an idea of how to use the Bitcoin loophole blockchain is shown in the Grand Coalition’s coalition agreement. But what is the general assessment of Germany’s position in an international comparison? The Blockchain Bundesverband made the following statement to BTC-ECHO:

“In an international comparison, the federal bloc sees Germany in an extraordinary position on the subject of the blockchain. Although we are a little behind in terms of adaptation and advance with pilot projects so far, we have two decisive factors. For this we have two decisive advantages: Berlin in particular is a natural gravitational point for the Blockchain community. This is demonstrated by the branch offices of the most renowned Blockchain companies, the high density of Blockchain experts, the very active community with countless Meet-ups and not least international players from all over the world who hold their conferences in Berlin and many other cities in Germany.

With regard to the acceptance of crypto currency as a means of payment, we on the part of the federal bloc will provide intensive information together with our members and seek dialogue with the different stakeholders.

The federal bloc also commented on its own role in the development of blockchain acceptance in Germany: “With the Blockchain community, the federal bloc has taken a leading role, prepared the topic for politics and laid the foundations for numerous pilot projects both in the public sector and in industry.

How far have other countries already gone in the news spy?

While the federal bloc sees Germany on a fundamentally good course, other countries are also constantly developing according to this review. Both in terms of blockchain adaptation and Bitcoin acceptance, there are pioneers worldwide who are already much further ahead than the Federal Republic. A role model for Germany in the news spy area could be the USA, for example, which has already been mentioned above. The majority of the US states has already dealt in detail with crypto currencies and the theory behind them. In many cases it came so already to a federal regulation.

Beside the USA above all the Eastasiatischen states are with the crypto use completely in front. Japan has become the largest trading centre for Bitcoin, and in South Korea crypto currencies are increasingly being used as a means of payment. Finally, the Bitcoin wave also sloshed across the southern Atlantic and arrived in Brazil. With more than 1.4 million Bitcoin users and various exchanges competing with each other, a flourishing blockchain ecosystem is emerging there. Brazil, like many Latin American countries, suffers from state inefficiency and a high rate of corruption. The blockchain could be a way out of this dilemma.

However, there are still states in which the use of crypto currencies is still very problematic. In addition to the strongly restricted use, as in the People’s Republic of China, crypto currencies are even declared illegal in 8 countries. These include the Muslim countries Morocco, Algeria and Bangladesh as well as the two Asian states Vietnam and Nepal and the South American states Ecuador and Bolivia. Macedonia is the only European country to appear in this group. While Germany is fortunately far away from these countries, there is still a lot of work to be done in terms of crypto-acceptance.

Light and Shadow around the Globe

In the past week a lot has happened around the globe in terms of regulation. In our regulation ECHO we look back at the end of the week and summarize what was said, thought or decided, when, where and by whom.

China: PBOC vice governor still tough on ICOs
China continues to maintain its tough stance on Initial Coin Offerings. Local Chinese media reported that Pan Gongsheng, a vice-governor of the Chinese central bank, spoke out in favour of sticking to the ICO ban. In the face of ever more fraudulent offers from the crypto sector, one must remain determined and enforce the applicable law.

EU: Fifth Anti-Money Laundering Directive enters into the news spy

The fifth EU Anti-Money Laundering Directive has become active this week: https://www.geldplus.net/en/the-news-spy-review/ This is the result of a press release issued by the EU Commission. The AML Directive is intended to provide a new regulatory framework for Europe’s regulatory authorities. Among other things, there will be greater transparency of the news spy exchanges and a stronger exchange of information with other EU institutions such as the ECB.

South Korea: New rules for dealing with blockchain and crypto currencies
The legislators of South Korea have published draft laws dealing with the regulation of crypto currencies. The documents also deal with the development of a strategy for the use of blockchain technology. According to KoreanTimes, the initiative comes from Song Hee-kyung, a deputy of the largest opposition party, the Liberal Party of Korea. The aim of the proposals is to prevent money laundering, cybercrime and data misuse.

