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Spain’s Central Bank Governor Claims Cryptocurrencies Present ‘More Risks Than Benefits’

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The Governor of Spain’s central bank has said that cryptocurrencies present ‘more risks than benefits,’ but believes in the potential of the blockchain.

According to a local report by EuropaPress, Luis María Linde, was speaking earlier this week when he said that:

“In my opinion, their current use (of cryptocurrencies) presents more risks than benefits: they have low acceptance as a means of payment, suffer extreme volatility, present multiple operational vulnerabilities and have been related to fraudulent or illicit activities in many cases.”

In reference to ‘cryptotokens,’ Linde said ‘those spurious novelties that do not provide significant improvements should be tackled as soon as possible.’ However, while he doesn’t appear to have much faith in cryptocurrencies, the central bank’s governor spoke of the potential that the distributed ledger presents, claiming that it ‘offers interesting possibilities.’

Broadly speaking, though, he argued that the digitisation of the financial sector could present ‘great opportunities’ to increase efficiency and improve financial services as a whole. However, he added that this was provided the innovations are ‘well used and managed.’

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The World Needs Fewer Blockchain Ideas and More Decentralization

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Blockchain has become somewhat of a buzzword in the financial sector. Many people have high expectations for this revolutionary technology. However, some critics claim the financial sector needs decentralization, rather than more proprietary solutions. There are some reasons as to why this latter approach may be preferable.

Is Blockchain Over-hyped?

According to a recent piece on InvestorPlace, the blockchain bubble is very real. There are still a few worthwhile projects in development which can offer a broad range of applications. However, the number of blockchain “stocks” has increased exponentially. A change that was to be expected ever since everyone started using the word to describe their company.

As such, the blockchain hype has become over-saturated. Very few actual use cases require blockchain technology. Instead, most of them require the principles presented by this technology. Mainly decentralization is a welcome change of pace in any industry. Blockchain itself may not necessarily be a big part of the future of society. Decentralization and cutting out the intermediaries, on the other hand, offers a lot more exciting use cases.

With the blockchain stocks plummeting rather quickly the next phase is almost upon us. During this transition, more and more companies are likely to steer away from proprietary blockchain technology. One exception is the banks, as they continue to file and win patents regarding distributed ledgers. Bank of America recently secured another such patent for a proprietary blockchain-based venture.

The Era of Financial Decentralization

If there is one thing Bitcoin has shown the world, it is how decentralized finance can work. Although converting to and from fiat currencies still mainly requires centralized platforms, that too is coming to change. Slowly but surely, decentralized exchanges are slowly gaining traction. This will affect the cryptocurrency industry but also spill over to the rest of finance.

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Analysts Call Crypto Crackdown a Good Thing for the Industry

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CNBC Africa Host Ran Neu-Ner has taken a position gaining a lot of acceptance recently that bringing clear regulation into the cryptocurrency marketplace at this time is a positive move for both entrepreneurs and investors.

Regulation Will Open the Flood Gates

Neu-Ner who hosts the CNBC Africa Crypto Trader appeared on the networks popular investment show Fast Money where he encouraged regulatory action saying; “When [regulators] come out with regulation, it’s going to open the floodgates for new money to come into crypto,”

Neu-Ner who was an early investor in Bitcoin and the founder of OnChain Capital may have been reacting to recent operations by US regulatory and law enforcement agencies targeting fraud in the cryptocurrency and initial coin offering (ICO) marketplaces.

The Department of Justice (DOJ) launched an investigation earlier this week into the possible manipulation of the price of Bitcoin and the overall digital asset market. Last week The North American Securities Administrators Association’s (NASAA) commenced Operation Crypto-Sweep which resulted in 70 investigations and 35 enforcement acts throughout North America.

These operations followed the fake ICO launch created by the Securities Exchange Commision called HoweyCoin which promised a guaranteed return and was endorsed by fake celebrities all of which the SEC informed would be investors are red flag indicators of a scam ICO on the linked .gov page.

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Litecoin Price Analysis: LTC/USD Struggling Near Key Resistance

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Litecoin price declined towards $115 before it found support against the US Dollar. LTC/USD recovered, but it faced a strong resistance near $124.

