S&P 500 moved away from session highs as Apple and Tesla found themselves under strong pressure.
Basic materials stocks rebounded amid a strong rally in commodity markets.
S&P 500 will not gain sustainable upside momentum if tech stocks continue to move lower.
Apple Pulls S&P 500 Towards Weekly Lows
S&P 500 received support at the start of today’s trading session as Unemployment Rate increased from 3.5% in September to 3.7% in October. Traders were willing to bet that rising Unemployment Rate will make the Fed less hawkish. However, S&P 500 has quickly lost momentum and moved towards the support at the 3725 level.
Apple moved below the $135 level as the sell-off continued. The strong pullback in Apple stock put material pressure on the S&P 500 in recent days. Meanwhile, Tesla moved closer to yearly lows.
PayPal was down by 5% after presenting weak guidance for the fourth quarter. The company expects that weaker consumer activity will put some pressure on its results, which is bearish for the stock.
While energy and basic materials stocks have been moving higher this week, the strong sell-off in tech stocks put significant pressure on the S&P 500. The broad market will not be able to rebound if leading tech stocks keep moving lower.
S&P 500 Faced Strong Resistance Near The 50 EMA
S&P 500 continues its attempts to settle below the support at 3725. If S&P 500 manages to settle below this level, it will head towards the support at 3690. A successful test of the support at 3690 will push S&P 500 towards the support at 3650. In case S&P 500 declines below this level, it will move towards the next support at 3625.
On the upside, S&P 500 needs to stay above the 3725 level to have a chance to gain upside momentum in the near term. The next resistance level for S&P 500 is located at 3760. A successful test of the resistance at 3760 will open the way to the test of the next resistance at 3805. The 50 EMA is located in the nearby, so S&P 500 will likely face material resistance in the 3805 – 3815 area.
Weaker dollar and lower Treasury yields provided material support to stocks.
The disappointing economic data also served as a positive catalyst for the market.
The market’s optimism will be tested by earnings reports from Alphabet and Microsoft.
Stocks Moved To Multi-Week Highs
S&P 500 gained strong upside momentum today as Treasury yields pulled back from their recent highs. CB Consumer Confidence and Case-Shiller Home Price Index reports indicated that high interest rates have started to put material pressure on the economy. These reports were bullish for stocks as disappointing economic data may force the Fed to be less hawkish.
Today’s rebound was broad, and all market segments were moving higher. REITs enjoyed strong support due to lower Treasury yields.
PayPal gained 7% after Amazon added Venmo as a payment option ahead of the holiday season. Amazon’s decision will boost PayPal’s results in the fourth quarter.
Meta gained 6% as traders bet that the worst has been already priced in ahead of the earnings report, which will be released tomorrow after the market close.
The market optimism was tested by major earnings reports, which were released after the market close.
Alphabet reported revenue of $69.09 billion and earnings of $1.06 per share, missing analyst estimates on both earnings and revenue. The company’s stock has immediately found itself under pressure and moved below the $100 level.
Microsoft reported revenue of $50.1 billion and earnings of $2.35 per share. The company noted that Microsoft Cloud revenue was $25.7 billion, up by 24% on a year-over-year basis. The strong growth in the cloud segment did not provide material support to the stock in the post-market session, and Microsoft moved below the $250 level.
Visa reported revenue of $7.8 billion and adjusted earnings of $1.93 per share, beating analyst estimates on both earnings and revenue. The company increased its dividend to $0.45 per share and announced a $12 billion share repurchase program. While the increase in the dividend and the stock buyback were good news for Visa shareholders, the stock was mostly flat in the post-market session.
Traders should note that these stocks will be sensitive to comments made during the earnings calls, and tomorrow’s dynamics may differ from the price action in the post-market session.
S&P 500 Pulls Back From Highs After Alphabet Misses Analyst Estimates
From a big picture point of view, S&P 500 managed to settle above the 50 EMA at 3815 and continued its rebound. The nearest resistance level for S&P 500 is located at 3885. In case S&P 500 settles above this level, it will move towards the next resistance level at 3915. A successful test of this level will open the way to the test of the resistance at 3960.
On the support side, the nearest support level for S&P 500 is located at 3835. If S&P 500 declines below this level, it will head towards the next support level at 3805. A move below 3805 will open the way to the test of the support at 3760.
The total crypto market cap found support from weak US economic indicators reflecting greater fear of the Fed than a recession.
With investor focus on the Jackson Hole Symposium and Fed Chair Powell, the crypto market is unlikely to break out from current ranges.
Any crypto market optimism could freeze over on Friday, with Fed Chair Powell on the docket to deliver a keynote speech.