India: No crypto ban, but strict regulation of the Bitcoin secret

According to the magazine Quartz, the Indian Ministry of Finance is to work on a regulation of crypto currencies. Read about it here: Is Bitcoin Secret a Scam? Read This Review Before You Sign Up! Denmach is no longer being considered a ban on crypto currencies. For this, one would probably like to classify Bitcoin secret crypto currencies as commodities and regulate them accordingly. One would probably like to try to trace the sources of trades and identify investors.

UK: Regulatory authority highlights potential of blockchain start-ups
Until now, it has attracted attention with warnings against crypto currencies, but now the British Financial Conduct Authority is showing that it has also recognized the potential of blockchain technology. Within the framework of a sandbox, FCA is initiating projects with a total of eleven companies from the blockchain and DLT sectors. New business models are to be developed and tested.

Shanghai: Stock exchange sees DLT regulation as urgent
The Shanghai Stock Exchange, one of the largest securities exchanges in the world, is considering using distributed ledger technologies for the stock market. In a paper published last week, the technology’s potential applications have already been analysed, for example in the registration of traders, the issue of new securities or the execution of trades. However, the DLT must first be sufficiently regulated before it can be used regularly.

Philippines: Two new Exchanges approved
Last week we reported that a total of 25 crypto-exchanges will be licensed for the Cagayan Economic Zone in the Philippines. Now the country’s central bank has accepted two new exchanges. According to Business World Online, Virtual Currency Philippines, Inc. and ETranss have been accredited as platforms and are now allowed to make Fiat crypto exchanges.

Canada study: Bitcoin more investment than medium of exchange

In July, the Bank of Canada published a study on the use of Bitcoin in Canada. The study was conducted from 12 to 15 December 2017 and is based on the 2016 Bitcoin Omnibus Survey (BTCOS).

In 2016, the Bank of Canada conducted its first study on the development of crypto currency usage. In two rounds, the researchers asked questions about Bitcoin ownership and public awareness of the crypto currency. Due to the increasing popularity of crypto currencies in 2017, the bank conducted a new study. The main objective was to measure the impact of Bitcoin on the financial market.

The results of the study show that the level of awareness of Bitcoin has risen rapidly from 2016 to 2017. While in 2016 65 percent of the study participants still knew the digital currency, the share rose to 85 percent in 2017. In addition, the number of Bitcoin users increased from 2.9 percent to 5.0 percent within one year.

Changed reasons for owning crypto currencies

The main reasons for owning Bitcoin in 2016 were the transaction benefits and the interest in the new technology. Only 12 percent of the study participants saw an investment in owning the digital currency. In contrast, 58 percent of the 2017 respondents cited the investment as the main reason for owning Bitcoin. The second reason given by 12 percent of the participants was “My friends own Bitcoin”. Transaction benefits and interest in new technologies, on the other hand, were only 10 percent.

Within one year, the reasons for owning Bitcoin as a means of transaction (39 percent to 10 percent) changed to its use as a facility (12 percent to 58 percent).

Increase in interest in Bitcoin within the company

The results of the 2017 study show that interest in Bitcoin has increased across all demographic groups. In particular, residents of British Columbia (93 percent) and Canadians with an income in excess of 70,000 Canadian dollars (92 percent) show greater awareness. Quebec has seen the largest increase within a year, from 49 percent to 77 percent.

The strongest increase in Bitcoin users continues to be among 18-24 year olds. Interesting is the increase in the use of Bitcoin in the age group from 45 to 54 years. The number of users increased by 2.6 percentage points.

In addition, Bitcoin owners are better acquainted than in 2016. However, the study shows that there is some catching up to do with regard to Bitcoin’s security knowledge. Only 13 percent of Bitcoin owners and only 3 percent of respondents who do not own a Bitcoin were able to answer the Bitcoin security question correctly.

The results of the study show that the reasons for using Bitcoin are changing. It remains to be seen how these dynamics and the increasing awareness of crypto currencies will influence the financial system in the future. However, Bitcoin’s ownership still seems very attractive as an investment.