Crypto Market Forecast: Week of September 5th 2022

Bitcoin’s (BTC) price dropped by just under 2% over the past week and the asset currently trades around ~US$20K. Ethereum‘s (ETH) price climbed by a moderate 4% and sits at ~US$1.56K. Binance-coin (BNB) lost 2%, currently trading at ~US$280.

Iran has announced a law that permits both local companies and the government to use cryptocurrencies for cross-border payments. The new arrangement works as part of an agreement between the Ministry of Industry and the Central Bank of Iran.

The Iranian Tasmin News Agency reports that the first import registered and paid for with cryptocurrency was on August 9th, with the order valued at roughly $10 million.

Russia seems to have taken note. Following the announcement from Iran, Russian Prime Minister Mikhail Mishustin announced just last Tuesday that the country must “intensively develop innovative areas, including the introduction of digital assets. This is a safe alternative for all parties, which can guarantee uninterrupted payment for deliveries of goods from abroad and for export”.

Law enforcement officials have shut down 16 cryptocurrency exchanges in Herat, Afghanistan. Sayed Shah Sa’adat, head of the counter-crime unit of Herat police told Afghan news agency Ariana News that the local central bank had warned of scams and requested that the exchanges be closed. Sa’adat stated that police have “arrested all the exchangers involved in the business and closed their shops”.

Of relevance here is that Afghanistan makes the top-20 list on Chainalysis’ 2021 Global Crypto Adoption Index, implying that cryptocurrency plays an important economic role in the country. Among the three indicators that Chainalysis uses to score crypto adoption, Afghanistan ranks second in the world (only after Tanzania) in on-chain value received, weighted by purchasing power parity (PPP) per capita.

The BBC reported in March that after the Taliban takeover in August 2021, the economy was left in ruins, especially amidst US sanctions and failed banks, and after the seizure of US7.1b of assets from the Afghan central bank — leaving locals with no other way to receive money.

Crypto news for the weeks ahead

5-9 September

Responses to President Biden’s March 2022 “crypto executive order” are due this week. Watch out for these releases from various government agencies. (Departments of Justice and Treasury have already submitted).

14-16 September

Binance Blockchain Week will take place this month in Paris and via live stream. The theme will be Web3 and will host top industry speakers from around the world.

15 September

The Ethereum blockchain is projected to launch its mainnet proof-of-work (PoW) to proof-of-stake (PoS) transition (“the Merge”) on 15 September.

22 September

After a couple of months of delays, the Cardano blockchain has confirmed a new projected date for the Vasil hard fork, which will increase the block size in an effort to lower transaction fees.

Top 10 Crypto Summary

Asset prices in Brave New Coin’s top-ten market cap list remain almost a mirror image of what they were at this time last week, with the exception of Cardano (ADA) and Ether (ETH): up by over 11% and 4% respectively. Both Cardano and Ethereum blockchains await scheduled hardforks this month — both after repeated delays.

Bitcoin Price Chart

Glassnode this week looked at the Average Spent Output Lifespan (ASOL), Average Coin Dormancy (ACD) and Coin Days Destroyed (CDD) — all of which point to a rather dull short-term but an “unbroken” long-term conviction, as indicated by older coins not being sold off in significant volumes.

Glassnode makes the case that in order to have confidence that Bitcoin has reached a sustained recovery, we will need to see significant profits in the adjusted SOPR (aSOPR) indicator. So far, this has not come about, and in fact, Profit and Loss Return Bands (30 day MA) indicates that we are currently living through the “second largest overall loss, eclipsed only by the 2018 low”.