The Leading Cryptocurrency Stories for 4th April 2018

The Leading Cryptocurrency Stories for 4th April 2018

The cryptocurrency market started recovering late Monday after nearly two weeks of decline. While there were no major negative developments that sparked the sell off, the liquidity in the market dried considerably. That made it easier for the short sellers take advantage of the underlying weakness in the market. The liquidity dried because of the measures announced by the European Securities and Markets Authority (ESMA) to protect cryptocurrency investors. ESMA issued a guideline curtailing the leverage offered for cryptocurrency trading to a maximum of 2:1. Furthermore, the guideline also calls for compulsorily liquidation of position when margin money falls below 50% the actual requirement.

In South Korea, the Ministry of strategy and finance is planning to announce the taxation framework for cryptocurrencies by June end. The new tax laws will come into effect in 2019. Notably, Russia is planning to levy a tax rate of 13% on activities related to cryptocurrencies. In this regard, the country is expected to enact a law later this year. South Korea’s neighbour Thailand has announced a 7% VAT and 15% tax on cryptocurrencies

Let us look at the developments related to major cryptocurrencies:
 
Bitcoin (BTC)
Bitcoin quickly bounced back above $7,000 on Monday, as optimistic investors rushed to invest in the cryptocurrency, with hope of a strong bullish reversal. Notably, Bitcoin opened the first quarter of 2018 at $14,112 and closed at $6,973, reaching a quarterly high of $16,537 on January 8th. During the first quarter, Bitcoin lost more than half of its value. The closing price on March 31st is 65% lower than the all time high of $20,089 recorded on December 17th. A barrage of bad news (regulatory whips, hacking incidents, etc.,) caused the decline in the first quarter. According to researchers at ETH Zurich, the value of Bitcoin is based on the number of people who actually use it. Going by this theory, the organisation believes that the coin is still overvalued. The researchers have estimated that Bitcoin is trading at least four times its actual value.  Read more here.
 
Ethereum (ETH)
Ethereum fell below $400 last week after Bitmain, the largest mining hardware manufacturer, announced the release of Antminer E3, an ASIC chip based miner, specifically designed to mine Ethereum. Presently, ordinary graphics card is used to mine Ethereum. The launch of a custom-built ASIC miner would heavily centralise the market around a few big players. To avoid such a scenario, on March 30th, Ethereum developer Piper Merriam presented the idea of a possible hard fork in the Ethereum Protocol to invalidate ETH ASICs. The plan (Ethereum Improvement Proposal EIP #958)  was presented on Github. In other news, Ethereum founder Vitalik Buterin donated $1 million to Ugandan refugees. Read more here and here. 
 
Ripple (XRP)
The cryptotoken, which is the native currency of the blockchain-based real-time gross settlement system, joined the hyperledger community made up of 231 organisations across 25 countries. Hyperledger is a an open source collaborative effort created to advance cross-industry blockchain technologies. The technology has gained significant traction as a multi-project, multi-stakeholder effort, and now includes 10 business blockchain and distributed ledger technologies. Read more here.
 
 

Our Forex Trading Plan

Bitcoin. Bitcoin has nearly made a double bottom in daily charts. Therefore, we prefer to open a long position in the BTCUSD pair using one of our trading accounts with Forex brokers. The oversold scenario indicated by stochastic oscillator is yet another reason to plan for a long position in the BTCUSD pair.

We prefer to enter near 7,100, with a stop loss order below 6,700. We would be looking for a price of 8,600 to offload our long position.

Bitcoin - Technical Analysis - 4th April 2018

 
 

Our Binary Options Trading Plan

Ripple. After recording a low of 0.40, Ripple (XRP) has bounced back above the major support level of 0.44. The Williams percentage range indicator is entering the bullish zone. Therefore, we are expecting the uptrend in the XRPUSD pair to continue.

To gain from the uptrend, we wish to invest in a call option offered by a dependable binary broker. The option contract should remain active for a period of one week. Furthermore, we would invest the cash, which we can afford to lose, only when the XRPUSD pair trades near $0.44 in major cryptocurrency exchanges.

Ripple - Technical Analysis - 4th April 2018

Disclaimer: The trading analysis offered here is our opinion. It is not provided as trading advice, merely an indication of our trading plan. We cannot guarantee success and we encourage traders to incorporate a strong money management strategy to limit losses. Please use this article as part of your own research before formulating strategies prior to trading.


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