Crypto Market Forecast: Week of May 17th 2021
A curated weekly summary of forward-focused crypto news that matters. This week, Bitcoin nosedives as Tesla u-turns on its bitcoin payment policy, Binance faces investigations from US market regulators, and Cardano displays alpha and hits new all-time-highs.
Bitcoin and digital asset markets nosedived in the last week with traders spooked by bearish news events. Bitcoin (BTC) ends the week down a bleak 22%. Ethereum (ETH) and Binance Coin (BNB), the second and third largest assets on the Brave New Coin market cap table, fell by ~10% and ~17% respectively.
The initial trigger for the sell-off was a tweet from Tesla CEO Elon Musk announcing that the electric car manufacturer will suspend accepting BTC for vehicle purchases. Musk initially cited the use of fossil fuels during the Bitcoin mining process and its “great cost to the environment” as the reason for the suspension.
In the days following the announcement, Musk has clashed with several Bitcoin maximalists on social platforms. He has further criticized the network claiming it is centralized because mining is controlled by a “handful of big mining (aka hashing) companies.”
Tension in crypto markets intensified further after reports from Bloomberg that Binance, the world’s largest cryptocurrency exchange by trading volume, is under investigation by a list of US government agencies, including the US Justice Department, the Internal Revenue Service, and the Commodity Futures Trading Commission. The Bloomberg report does state, however, that “specifics of what the agencies are examining couldn’t be determined, and not all inquiries lead to allegations of wrongdoing.”
In 2020, blockchain forensics firm Chainalysis, working for various US federal agencies, traced US$2.8 billion worth of illicit bitcoin moving from criminal entities to crypto exchanges. 27.5% of this volume was sent to Binance. Since its inception, Binance has succeeded primarily as an entity operating outside the scope of government regulation.
With the scope and scale of crypto ransomware accelerating, more exchanges like Binance are likely to face questioning from global financial regulators. In the last month, a cyber-attack against the Colonial Pipeline Co. triggered fuel shortages across the eastern United States. Colonial was forced to pay Russia-based hackers a $5 million ransom in cryptocurrency.
Trading set-ups for the week
Pro trader Josh Olszewicz explores trading options and signals for BTC and ETH – and lays out the trading setups he’s watching for the upcoming week. Start your week off right with Josh’s thoughts on trading strategies on a weekly basis.
Bitcoin, ALTs and Ethereum – Trading setup for the week of the 17th of May 2021
Crypto news for the week ahead
16th May- 0x_nodes (BIOS) Initial Defi Offering
0x_nodes, a cross-chain yield aggregation protocol is set to publicly launch its token for sale between 16th May, 11:59 PM UTC, and 17th May, 11:59 PM UTC. The sale will initially launch on the Samurai token launch platform before a Uniswap pool opens on 18th May, 2:00 AM UTC. A US$500,000 allocation will be offered to the Samurai community. The explosive growth of protocols like Thorchain in recent months, has put the spotlight on the crosschain DeFi sector.
17th May- Kraken listing RARI, GHST and MATIC
On Tuesday, May 17th, Kraken will begin supporting three new tokens – Ethereum Rarible (RARI), Aavegotchi (GHST), and Polygon0 (MATIC). The blog post announcing the launch says that the Ethereum network has “played host to an explosion in digital art and created a multi-billion dollar market. This has underlined the need for effective scaling solutions.” RARI is the native asset of an NFT art platform Rarible, GHST supports NFT collectible game Aavegotchi, and MATIC supports layer-2 scaling solution Polygon0. The Kraken listings indicate the exchange’s support for the Ethereum platform ecosystem.
Top 10 Crypto Summary
It was a difficult week for large-cap crypto assets with most suffering double-digit losses. Cardano (ADA), however, rose by 17% in the last week and touched new all-time highs on Saturday. Last week, it was confirmed that the network’s new testnet, Alonzo, will launch in May. The update is focused on creating secure smart contracts that aim to solve ecosystem issues like DeFi protocol exploits.
Bitcoin Price Chart
Despite BTC’s difficult price week, fundamentals for the network look as strong as ever. Last week the Bitcoin network had its highest difficulty update in the last 7 years, rising by 21.5%. Rises in difficulty occur when the demand to mine the network surges and needs to be adjusted downwards by making the network more “difficult” to mine.
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