Fragile Reliability in Cryptos and
Facebook’s Libra Support
Cryptocurrency markets are as volatile as they have always been. The development that led to price fluctuations in almost all currencies was the disappearance of the crypto exchange Bitsane last week.
The Ireland-based Bitsane’s website is down and all its social media accounts, including those on Twitter and Facebook have been deleted. Almost 250 thousand users who lost their money to Bitsane have been affected. Forbes reports that clients of the exchange have lost amounts ranging from $5,000 to $150,000 in crypto holdings.
Another popular crypto exchange, Coinbase’s website went through a service outage mid-week. The outage for a short period of time led to another panic in the market, contributing to price declines in dozens of currencies, among them also Litecoin, Ethereum and XRP. A similar outage was reported about Bitstamp. The investor confidence is harmed amid the negative news.
The risks putting off investors is claiming a downward rally. Bitcoin’s rise to its highest in a year was short-lived.
This comes after the boost cryptos received from Facebook. The social media giant launched plans to introduce its own cryptocurrency Libra. Libra will be a payment system and act as a “global currency,” Facebook said.
Libra is creating some excitement in the crypto markets. Reports suggest that coin exchange Binance is already in talks with Facebook to list Libra among the currencies it offers.
In the meantime, US lawmakers are increasingly thinking of bringing regulations to the crypto market whereas Europeans ponder similar steps.
Bitcoin peaked on Wednesday, almost touching $14,000, its highest level since January 2018. Price surge and its next day sharp fall reminded on an end-2017 bubble. Price fell more than 20% in 20 minutes on Thursday after the crypto exchange vanished with 246K users’ crypto deposits with it. Bitsane was Ireland-based exchange, operating since 2016. Volatility was at its highest since the crypto bubble. Thursdays’ fall was the hardest one-day percentage loss since January 14, 2015. On Friday, bears eased retracing to 38.2% of the fall. $10,500 level provides strong support, just around 50 MA. According to RSI, in just two days price went from highly overbought to almost oversell area. Support for Bitcoin and other cryptos comes from the widespread acceptance of cryptocurrencies in financial markets and its underlining blockchain technology. Moreover, newly announced Libra currency yet to be launched from Facebook provided the boost in the market. In the week ahead, bitcoin is expected to move in a range between 12,700-13,000 resistance and 11,000-10,500 support levels.
Ethereum also lost almost 20% of the value in Thursdays’ session due to increased volatility in the market following the closure of several crypto exchanges. Indian Koinex shut down and Singapore Bitrue crypto exchange was hacked for over $4 million in assets. From Koinex said regulations in India are still not clear over trading cryptos. The country even proposed to introduce a 10-year jail sentence for Indian citizens who use cryptocurrencies, indicating unwelcome mood. Currency is currently hovering around $300 which represent a sharp increase in value since December 2018. Price recouped almost 38.2% of the value on Friday. Chart suggests it might form a head and shoulders pattern after it falls again. Price is moving along the bands of two intertwined channels near 50 MA. Resistance is kept at 61.8% Fibonacci at 330 level, with next to watch on 350. Support is set on 280 testing next on 250.
Being the best performer in cryptos, Litecoin holds above the psychologically critical $100 level. Its market cap is at the highest level ever at $8.4 billion. Boost comes after the Litecoin Foundation announced it had partnered with cryptocurrency exchange Bibox and blockchain startup Ternio to release a special edition crypto-enabled debit card called Litecoin BlockCard. Helping it to become more mainstream, cardholders will be able to spend their digital currencies anywhere in the world like holding any other usual credit card. Some of the gains cancelled after two most popular crypto exchanges, Coinbase and Bitstamp reported outage rising fears over trader’s deposits. Markets irregularities still provide great uncertainty and volatility in cryptos. Moving sideways, Litecoin is expected to hold below 130-140 resistance and 110-100 support levels.
Ripple price dipped below critical 0.4500 against the Dollar. The pair broke a few supports plunging below 0.4000 level. The price is correcting higher aiming to 38.2% Fibonacci retracement around 0.4300 level. Reacting to the most recent hacks, ripple is struggling to advance moving closely oversold area according to RSI. On the positive side, Ripple has signed a deal with the regulation technology startup Coin Firm to halt its vulnerability to hackings and malicious actors. Better understating of its customers and introducing new AML regulations could rise trust in the currency. Pair will continue to trade inside the ascending channel and is expected to move higher from the lower band. For the week ahead resistance is held at 0.4300-0.4400 range finding strong support at 0.4000-0.3900 levels.