Summary:

  • Latest slump could have been caused by Bitcoin futures expiration

  • ETHEREUM pulls back below the $500 handle

  • SEC and BoC officials made interesting remarks concerning blockchain

Most of the major cryptocurrencies are trading lower on the day yet it is worth to note that many coins advanced overnight thanks to some positive remarks from one of the SEC officials. The capitalization of the whole market still sits well below the $300 billions yet it managed to climb back above the $280 billion mark. Some analysts claim that the latest slump in Bitcoin price that turned out to be short-term trend for the whole market could have been caused by the expiration of Bitcoin futures. It is true that Bitcoin price volatility tends to rise once the expiration date looms therefore traders may want to pay double attention on these days. The closest expiration dates of CME and CBOE Bitcoin futures are June 18 and June 29.

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BITCOIN made its way back above the $6500 mark yet its advance was halted a notch below the 33-period moving average (green line). The coin may be eyeing a test of the $6500 handle as a support level now. Source: xStation5

During the Yahoo All Markets Summit in San Francisco one of the SEC officials, William Hinman, made some clear statements on what factors he focuses on when judging whether a cryptocurrency is a security or not. Hinman, who in SEC is overseeing the digital asset sphere, explained that in his opinion when it comes to securities there must be “a third party that drives the expectations of their return”. When it comes to shares such party is a company behind those shares. Hinman continued saying that in case the cryptocurrency is truly decentralized then it cannot be considered a security. As such examples he named Bitcoin and Ether. Apart from that, Hinman made some positive remarks concerning distributed ledger technology and the potential it holds. The official named areas like supply chain management, licensing of the intellectual property rights or stock ownership transfers as ones where this new technology could really make a difference.

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After rebounding off the support zone (red colour) the price surged towards 33-period moving average yet it failed to overcome this hurdle. In turn we saw a reverse below $500 mark. As we have pointed in one of our previous analyses ETHEREUM tends to react to the $500 handle. Having that in mind, this level along with the earlier mention support zone may act as limits of the potential consolidation range. Source: xStation5

Meanwhile, some less favourable remarks were expressed on the other side of the Pacific Ocean. James Chapman, who is a senior research director at Bank of Canada, has answered question about the efficiency of the blockchain technology in central banking during a G20 Global Financial Stability Conference in Seoul. He agreed that digital currencies characterize with a high resilience and allow to eliminate information asymmetry. Referring to Project Jasper, a BoC’s blockchain payment system, he said that despite the project being in the third phase of testing no evidence of cost-saving were observed. Moreover, he expressed that in the current form the system is exposed to hackers activity as well as other operational risks. He concluded saying that the existing central banking system is so far superior to the blockchain prototype system.