Over the past two days, the cryptocurrency news showed that the Bitcoin price has stabilized around the $3,400 margin after dropping to a new yearly low at $3,210 on December 7. However, on a weekly basis, Bitcoin’s performance is up 6% from $3,210 to $3,400 despite the fact that the market has lost $14 billion of its valuation over the past week.
The downward trend was mostly triggered by the bad performance of the ERC20 tokens, as well as the Ethereum price which recovered slightly by a similar magnitude as Bitcoin. ETH recorded an 8% increase from $83 to $90 but the Bitcoin Cash price remains at an all-time low of $94.
According to an analyst named Su Zhu who is also the CEO at Three Arrows Capital, the buy walls on fiat-to-crypto exchanges such as Coinbase and Bitstamp for Bitcoin have risen significantly over the past several weeks. As he explained:
“10% down from here ($3,300), buy walls on @Coinbase are now the largest (in BTC notional ) since mid-2015. Similar for Bitstamp.”
Zhu also emphasized that in order to break below the $3,300 level, Bitcoin will need to get through the large buy wall at $3,300 and lead an intense sell-off.
“To break lower will require filling these fiat-backed bids. Either 1) more BTC borrow to come online 2) KYC-able off-ramp selling. Derivatives selling will just lead to funding becoming very negative as it has been,” he concluded.
Based on the current trend since early December, it is more likely that Bitcoin will extend its negative sentiment into 2019, at least until the cryptocurrency begins to demonstrate signs of stability.
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“As for mutual settlements, we will consider, of course, a proposal on a cryptocurrency that is tied to gold. But, in my opinion, it is more important to develop settlements in national currencies.”Nabuilna explained that CBR is still unsure whether to use cryptocurrencies and how they could be launch into Russia’s monetary system but the idea of a zero-volatility digital asset is inviting:
“The CBR, in principle, is opposed to cryptocurrencies being launched into our monetary system. We do not see the possibility that cryptocurrencies fulfill the function of monetary surrogates. We have prepared an analytical report and will soon present it which will analyze what cryptocurrency is, what is happening in the world, what approaches different countries to have, and what regulation is envisaged. And, if the phenomenon of cryptocurrency in any perspective may cause risks to our macroeconomic stability, we need to understand that.”As noted in one of the best cryptocurrency sites, Russia is under significant economic sanction from the United States.
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