Cryptocurrencies have had a pretty positive couple of weeks, especially Bitcoin, as it has managed to consolidate back above $20,000, following various factors that fueled optimism towards the world’s largest cryptocurrency. However, we experienced several days of high volatility last week, and there is still a lot of speculation about the short-term future of crypto assets and the economy in general. What will happen? Below we present the most relevant news of the week within the cryptocurrency ecosystem!
Bitcoin has closed the week with positive numbers, gaining about 2% after various news that have managed to generate optimism among investors. Among them, the announcement of the jobs report in the United States stood out, since it showed faster growth than expected in the month of October.
The US economy added 261,000 jobs in October and the unemployment rate hit 3.7%, according to the latest monthly employment survey from the Bureau of Labor Statistics. This shows that the measures implemented by the Federal Reserve are beginning to have an effect, since the level of unemployment reached is low compared to historical standards. However, the Federal Reserve will maintain an aggressive stance to cool down the labor market in the coming months.
The fight against inflation continues! The Federal Reserve continues to persistently combat the highest inflation in the last 40 years with the most aggressive rate hikes since then as well. This Wednesday, its monetary policy committee approved a rise in interest rates of 0.75 percentage points, reaching a range of between 3.75%-4%, these being the highest levels since the first half of January 2008.
It should be noted that this is the sixth time that interest rates have been raised, and the fourth in a row in a period of less than six months. Everything indicates that this trend will continue, and the central bank will continue to raise interest rates in the coming months, however, these increases are expected to be at a slower pace.
Let us remember that interest rates hikes are negative for crypto prices, since they show a high correlation with technology stocks, and investors tend to avoid this type of assets in this conditions, as they are considered high-risk assets. However, a slowdown in these hikes could start to generate optimism in the markets.
Happy Birthday! Last Monday, the Bitcoin whitepaper turned 14 years old, the basis of what today has become a market that moves more than a trillion dollars, after the mysterious Satoshi Nakamoto published it for the first time on October 31 2008. These have been years in which this asset has had not only an exponential growth in its price, but also a change in the perception of the digital asset by the world population, generating a revolution that has impacted the entire world.
It is still highly debated what type of asset it is, as some consider it a currency, others a commodity, or even a technology stock, due to the high correlation they have. Although there is still a long way to go for its regulation, various initiatives have already been planted, some that have already become a reality and countries that already accept it as legal tender.
Its deflationary model has caught the attention of a large number of investors, and today there are two: either you love Bitcoin, or you hate it, but it cannot go unnoticed.
In other news, the most “crypto-friendly” state in the United States has been revealed. The state of Nevada has been chosen as it currently has a high volume of cryptocurrency-related jobs, as well as favorable legislation. Within this, it stands out that it prohibits local governments from taxing blockchain and allows people to electronically sign transactions on the blockchain.
Next, we can find other crypto-friendly states, such as Florida, California, New Jersey, and Texas.
Binance will continue to offer services to Russian users, or so it seems! During the Web Summit in Lisbon, the CEO of Binance, Changpeng Zhao, reaffirmed his intention to continue providing services to citizens residing in Russia, unlike what we have seen with other companies in the crypto ecosystem in the wake of Russia’s invasion of Ukraine, who stopped their activities with citizens of this country.
Binance has several licensed entities in Europe such as in Spain, France, Italy, Lithuania, Sweden among several others. And while Zhao confirmed that these European entities would definitely not be able to serve Russian citizens, he made it clear that there are other entities that are established in jurisdictions outside the European Union.
However, the team will continue to analyze this situation, since the European Union would not see it favorably.
The government of China, the largest crypto whale in the world? CryptoQuant co-founder Ki Young Ju has claimed that the Chinese government is a crypto whale, despite its negative stance towards the industry.
According to Young Ju, China owns about $6 trillion in cryptocurrencies, spread across various assets. Bitcoin predominates within its portfolio, with 194,000 BTC, which is equivalent to about $3.9 billion dollars. It is followed by Ethereum, with 833,000 ETH, about $1.2 billion; and various other digital assets, which he seized from the PlusToken scam in 2019.
Bitcoin is currently above $20,600, after a week of high volatility, consolidating above an important level, which could keep its price above $20,000. If the price stays above that support level, we could see the world’s largest cryptocurrency reaching value close to $22,600 in the short term. Will we start to see a new uptrend for Bitcoin?
BTC/USDT 1D (TradingView chart).
For its part, Ethereum is trading above $1,580, and it may goes up to $1,770 in the next few days, since it is currently forming support near its current price to continue with an upward movement.
ETH/USDT 1D (TradingView chart).
These have been good days for the crypto market, after a rather complicated year in which the current economic crisis has had a significant impact on the markets. It seems that cryptocurrencies want to start again, and look for a bull market to recover, more however, it cannot be confirmed for sure, since the current economic situation is still complicated, and we may see difficult scenarios in the coming months. Without further ado, we wish you an amazing week.