Key Talking Points

Litecoin price started an upside correction after testing the $115 support zone (Data feed of Kraken) against the US Dollar. Yesterday’s highlighted important bearish trend line with current resistance at $122 acted as a strong hurdle on the hourly chart of the LTC/USD pair. The pair is struggling to move above the $122 and $124 resistance levels.

There were further declines below $120 in litecoin price against the US dollar. The LTC/USD pair declined towards the $115 level where buyers appeared and protected losses.

Looking at the chart, the price formed a decent base at $114.98 and started an upside move. It traded higher with a positive bias and broke the $120 resistance level.

During the upside move, there was a break above the 23.6% Fib retracement level of the last decline from the $141.29 high to $114.98 low. However, the upside move faced a very strong resistance near $124.125.

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Cardano Price Analysis: ADA/USD Could Stage Comeback

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Key HighlightsADA price formed a decent support at $0.1880 and recovered higher against the US Dollar (tethered). There was a break above a key bearish trend line with resistance at $0.2050 on the hourly chart of the ADA/USD pair (data feed via Bittrex). The pair may continue to move higher as long as it is above the $0.2000 support level.

Cardano price is showing recovery signs against the US Dollar and Bitcoin. ADA/USD could correct further higher towards the $0.2250 resistance zone.

Cardano Price Analysis

After a major decline below $0.2000, ADA price found support above the $0.1850 level against the US Dollar. The price traded as low as $0.1880 before starting an upside correction. It moved higher and traded above the $0.1950 and $0.2000 resistance levels. Moreover, there was a break above the 23.6% Fib retracement level of the last decline from the $0.2600 high to $0.1880 low.

Recently, there was a break above a key bearish trend line with resistance at $0.2050 on the hourly chart of the ADA/USD pair. The current price action suggests positive signs above $0.2000. However, there are a few important hurdles on the upside near $0.2200 and $0.2250. The 50% Fib retracement level of the last decline from the $0.2600 high to $0.1880 low is at $0.2240 to act as a resistance. Moreover, the 100 hourly simple moving average is just below $0.2240. Therefore, if the price corrects further higher, it may perhaps face a lot of selling interest near $0.2400 and $0.2450.

The chart indicates that if the price fails to move above the $0.2250 level, it could drop once again. On the downside, the $0.2000 support holds a lot of importance. A break below this will most likely push the price below the recent low of $0.1880 in the near term.

Hourly MACD – The MACD for ADA/USD is slowly gaining pace in the bullish zone.

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Ethereum (ETH) Price Analysis: Correction to Broken Neckline?

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Ethereum recently broke below the neckline of its head and shoulders pattern, confirming the selloff signal. However, it found support around $545 and could be due for a retest of the broken support.

Applying the Fibonacci retracement tool on the latest swing high and low shows that the 61.8% level is closest to the broken support around $700. For now, price seems to be testing the resistance at the 38.2% retracement level at $613.52.

The 100 SMA just crossed below the longer-term 200 SMA to signal that the path of least resistance is to the downside. In other words, the selloff is more likely to continue than to reverse. The moving averages are also close to the broken neckline to add to its strength as resistance.

RSI is pulling out of the oversold level to show that buying pressure is in play, likely sustaining a larger correction. Similarly, stochastic is moving up so ethereum could follow suit and test the higher Fib levels.

Cryptocurrencies have been on the back foot for the most part of the week as headlines focused on regulation in the absence of positive developments.

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Bitcoin (BTC) Price Analysis: Bullish Divergence Spotted

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Bitcoin has formed lower lows while oscillators made higher lows, signaling that bullish pressure could return soon. The 100 SMA is still below the longer-term 200 SMA, though, so the path of least resistance might be to the downside.

This suggests that the selloff is more likely to resume than to reverse. The 100 SMA is holding as dynamic resistance at the moment, and the gap between the moving averages is widening to reflect stronger selling pressure.

However, RSI is already on the move up to show that buyers are starting to gain the upper hand. Stochastic, on the other hand, has reached the overbought zone to reflect exhaustion among bulls. A break past the 100 SMA could lead to a test of the next inflection point at the 200 SMA, but holding as resistance could lead to another dip to $7,200.

Headlines are zooming in on the regulatory steps being taken in the cryptocurrency industry, particularly the press release of the CFTC on providing guidance for exchanges listing virtual currency derivatives and the criminal probe launched by the US Department of Justice to look into price manipulation.

