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.
Summary
- Bitcoin (BTC) dipped below support at $8,000 before rebounding
- Seven major financial companies withdrew from Facebook’s (FB) Libra Project, including Visa (V), MasterCard (MA) and PayPal (PYPL).
- Ripple (XRP) continued to show bullish relative strength against BTC.
- BTC resistance is the recent high of $8,800 while support is at the recent low near $7,500
Market Trends this Week
BTC was firm early in the week after a partial trade agreement between the U.S. and China. A decline in the yen also supported prices. BTC then came under pressure when traders learned that seven major financial companies would withdraw from the Libra Association. It quickly broke under $8,000 before trying to stabilize, and is down 7 percent on the week.
Meanwhile, XRP continued to climb. The altcoin has gained momentum after the announcement of significant investments in the wallet company BRD and the Mexican exchange Bitso.
![Bitcoin (BTCUSD) chart, with hourly candles.](https://www.tradestation.com/insights/wp-content/uploads/sites/2/2019/10/BTCUSD_20191018-1024x546.jpg)
This Week’s Topics
- The Bank of England presents rules that FB’s Libra cryptocurrency and other digital-payment providers will need to follow. (10/11)
- Major companies including MA, V, eBay (EBAY) and PYPL withdraw from the Libra Association. (10/11)
- Pre-registration has begun for Gaia’s “Crypto Alchemist” strategic action game using blockchain technology. (10/11)
- MakerDAO announces new stablecoins secured by various cryptocurrencies. (10/12)
- The President of the Russian central bank says there is “no obvious need” for a national cryptocurrency at the moment. (10/12)
- Japan’s first Ethereum Developer Conference concludes. (10/12)
- XRP’s Xpring announced an investment of $750,000 in digital-wallet provider BRD to help users store, remit and purchase XRP. (10/12)
- The Lightning Network, once seen as a positive for BTC, has lost momentum as fewer people use it for payments. (10/13)
- The U.S. Securities and Exchange Commission blocks an allegedly unregistered digital token offering by Telegram. (10/11)
- Commodity Futures Trading Commission (CFTC) Chairman Heath Tarbet has recently described Ether (ETH) as a commodity. (10/14)
- Travel-reservation giant Booking.com (BKNG) announced withdrawal from the Libra Association. (10/14)
- Japanese payment companies ACD and QFpay came to an agreement on strategic alliances in a variety of businesses. (10/14)
- Honda Motor (HMC) and BMW have collaborated on a blockchain project to record payment information for expenses like parking and highway tolls. (10/14)
- Indian company InstaDAPP announced in early October that it raised $2.4 million to develop a smart wallet (10/15)
- Cryptocurrency exchange Coinbase announced the development of mobile apps for professional-trading platform users. (10/15)
- U.S. Treasury Secretary Steve Mnuchin speculates that several members of the Libra association likely withdrew because of regulatory concerns. (10/15)
- Libra Association holds a general assembly in Geneva prior to launch. (10/15)
- A G7 working group says that global stablecoins could present challenges to financial regulators. (10/15)
- Ripple invests in the Mexican exchange Bitso. (10/15)
- JR East Japan Startup and CBcloud announced a partnership to develop a seamless logistics business. (10/15)
- Digital asset-management company CoinShares launchs tokens representing digitized gold. (10/15)
- CME (CME) said Bitcoin futures have attracted more interest from institutional investors in the past year. The exchange noted a 61 percent increase in open interest. (10/16)
- Tagomi’s new crypto brokerage service claims to allow institutions to short sell cryptocurrencies more easily. (10/16)
- South Korea plans to use advanced technologies like blockchain for trade finance by 2021. (10/16)
- Libra head David Marcus addresses regulatory concerns. (10/16)
- SBI Security Solutions and NEC announced an alliance to experiment on the use of distributed-ledger technology. (10/16)
- Tokyo-based Kintetsu Group and Mitsubishi Research Institute will release a digital local currency using the blockchain technology next month. (10/16)
- The governor of Sweden’s central bank stressed the importance of Libra, calling its release a “watershed event.” (10/16)
- Technical analysts note that BTC’s break below the $8,000 level could lead to more downside. (10/17)
- Ernst and Young launches a blockchain tool to improve public-fund transparency and accountability. (10/17)
- Some French banking executives have stressed the need for a global standardization of crypto regulations. (10/17)
Next Week’s Market Forecast
Regulatory pressure against Libra has increased around the world recently. Along with high-profile defections like MA and PYPL, that’s weighed on the price of BTC. Investors will be watching to see if BTC can hold the $7,500 level. Prices could see further weakness if bearish news continues to surface about Libra.
From a stock perspective, investors are preparing for third-quarter earnings from many companies in the U.S. and Japan. Cryptocurrency prices may be impacted if these events move equity markets.
Investors should watch the recent high of $8,800 and the recent low near $7,500.
Next Week’s Topics
- 10/21-22: Pantera Blockchain summit in San Francisco
- 10/27-30: Money 20/20 conference in New York