Dear Teroxx Community,
This week we saw a digital asset market that experienced minor setbacks and failed to retest the $50,000 resistance.
Weekly overview
As usual, we are also providing detailed videos for those who want to delve deeper into the subject.
Latest crypto news
As part of its partnership with Arca Labs, Securitize will initially bring a tokenized mutual fund to the blockchain. Arca Labs, the innovation arm of crypto investment firm Arca, has partnered with blockchain company Securitize to launch tokenized financial products. According to Arca, this means the “Arca U.S. Treasury Fund” is now the first U.S. government bond fund to be recorded on the blockchain. The investment fund is subject to the same regulations as open-ended mutual funds, except that the investment here takes place via the security token called “ArCoin.”
Tokenized financial products are becoming increasingly popular and thus represent another growth market.
Ether futures are currently more in demand by institutional investors than bitcoin futures, demonstrating both a change in sentiment and generally weaker demand.
As a result, Ethereum investment products have become increasingly popular. So, at least on an institutional level, the previously second-ranked cryptocurrency may be starting to take a bite out of the market leader. “Demand is currently developing in stark contrast,” as a Bloomberg analyst notes in this context. When demand is high, the price of BTC futures is usually higher than the bitcoin price, because management fees and interest still need to be assessed for the former.
In contrast, according to CME data, the difference between ETH futures and the Ether price has risen to 1% over the past 21 days, “indicating significantly healthier institutional demand for Ethereum than for Bitcoin.”
Since 2009, China and Hong Kong have imposed crypto bans or otherwise caused FUD in the crypto market over 19 times. With the news from the Chinese central bank, there are now a total of eleven news stories coming directly from Chinese and Hong Kong regulators enacting or threatening to enact a ban on crypto, exchanges, or mining. There have also been eight major incidents of fake news and other media reports that have impacted the crypto market so far. In addition, there have been a handful of other incidents, such as hacking attacks and decisions by crypto companies in the country, that have led to declines. In total, China has issued crypto bans or otherwise caused FUD in the crypto market over 19 times since 2009. Prices often only react in the short term and emerge stronger from these discussions in the long term.
Technical term of the week
Illiquid supply: Describes the scenario when a large part of an asset (e.g. Bitcoin) is not freely tradable on the exchanges, but is stored offline in cold-storage wallets. This often leads to high demand that cannot be met.
Crypto Market
After the market recovered from the “flash crash” bitcoin rose to ~$48,000. However, these levels could not be penetrated with high volume, failing to test resistance at ~$50,000 and resulting in global negative market openings due to the “Evergrande crisis”. Digital assets suffered from this as well, resulting in a negative week. Bitcoin was able to form a support at ~$40,000 and thus confirmed these levels as an important support level. A big recovery did not set in, but the market entered a strong consolidation phase from which new volatile movements can be expected.
Bullish outlook: $42,000 – $44,000 to establish would be a positive aspect for a successful monthly close and bullish sentiment for the coming weeks.
Bearish outlook: Sell-offs and setbacks below $40,000 in bitcoin could make the overall market sentiment bearish.