US Macro and Fed Monetary Policy Remains the Key Market Focus
On Monday, panic selling led the total crypto market cap to a day low of $969.2 billion before a post-US closing bell revival. A lack of US economic indicators and FOMC member chatter allowed dip buyers to jump in ahead of a busy week for the global financial markets.
Today, US private sector PMIs set the tone, with the market focus on the Services PMI. A sharper contraction in the services sector delivered crypto support, with the numbers suggesting the need for a possible pause on rate hikes.
Over the week, core durable goods orders, jobless claims, Q2 GDP, personal spending, and inflation figures are also on the docket.
However, uncertainty will shroud the numbers. Investors will need to consider what gives the Fed more wriggle room and what could shallow the planned aggressive interest rate path beyond normalization.
The two market forces remain the economic outlook and the Fed interest rate path trajectory. A less hawkish stance on interest rates but an optimistic view of the US economy would be the ideal crypto combination. However, with US inflation running hot, the two are unlikely to materialize in unison.
Beyond the US, China, the Eurozone, and the UK are other economies faltering.
Early in the US session, bitcoin (BTC) was up 0.21%, with Ethereum (ETH) rising by 0.53%. XRP led the way down, however, falling by 1.16%.
XRP Falters as Investors Await Key Court Ruling in the SEC v Ripple Case
Investor uncertainty towards the SEC v Ripple case remains an XRP headwind. Court rulings on the matter of the Hinman speech-related documents have been on the slower side. The SEC filed its most recent objection to the July court ruling, denying the SEC motion to shield the Hinman docs under the attorney-client privilege in late July.
Four weeks have passed since the SEC objection. Other than an SEC reply brief, there have been no other updates on the matter of the Hinman speech-related documents.
For investors, one concern will be that the Court has entertained more than six motions to contest an original ruling in favor of Ripple. These preceded the July ruling that resulted in the SEC objection.
While other platforms lay off staff and declare bankruptcy, DBS appears to have found the appropriate customer base. Not only are volumes up but also BTC purchases, suggesting whale presence in the Republic.
DBS launched DBS Digital Exchange in December 2020, which coincided with the SEC lawsuit against Ripple Labs.
Nike Brings the NFT Market Back to Life
NIKEreportedly became the highest NFT earnings brand. While NFT trading volumes have fallen off a cliff edge, NIKE had NFT revenue of $185.32 million from 67,490 transactions. According to Dune Analytics, Dolce & Gabbana came in second, with $25.65 million in total NFT revenue, followed by Tiffany ($12.62m).
While Tiffany ranked third, the $12.62 million in revenue came from just 74 transactions.
Web3 and NFT trailblazer Gucci had total NFT revenue of $11.56 million.
PayPal (PYPL) Partners with Coinbase (COIN) to Assist with Banking Compliance
Today, Coinbaseannounced the addition of PayPal (PYPL) to the Travel Rule Universal Solution Technology (TRUST) network.
According to the announcement,
“TRUST is a global, industry-driven solution designed to increase compliance with a requirement known as the Travel Rule while prioritizing the security and privacy of customers.
Deloitte has found that 75% of U.S. retailers plan to accept crypto payments within the next two years.
More than half of large retailers are building the required infrastructure to integrate digital currencies into their services.
64% of merchants said that their customers have expressed interest in using crypto for payments.
Despite the crypto market collapsing in May, wiping out nearly $40 billion in investors’ capital, a new survey published by Deloitte suggests that merchants are optimistic about cryptocurrency’s future.
Deloitte, a leading global provider of audit and assurance, consulting, financial advisory, risk advisory and tax services, has found that 75% of U.S. retailers plan to acceptcrypto or stablecoin paymentswithin the next two years.
As it currently stands, there are over 320 million crypto users worldwide, with global crypto adoption rising by over 880% last year, according to data from Chainalysis and TripleA. As more and more people continue to invest in cryptocurrencies, it is expected that digital assets will make an even larger impact on the retail sector in the coming years.
Merchant Adoption of Digital Currencies
According to Deloitte, more than half of large retailers with revenues over $500 million are currently spending $1 million or more building the required infrastructure to integrate digital currencies into their services.
A large chunk of surveyed merchants (85%) said they anticipate that cryptocurrency payments will become more prevalent in their respective industries within five years, while 60% expect budgets of more than $500,000 to enable crypto payments this year.
In addition, small to medium-sized companies are also entering the space, with 73% of retailers with revenues between $10 million and $100 million investing between $100,000 to $1 million to create the necessary infrastructure.
The survey also found that consumer interest is fuelling merchant adoption, with 64% of retailers confirming that their customers have expressed interest in using crypto for payments. Around 83% of merchants anticipate that this interest is only set to increase in the future.
