🧘♂️Important BTC and Ethereum Updates
Market Meditations | July 30, 2021
Read before the weekend!
Dear Meditators
It’s been a busy week in the crypto markets. It’s also been a week of giveaways for us! Delighted to announce the following winners:
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⏰ In A Rush?
Here’s 5 things you need to know about the crypto markets today:
? Binance to Wind Down Derivatives in Europe; Malaysia Orders Closure
? Large VCs are sidelining smaller crypto investors, PwC crypto lead says
? Let’s Get Technical
BTC/USD
At a glance: on the high time frame, we see a big bounce of c.40% off the lows. A significant move for the biggest asset in the space. Note it has been a very clean move: nearly all white candles since 21st July.
Market structure: the situation does not call for FOMO. In fact, zooming out, we still are a long way away from previous highs. Note, to get back to All Time Highs (ATHs) we need another 60% from where we are trading currently. So there’s plenty of time to find and make a good move.
Key levels: the recent move has gone against the previous clear lower highs and lower lows pattern. What has been made clear is that $30k is a key support and psychological level. As for resistance, we can see $40k validated by many data points.
Potential plays: above $40k you can go for a retest or breakout play targeting $45k (or more depending on how aggressive you want to be). The current move has not retraced much. It’s only gone to the 0.236 level which is very bullish and shows a lot of strength. The 0.382 level (confluent with the $36k level which was a significant resistance) broke pretty easily. If we get a retest and bounce there, that would be a bullish structure which would likely lead to a stronger move up. So, things are looking better.
Short opportunities: for any bears out there, you can consider short plays if we lose the $36k level. There is a short opportunity back to the test of $30k. And of course, below $30k there are more short opportunities.
ETH/USD
Potential plays: A lot more opportunity from a technical perspective. More reasons to expect an aggressive move up. The trend line has clearly broken and after the break we had a big spike up, retest and then the trend line held thereafter.
Market structure: Structurally, we have just claimed a key level. We have broken a lower high. If we manage to hold it and bounce back off of it, the upside target is anywhere between $2.6k and $2.8k. Of course, BTC being reasonably bullish only stands to assist upward price action on ETH.
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? Super App Wallet, Assemble!
PayPal, the largest online payment processing company in the world, stated Wednesday that its ‘super app wallet’ (?which sounds like the best…or worst superhero team ever) is now “code complete”. Dan Schulman, CEO, said he expects the wallet to be “fully ramped in the United States in the next several months”
PayPal began allowing U.S. customers to use cryptocurrencies to make payments in March of this year.
The super app wallet will offer high-yield savings, early access to direct deposits, a messaging capability and “additional crypto capabilities”.
According to a leaked video of a presentation at EthCC in Paris last week, PayPal (among others) has interest in developing DeFi functionality for its users.
PayPal first made it possible for vendors to accept BTC payments in 2014. Six years later, in October of 2020, they began offering the ability to buy and hold Bitcoin, Bitcoin Cash, Ethereum, and Litecoin. PayPal isn’t alone in their expansion. Robinhood, founded in 2013, launched its Crypto unit five years later and continues expansion to offer more cryptocurrencies.
➡️ Forward Progress. The inclusion of additional crypto capabilities in PayPal’s new super app wallet follows the trend of the company’s expansion into crypto assets. While the specifics are still vague, Schulman did reference “strong adoption and trading of crypto on Venmo” as evidence of consumer demand. Venmo was acquired by PayPal in 2013.
The demand for exposure to these assets is clearly high enough to entice financial giants like Robinhood and PayPal into dedicating significant resources into their development. Moving forward, the expectation of more cryptocurrency features seems to be the safe bet.
? Inside the Echo Chamber
If you had the opportunity to walk the halls of legislators this week, you would have noticed that cryptocurrency regulation was a recurring theme. From hearings to letters, deadlines, and finally the Infrastructure Bill, cryptocurrency was all the rage this week. To be fair, it started earlier in July when US Senator Elizabeth Warren (D-Mass.) gave SEC chairman Gary Gensler, a July 28th deadline to state what authority the SEC might have in regulating cryptocurrencies. Then On July 26th, the same senator sent an open letter to US Treasury Secretary Janet Yellen, urging Yellen to bring about a “coordinated & holistic” response to the risks of crypto. By Wednesday, there had been three hearings across the senate & house that either touched or focused on crypto, including:
Cryptocurrencies: What are they good for?
Central Bank Digital Currencies
Ransomware
Thursday morning, reports were coming in that senators had added a surprise amendment to the massive Infrastructure bill regarding cryptocurrency tax reporting, in hopes to collect enough tax to offset the price tag of the bill, an astonishing $550 billion. Now that the surprise crypto tax amendment has been approved, the bill will be presented to the House of Representatives and the US Senate, where it will be voted on. The bill defines digital assets, includes an update to the definition of broker, clarifies broker-to-broker reporting to include digital assets, and adds digital assets to the rules requiring businesses to report cash payments above $10,000. According to the interpretation by the Blockchain Association, this bill, if passed, could affect DAO token holders, liquidity providers, wallet developers, miners, and more. Lawmakers, however, expect this amendment to cryptocurrency tax reporting to bring in $30 billion in funding.
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??♂️✍️ Stories in this newsletter were written by D. Beverly, Kyle F., Max P., Kimia K., Ellen B. and Koroush AK. Graphics were produced by Gerasimos P.
Not financial or tax advice. The content in this newsletter is for informational purposes only. Nothing in this email is intended to serve as financial advice. We are not financial advisors. Every investment and trading move involves risk. Do your own research when making a decision. See our important security disclaimers here.
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