The Hong Kong Monetary Authority shared a list of eight questions to seek policy-related recommendations citing five possible regulatory outcomes — no action, opt-in regime, risk-based regime, catch-all regime and blanket ban.
Hong Kong’s central banking institution, the Hong Kong Monetary Authority (HKMA), released a questionnaire to gauge public opinion on regulations for crypto-assets and stablecoins. The state-backed regulator intends to establish a regulatory framework by 2023-24.
HKMA’s “Discussion Paper on Crypto-assets and Stablecoins” highlights the explosive growth of the stablecoin market in terms of market capitalization since 2020 and the concurrent regulatory recommendations put forth by international regulators including the United States’ Financial Action Task Force (FATF), the Financial Stability Board (FSB) and The Basel Committee on Banking Supervision (BCBS).
According to the HKMA, the current size and trading activity of crypto-assets may not pose an immediate threat to the stability of the global financial system from a systemic point of view. However, the discussion paper warned:
“The growing exposure of institutional investors to such assets as an alternative to or to complement traditional asset classes for trading, lending and borrowing […] indicate growing interconnectedness with the mainstream financial system.”
Based on the above figure, HKMA’s paper shows that the global market capitalization stood at about $150 billion in December 2021, “representing about 5% of the overall crypto-asset market.” The regulator has also shared a list of eight questions to seek policy-related recommendations citing five possible regulatory outcomes — no action, opt-in regime, risk-based regime, catch-all regime and blanket ban:
HKMA expects stakeholders to submit their responses by 31st March 2022, and aims “to introduce the new regime no later than 2023/24.”
On an end note, the regulator stated that payment-related stablecoins have a higher potential for being incorporated into the mainstream financial system or even day-to-day commercial and economic activities.
As a result, the HKMA considers expanding the scope of the Payment Systems and Stored Value Facilities Ordinance (PSSVFO), a law that determines the legality of financial products.
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Bitcoin has been one of the most volatile assets since its inception in January 2009. Its meteoric rise to $68,900 USD in November 2021 marked yet another record for the first cryptocurrency. Nevertheless, taking a look at the actual panorama for 2022, things may look grimmer than last year. Cryptocurrencies are facing strong regulatory hauls worldwide that could slow down the growth of the ecosystem. So far, within two months, cryptocurrencies have been losing value, and the question remains unanswered, can we expect a further drop in price for Bitcoin and other cryptos, or are we going to see the meteoric rise to the moon continued in 2022?
Lots of fundamental analysis can be done in order to respond to this question. Nevertheless, something usually very overlooked is how important chart technical analysis could be for predicting Bitcoin and other cryptocurrency trends.
Let’s have a look at Bitcoin between December 2017 and April 2021.
There are two main characteristics we can see in this chart. The first one is, the price is moving within a rising channel. This channel is extremely volatile within its three and a half years timeframe. We can see how prices fluctuate between $19,800, then down to $3,200, then up to $14,000, then down to $3,800, to finally go up and reach $64,800. This extreme price fluctuations, in such a years-long timeframe, created a geometric figure most market analysts haven’t noticed yet: a harmonic pattern.
This massive (orange) harmonic pattern resembles a Deep Crab Harmonic Pattern the most. It’s pivot points are the 2017 bubble peak, the bottom in 2018 exactly one year later, the unexpected bounce to $14,000, and the March 2020 flash crash due to the start of the Covid-19 pandemic. All of this encompassed within the rising channel previously mentioned.
Now we can fairly say by looking at the current chart that this harmonic pattern may have played out. If we then take a look at what happened after this pattern was concluded, we can see that the price of BTCUSD dropped to $28,700, to then bounce back up to a new All Time High in November 2021 at $68,900.
It is currently very likely that we are seeing a new Harmonic Pattern happening now. The current price structure and volatility is still encompassed within an ascending channel, and if we go back down to the bottom of the channel, we could be seeing prices below $10,000 per BTC. The possible current Harmonic Pattern starts at April’s 2021 high, at $64,900, then moves down to $28,700, to then move back up to a second “blow off top” in November 2021. After this last top about two months ago, we have only seeing the prices drop.
After extensive analysis and comparison, it is my opinion and main argument that we are now within a Bullish Cypher Harmonic Pattern.
Unfortunately, in case this bullish Harmonic Pattern plays out, it means we could see the prices dropping to the bottom of the channel to lows even below $10,000. I believe because of a supossed “glitch” that occurred on the Binance exchange in September 2021, the price of the bottom of BTC has already been set by certain whales to $8200, in case it drops below $10,000. Dropping to such low levels may be necessary in order to break the bullish ascending triangle Bitcoin is in since more than four years ago.
By the looks of it, I expect the bottom of this Harmonic Pattern to be between $8,200 – $11,700. The date, as the analysis goes, should be sometime in the middle of the year 2022, around the month of August.
Finally, if we take a look at BTC in it’s 4h timeframe, we can see that the price action is currently been rejected to go back to the levels it had been since August 2021.
For the next move, I expect BTC to drop to a lower level and reach a price close to $31,000 USD, very close to the next lower fibonacci level shown in the chart. This may be happening sometime during the next month of February. Of course, this chart could also be invalidated. A pump over $70,000 would invalidate this analysis.
Next week I will be updating this chart, following up on the current trend and pivot changes that may occur along the way.
The arguments expressed within this article are the mere opinion of the author, and do not constitute by any means any form of financial advisory. CryptoTicker is not responsible for the opinions expressed by the author in this post. CryptoTicker advises its readers to understand the risk trading cryptocurrencies entail, and to treat the author’s analysis as a subtle opinion into the price of Bitcoin and other cryptocurrencies.CryptoTicker nor the author take any responsibilities of how this information may be used or treated by our readers.
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