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Crypto Market Forecast: Week of May 24th 2021

A curated weekly summary of forward-focused crypto news that matters. This week, Bitcoin slides as China promises a "crackdown" on Bitcoin mining, Bitcoin flows from private wallets onto exchanges, and Ethereum secretly fixes a vulnerability.

The bleeding in Bitcoin (BTC) and crypto markets continued last week leaving many crypto assets down as much as 50% from all-time-high prices achieved last month. The Bitcoin price ends the week down ~24%. The second and fourth-largest assets on the Brave New Coin market cap table, Ethereum (ETH) and Cardano (ADA) both end the week down ~38%.

The initial trigger for sell-offs early in the week was a joint warning issued by three Chinese state-backed financial associations signaling Beijing’s intent to clamp down on speculative crypto trading and make a clear distinction around China’s own central bank digital currency.

The announcements detailed serious legal punishment against any financial services, banks, or payment providers willing to participate in any kind of financing activity associated with cryptocurrencies.

After a mild recovery, heavy selling resumed on Friday after it became public knowledge that a top Chinese governmental body had called for a crackdown on cryptocurrency mining. Liu He, a Deputy Premier, hosted a meeting of the Financial Stability and Development Committee of the State Council on Friday. During the meeting, he suggested a “crackdown on Bitcoin mining and trading behavior” to “resolutely prevent the transmission of individual risks to society.“ Following the meeting, the price of BTC slid from ~US$42,000 to ~US$34,500 in a matter of hours.

According to the Cambridge Centre for Alternative Finance, ~65% of the hash power fuelling the Bitcoin network is produced in China. While crypto trading and exchange activity have been banned in China since 2017—mining, privately holding cryptocurrency, and over-the-counter (OTC) trading—can be conducted legally. There are now more serious concerns about a blanket ban on any financial activity associated with cryptocurrency driving anxiety in markets. There are reports from market observers in China that miners and large investors in the country, driven by fear, are selling out of cryptocurrency positions and completely exiting the ecosystem.

Markets continued to trend down on Sunday after reports that exchange giant Huobi would be scaling back services due to concerns around the Chinese clampdown. Services being discontinued include futures contract trading services, leveraged investment products, exchange-traded products (ETP), and miner hosting services in China. On Sunday the BTC price dropped from US$38,000 to around $32,000 but has since recovered to $35,000.

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 24th of May 2021

Crypto news for the week ahead

24th May- Consensus 2021

Crypto’s biggest yearly investor conference will go digital this year. The four-day event will bring together more than 10,000 attendees across a variety of educational panels, workshops, keynotes, and fireside chats. Notable speakers include Cathie Wood, Ray Dalio, and a member of the Federal Reserve Board of Governors, Lael Brainard. It is a popular narrative in crypto that markets pump during times around Consensus because companies release information about blockchain products and deals during the event to gain maximum coverage.

24th May- Kraken listing BNT, SUSHI, and ANKR

On Monday, Kraken will begin supporting trading for three new tokens – Bancor (BNT), Sushi (SUSHI), and Ankr (ANKR). BNT and SUSHI are both native tokens for AMM-based decentralized exchanges. Ankr provides infrastructure to access various features on Ethereum such as staking, API services, and layer-2 scaling solutions.

Top 10 Crypto Summary

Market Cap 2405

It was a difficult week of trading for large-cap assets on the Brave New Coin market cap table. Ethereum (ETH) developers revealed in a blog post titled “Dodging a bullet: Ethereum State Problems” that the Berlin Hard Fork from April 16th “secretly” solved a severe threat to the Ethereum ecosystem. The threat is now being revealed transparently because the risks associated with it are low.

Bitcoin Price Chart

BLX 2405

The recent sell-offs in Bitcoin markets have coincided with a surge in the amount of Bitcoin flowing out of private wallets into exchanges. This is a bearish indicator that previous long-term holders are preparing to pull the trigger and sell out of cryptocurrency positions. There have been reports that much of this movement onto exchanges is coming from miners.


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