Market Outlook

30-12-19 Daily Crypto & Metals Technical Research Report

Bitcoin

The cryptocurrency market has entered a dead period of Christmas and New Year holidays. Even as cryptocurrency markets never sleep and operate in24/365 mode, traders and investors tend to abandon the scene during major holidays. As a consequence, low, slow activity leads to low volumes andthin liquidity. While usually, the holiday season is a dull period on the markets, unpredictable events may trigger strong price movements. However, all that remains for us is to hope that no bombshell drops on the markets before the liquidity is restored.

During X-mas week, Bitcoin oscillated in a range limited by $7,700 on the upside and $7,000 on the downside. Recovery attempts have been limited so far, though Bitcoin’s market share increased to 68.9% as major altcoins were struggling even more. The total capitalization of all digital assets in circulation is registered at $190 billion, unchanged from this time on the previous week. Bitcoin stayed unchanged on a week-to-week basis, while
Ethereum and Ripple lost 3% and 2% of their respective values.

The third halving on Bitcoin’s block chain is scheduled in May 2020; however, the industry has already started getting ready for the event. The forecastsrange from collapse to non-event and new historic highs. Those who say that halving will not affect the prices point out that it is totally priced in. Doomsayers are worried about miner’s exodus. Also, they suspect Bitcoin may follow the same path as Litecoin that lost over 70% of its value after the halving.
Meanwhile, optimistic forecasts are based on stock-to-flow growth. The indicator shows how many years are required to achieve the current stock at the current production rate. Basically, it reflects the deflationary nature of Bitcoin and provers thee point that the higher the number, the higher the price.

Central banks and regulators continue exploring the idea of issuing state-backed digital assets. China is leading the pack with its digital yuan. According to the officials, the project is at the final stage will soon be launched in a pilot mode. The government also considers expanding its Forex trading regulation in the cryptocurrency industry to curb capital control violations and prevent manipulations. Beijing revealed the plans to launch digital yuan in the wake of Facebook’s Libra project.

Russia is another country that is actively experimenting with stabelcoins. The head of the Russian central bank Elvira Nabiullina confirmed that the regulator had been testing various stabelcoins within the regulatory sandbox. However, the governor also repeated its negative stance towards cryptocurrencies and emphasized that they would never be allowed as a means of payment on the territory of Russia. Notably, the country is yet to pass legislation on digital assets.