Bitcoin hit four-week highs in Asian hours but continues to underperform when compared to alternative cryptocurrencies (altcoins).
Having scaled a long-term bearish trendline, the world’s largest cryptocurrency by market capitalization rose to $9,021 at 07:30 UTC – the highest level since March 22, according to CoinDesk’s Bitcoin Price Index (BPI).
As of writing, bitcoin (BTC) is changing hands at $8,700 – up 34 percent from the April 1 lows below $6,450. The market capitalization hit a one-month high of $152 billion earlier today and was last seen at $148 billion, according to CoinMarketCap.
But BTC’s rally, though impressive, looks flat when compared to the performance of the top 25 cryptocurrencies by market capitalization.
Data source: CoinMarketCap
Clearly, it has been the altcoin show so far. The lesser-known cryptocurrencies like populous are leading the cryptomarket rally.
EOS is now the fifth largest cryptocurrency by market capitalization, courtesy of the 106 percent price rise from April 1 low. Litecoin has dropped to number 6. Meanwhile, bitcoin ranks fourth from the last, despite having rallied 34 percent since April 1.
BTC’s underperformance could be an indication the cryptocurrency is fueling the rise in the altcoins. Moreover, most altcoins are traded against BTC. So, investors pouring money into crypto markets tend to buy BTC first and then rotate the money into altcoins. The recent drop in the bitcoin dominance rate from 45.62 percent to 37.98 percent (today’s low) also seems to suggest so.
History shows the altcoins surge happens after BTC reaches dizzy heights. For instance, BTC rally looked overdone in December and was followed by a rotation of money into cheap altcoins in late December and early January.
However, this time, the alternative cryptocurrencies have outshone bitcoin at a time when the crypto market leader is recovering from a three-month sell-off. This indicates growing confidence in the alternative currencies and also adds credence to the argument the crypto market has bottomed out.
Moving forward, the crypto markets could remain solidly bid as the world’s largest cryptocurrency has witnessed a major bullish breakout.
Bitcoin daily chart
The above chart (prices as per Bitfinex) shows:
- The long-term descending trendline has been breached in a convincing manner, signaling a long-term bullish-to-bearish trend change.
- The 5-day moving average (MA) and the 10-day MA are trending north, indicating a short-term bullish setup.
- The 200-day MA resistance is lined up at $9,737.
Despite the pullback from $9,060, the outlook remains bullish. Cryptocurrency may crowd out weak bulls (risk-averse traders) by revisiting the trendline support (former resistance) before finding acceptance above the $9,000 mark.
The bullish breakout suggests the cryptocurrency will likely test 200-day MA hurdle of $9,737 in the short-run.
Only a daily close (as per UTC) below the ascending (bullish biased) 10-day MA would signal bullish invalidation.
Bitcoin trading platform LedgerX has seen a sevenfold increase in volume in the six months following its launch of cryptocurrency derivatives.
Chief operating officer Juthica Chou told CoinDesk that the startup has seen roughly $7.5 million traded weekly through 700 swaps and options contracts. Since the platform launched its derivatives products, it has cleared $130 million notional – meaning the total number of assets traded at their spot price during the time of the transaction.
LedgerX kicked off trading of its regulated swaps and options contracts last October, after receiving approval from the U.S. Commodity Futures Trading Commission in July of 2017. Within its first week, the startup saw 176 contracts traded with a notional value around $1 million, as previously reported.
Since then, average trade volume has grown an average of 40 percent month-over-month, Chou said. Currently, 2,000 contracts are of open interest, with the longest-dated active options being $15,000 and $25,000 strike calls slated to expire in December 2019. In other words, the investors holding those contracts can purchase the assets if bitcoin reaches those levels before next December. However, traders will only make money if bitcoin does actually exceed that level, as previously reported.
Chou said the cryptocurrency market’s recent dip did not have a significant impact on swap and options trading, explaining:
“Significant corrections remind people that there are ways to monetize expected volatility even when price goes down and we’ve seen that reflected in our trading activity. Our sophisticated participants are not just buy-and-hold people, let me put it that way.”
LedgerX has 90 individual and institutional traders making up its participant base, she said. Both younger, relatively newer traders and more traditional ones trade on the startup’s platform.
While LedgerX only trades bitcoin swaps and options, the company is planning to expand, Chou said. Specifically, the startup “plans to add ethereum support in the near future.”
Ripple’s XRP token has gone from the worst performing top-5 cryptocurrency to the best performer in just one week.
As of writing, the world’s third-largest cryptocurrency by market value is trading at $0.6574 – up 33.66 percent week-on-week, according to CoinMarketCap.
The news come, of course, as the wider crypto markets have regained poise over the last week. But while the total market capitalization of all cryptocurrencies is up 30 percent week-on-week, XRP has outpaced even that notable recovery.
The table below shows how XRP fared compared to its peers over the last week:
XRP had a disastrous start to the year, dropping 77.77 percent in the first quarter. The token had dropped by 87.86 percent as of April 1 (no joke) – numbers that made it the worst performer in the top 5 at the time.
However, XRP had been looking very oversold, as per the daily relative strength index (RSI), and a rally was perhaps inevitable.
News flow may have also played a role in the gains, with CoinDesk reporting last week that Spain-based banking giant Santander is launching One Pay FX – a cross-border payments app developed in partnership Ripple. The news garnered lots of attention from the investor community and may have put a bid under XRP. It’s worth noting, though, that the application does not use XRP token.
