Crypto Market Forecast: 21st October
A mixed trading week in crypto markets ended with large caps BTC and ETH red for the week, while the often maligned XRP enjoyed healthy gains. In wider ecosystem news, Bitcoin network analysis helped take down one of the largest ever child pornography rings.
A mixed trading week in the crypto markets ended with the two largest digital assets, BTC and ETH, down ~1% and ~3% respectively. Some large caps like XRP, however, were able to buck the wider market trend and enjoy a green trading week. The XRP token was able to find buying pressure rising ~6% in a week when parent company Ripple announced that its XRP sales amounted to US$66 million in Q3 2019. This figure is down a significant 74% from the enormous US$251 million in XRP sold in Q2.
Some in the market view the reduced XRP sales in Q3 as a step in the right direction for the controversial, semi-permissioned blockchain token. Ripple blamed the drop off in XRP sales on a rise in ‘FUD’ (fear, uncertainty, and doubt) across crypto markets during the quarter.
In a quarterly statement that was intended to provide greater transparency, Ripple stated, "It’s on all of us to rise above the FUD and the tone-deaf who treat digital assets like a religion instead of technologies that can solve real-world problems."
The statement may have had the intended effect of galvanizing XRP believers. However, because Ripple pre-mined the entire supply of XRP tokens and still owns 60% of the supply, there continue to be accusations of market manipulation and price fixing by the company.
This week Chainalysis helped the Department of Justice take down one of the largest child pornography rings ever discovered (by amount of material stored) leading to the arrest of the website’s owners, operators and 337 users, with more expected to follow. Over 8 terabytes of illegal content was seized from the Welcome to Video (WTV) child pornography platform. The site had 1.3 million Bitcoin addresses registered with ~US$353,000 worth of Bitcoin transactions conducted on WTV between 2015-2018.
Chainalysis was able to identify a number of cryptocurrency exchanges connected to WTV transactions. Several exchanges used by WTV users had KYC processes. Some users had providing verified copies of personal identification and physical addresses, allowing the company to track WTV transactions back to their real-world identities.
The operation is both an endorsement of the transparent, accountable nature of the Bitcoin blockchain and the development of analytics techniques designed to mitigate the information asymmetries between regulators and users of cryptocurrency transactions for illicit purposes.
This week in cryptocurrency events
25th October- CME BTCV19 contracts last trade date
This Friday the latest round of CME quarterly Bitcoin futures ends. The nature of futures contracts means they need to be settled on a set date, based on a contract. All CME contracts will have to be traded, or settled, before this date. There is generally a fall in the trading volume of futures around expiration. This can tend to coincide with a rise in volatility and the potential for short/long squeezing. The volume of CME Bitcoin contracts has hovered in a range between 2,000-5,000 contracts a day (each contract is worth 5 BTC) for most of October, suggesting sizable interest remains amongst institutional traders to speculate on Bitcoin prices.
21st October to 22nd October- Pantera Blockchain Summit
This week blockchain thought leaders will gather in San Francisco for a conference hosted by leading investment hedge fund Pantera Capital. The list of speakers includes leading crypto researcher Nick Szabo, former CFTC chairman Christopher Giancarlo, and BAKKT COO Adam White. Topics of discussion include the current state of the industry and the development of blockchain infrastructure.
It was a mixed week for the assets in Brave New Coin’s Market Cap top 10 table. Gains in BTC competitors and forks, BCH and BCHSV, suggest that both projects still have pockets of support that remain committed despite the ongoing relevance and fundamental growth of the original Bitcoin.
This week saw another robust defense of the $8000 BTC/USD price level by the bulls. It was a very strong end to the week with prices picking up 2.5% on Sunday. Many technical traders appear bullish in the short term given the strong weekly close above $8200.
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