Ultimately, these moves could prove positive for the industry, but wary investors are likely liquidating some positions recently. Then again, dollar weakness appears to be coming into play and bitcoin is able to take advantage.

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Study Claims Cryptocurrency Values Based on Investor Sentiment

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A recent study by the Warwick Business Schools claims that the whims and caprices of investors dictate cryptocurrency prices. The study, also claims that economic indices do not play a significant role in shaping the market dynamic. In short, cryptos are only worth as much as people are willing to pay for them.

Cryptocurrency Value is Subject to Mood Swings

Assistant finance professor at Warwick Business School, Daniele Bianchi, is the author of the research paper. The study considered the top 14 cryptocurrencies based on their market capitalization. The primary conclusion drawn was that hype and emotions played the most significant roles in determining whether the price of a cryptocurrency rises or falls. According to Bianchi:

There is research showing limited similarities between Bitcoin and gold but looking across the 14 biggest cryptocurrencies the high volatility of their price means that they can hardly be seen as a reliable savings instrument in the short-term, let alone the long or medium term.

According to Bianchi, unlike the USD whose value is predicated on many parameters like trade deficits and interest rates, cryptocurrency prices are based on sentiments regarding the platform and the projects built upon them. Bianchi also added his voice to the crypto bubble narrative saying that the market bears striking similarities to the dot-com bubble of the late 90s and early 2000s.

Thus, he expects many of the present day digital token projects to collapse once the bubble bursts. The finance professor then said that crypto investors, therefore, have to find the Amazon of the crypto market. This preceding statement is a reference to the fact that Amazon was one of the few firms to survive the dot-com crash.

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German Stock Exchange Could Offer Bitcoin (BTC) Futures

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Deutsche Boerse AG, owner of the country’s largest stock exchange, is delving into the blockchain and cryptocurrency industry. Company head of clients, products and core markets, Jeff Tessler, made the comments at an industry event in London this week which sparked speculation that Germany was about to enter the futures fray.

US exchange giants CME and CBoE launched Bitcoin futures in December which many speculate has led to the current price action following the ability to short the market. Conjecture aside, both exchanges have done very well out of their crypto related offerings and no European exchange has been able to follow suit with similar products. Deutsche Boerse could be the first one to do so.

According to Bloomberg, Tessler said the emphasis at the moment was comprehension of the technology;

“Before we move forward with anything like Bitcoin we want to make sure we understand the underlying transaction which isn’t the easiest thing to do.” Before adding “We are deep at work with it,”

Crypto market volatility and regulation are also issues that need to be addressed; “we want to understand the volatility and make sure clients are in line and make sure regulators are in line.” He added.

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Ripple Price Analysis: XRP/USD Showing Positive Signs

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Key HighlightsRipple price traded as low as $0.5758 before starting a correction against the US dollar. This week’s followed crucial bearish trend line with resistance at $0.6200 was broken on the hourly chart of the XRP/USD pair (data source from Kraken). The pair may correct further higher, but it may face a strong selling interest near $0.6400-0.6500.

Ripple price is slowly recovering against the US Dollar and Bitcoin. XRP/USD may face a tough challenge near the $0.6500 resistance level, which was a support earlier.

Ripple Price Recovery

A decent low was formed near $0.5760 in Ripple price against the US Dollar. The price traded as low as $0.5758 and later is started an upward correction. It recovered nicely and moved above the $0.5900 and $0.6000 resistance levels. Moreover, there was a break above the 23.6% Fib retracement level of the last slide from the $0.7068 high to $0.5758 low.

More importantly, this week’s followed crucial bearish trend line with resistance at $0.6200 was broken on the hourly chart of the XRP/USD pair. On the upside, the next major hurdle for buyer is near $0.6400. It represents the 50% Fib retracement level of the last slide from the $0.7068 high to $0.5758 low. Further above $0.6400, the $0.6500 level is a crucial barrier. The stated $0.6500 level was a support earlier, and now it is likely to prevent further gains. Additionally, the 100 hourly simple moving average is positioned near $0.6410, which is another important resistance.

Looking at the chart, there are a few positive signs above the $0.6000 level. If buyers succeed in breaking the $0.6400 and $0.6500 resistance levels, ripple could accelerate higher. On the downside, the broken hurdles near $0.6000 and $0.5900 are likely to act as supports.

Looking at the technical indicators:

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