Looking ahead, there is widespread belief that Wall Street bigwigs like Soros and Rockefeller are about to kick start another bull run in crypto markets. Ripple, with its multiple partnerships with banks and other financial institutions, might be best suited to benefit from a resulting inflow of money into the crypto space.
The technical charts, too, indicate that XRP could continue to outperform bitcoin in the near future.
XRP/BTC daily chart
The above chart (prices as per Bitfinex) shows a Bollinger band (+2 and -2 standard deviations from the 20-day MA) squeeze, followed by an upside breakout on April 12.
A squeeze occurs when volatility falls to very low levels and the Bollinger bands narrow into a tight range. These periods of low volatility (range trading) are often followed by periods of high volatility (range breakout).
Note that XRP’s volatility on April 9 reached the lowest levels since late November, hinting at the breakout move seen on Saturday. Furthermore, the daily RSI is biased to the bulls.
Taking all this into account, XRP may see a more gains against BTC over the next couple of weeks.
- XRP/BTC is likely to test 0.00012-0.00012472 BTC (Feb. 14 high) over the next couple of weeks.
- However, a break below 0.000074 BTC (20-day MA) would abort the bullish view.
- A daily close (as per UTC) below 0.000069 BTC (April 3 low) would signal a bullish-to-bearish trend change and would open doors for a drop to 0.000060BTC.
Cryptocurrency exchange Coinsecure, India’s second exchange, announced that it has suffered a severe issue, 438 bitcoin, $3,3 million worth of bitcoin
Cryptocurrency exchange Coinsecure, India’s second exchange, announced that it has suffered a severe issue, 438 bitcoin, $3,3 million worth of bitcoin, have been transferred from the main wallet to an account that is not under their control.
CEO Mohit Kalra said that only he the Chief Strategist officer (CSO) Dr. Amitabh Saxena had private keys to the exchange’s main wallet.
“The current issue points towards losses caused during an exercise to extract BTG to distribute to our customers. Our Chief Strategist officer (CSO) Dr. Amitabh Saxena was extracting BTG and he claims that the funds have been lost in the process during the extraction of the private keys.” reads the statement published by Coinsecure.
According to the CEO of Coinsecure, the CSO is responsible for the transfer, the company posted two imaged on the websites containing company statement signed by the Coinsecure team and a scanned copy of a police complaint filed by Coinsecure CEO Mohit Kalra.
The Coinsecure CEO excluded the transfer was the result of a hack and accused the CSO, but Dr. Saxena denied any involvement in the case and informed Coinsecure that the funds “were stolen from company’s Bitcoin wallet due to some attack.”.
“Our system itself has never been compromised or hacked, and the current issue points towards losses caused during an exercise to extract BTG [Bitcoin Gold] to distribute to our customers, ” the Coinsecure team wrote in its statement
“Our CSO, Dr. Amitabh Saxena, was extracting BTG and he claims that funds have been lost in the process during the extraction of the private keys,” Coinsecure added.
“[he] making a false story to divert [his] attention and might have a role to play in this entire incident.”
The CEO is asking local police to seize the Saxena’s passport because he fears that the employee “might fly out of the country soon.”
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The Governor of Taiwan’s central bank has said that bitcoin transactions should be regulated by anti-money laundering regulations, according to a report.
Yang Chin-long, the Governor of the Central Bank of Taiwan, suggested during a meeting held by Taiwan’s legislative arm that the Ministry of Justice should include bitcoin into the East Asian state’s Money Laundering Control Act, due to the lack of regulation surrounding the cryptocurrency, according to a report from the Taiwan News.
These comments from Yang follow on from remarks he made at a news conference toward the end of last month. In his statement, at the time, the governor urged the government to regulate the digital currency so as to prevent the local financial market from being disrupted.
During last month’s news conference, Yang argued that as 87.5 percent of bitcoin transactions have been owed by a mere 0.61 percent of trading accounts around the world, it is easy for the price of the cryptocurrency to be manipulated. Not only that, but major central bankers and international financial organisations don’t appear to be in favour of legalising the market, with many countries keeping taps on industry events.
With rising interest in the cryptocurrency market, so too are reports where money laundering is becoming a growing concern.
Last month it was reported by NewsBTC that the U.S. Department of Justice (DoJ) had filed a lawsuit against digital payment processor Payza for allegedly operating an unlicensed money service business that processed more than $250 million in transactions. The company in question operates as an16 e-commerce business permitting payments and money transfers to be made across the globe, accepting Bitcoin, Ether, Ripple, and Dash. However, the DoJ indictment accuses the company of operating a money transmitting business without the required state licenses to do so. It’s reported that Payza also knowingly transmitted funds that came from illegal activities.
However, unlike money laundering cases by traditional banks, Japan’s National Police Agency (NPA) found that the number involved with cryptocurrencies is relatively small compared to the normal financial system. Figures from February show that there were only 669 suspected cases involving money laundering linked to digital currencies from exchange operators between April and December last year. This is compared to the 347,000 money laundering cases linked to the banking establishment in the same period.
Despite this, though, there will still be concern regarding the cryptocurrency market and its use for money laundering activities due to its unregulated nature. As a result, Taiwan’s central bank is one organisation that believes regulating it will help to prevent the threat of this from rising.