To this end, a recent study by research firm Insider Intelligence revealed that the number of adults in the U.S. relying on digital assets for everyday purchases is set to surge 70% by the end of this year. This means that 3.6 million Americans, or 10.7% of all crypto owners, will be paying for goods and services in crypto by December 2022.
Insider Intelligence expects cryptocurrencies to exceed $10 billion in global transaction value this year. In fact, the company believes that as digital asset adoption accelerates, the number of users worldwide may eclipse 37.2 million by 2023. This figure is feasible considering that investors entering the global crypto fray have nearly doubled across countries like India and Brazil within the last 12 months.
Push for Crypto Payments
While nearly half expect that cryptocurrency adoption will enhance the customer experience, 93% of retailers that are already accepting cryptocurrency have reported a positive impact on their customer metrics.
However, challenges remain and many merchants cited concerns related to the security of payment systems (43%) fluctuating regulations (37%), volatility (36%) and a lack of budget (30%).
Indeed, the complexities linked to the integration of cryptocurrencies with legacy systems poses the largest challenge, according to 45% of surveyed retailers. Deloitte expressed that wider adoption is more likely across a broader set of products and services as partnerships with regulated and established institutions in the industry help to deliver the benefits of digital currencies.
Additionally, more than 80% of surveyed merchants would be motivated to adopt digital currency payments if third-party processors avoided the traditional holding period or offered no conversion fees for digital and/or fiat currencies.
As it currently stands, 7879 global merchants accept Bitcoin (BTC) as a payment method, according to data from Cryptwerk. That figure stands at 4081 for Ethereum (ETH), 3284 for Litecoin (LTC), 2935 for Bitcoin Cash (BCH), 2058 for Dogecoin (DOGE), 1770 for Dash (DASH), 1658 for Ripple (XRP) and 1299 for Monero (XMR).
Also, leading fashion brands Balenciaga and Gucci announced recently that they are accepting cryptocurrencies across flagship U.S. stores, while PayPal expanded its offering to enable users to transfer cryptocurrency to external wallets after launching a new service last year that enables customers to buy, hold and sell cryptocurrency directly from their PayPal account.
Overall, Deloitte polled 2,000 senior executives at U.S. retail organisations between December 3 and December 16, 2021. The participants were distributed equally among the cosmetics, digital goods, electronics, fashion, food and beverages, home and garden, hospitality and leisure, personal and household goods, services and transportation sectors.
In other news, a new report by Messari and Dove Metrics has found that $30 billion was raised from 1199 funding rounds in the first half of this year, outpacing the entire year of fundraising in 2021. The centralised finance (CeFi) sector received a third of the total funds raised, while decentralised finance (DeFi) saw $1.8 billion in funding.
Meanwhile, Venture Capital (VC) investments in the space have reached $18.3 billion so far this year, which is nearly triple the amount invested in 2020 and also on pace to surpass 2021’s record of $32.4 billion, according to Steven Alexopoulos, an analyst at JP Morgan. With such developments in mind, it is clear that the cryptocurrency industry is set to expand further, with increased adoption setting the stage for future growth.
It is another bullish Monday to Friday for the crypto market, supported by US corporate earnings and US economic indicators.
Decred (DCR) leads the way, surging by 109%
Chiliz (CHZ), Flow (FLOW), Holo (HOT), and Optimism (OP) were also among the front runners.
Monday to Friday, August 5, the total crypto market cap was up $10.95 billion, with the crypto market on target for a fifth consecutive weekly gain.
Following the dovish 75-basis point rate hike and weak Q2 GDP numbers, US economic indicators painted a mixed picture ahead of the Friday nonfarm payroll numbers.
A pickup in service sector activity saw the markets reconsider another 75-basis point rate hike in September. The ISM Non-Manufacturing PMI increased from 55.3 to 56.7. Economists forecast a PMI of 53.5. Significantly, the numbers eased fears of an economic recession.
On Thursday, weekly jobless claims figures sent a pre-NFP warning, however.
In the week ending July 29, initial jobless claims fell by 260k, up from the previous week’s 254k. The figures suggested weakening labor market conditions ahead of the July nonfarm payrolls.
The jobless claims 4-week average climbed from 248.75k to 254.75k. The 4-week average last sat at sub-200k in the week ending May 13.
However, nonfarm payrolls wrapped up an upbeat week, with payrolls surging by 528k in July, beating a 250k forecast. In June, payrolls increased by 398k. Average wage growth held steady at 5.2%.
US corporate earnings also delivered market support and a NASDAQ 100 breakout session. PayPal (PYPL) jumped by 9.25% on a rosy earnings forecast, supporting the NASDAQ 100. Monday through Friday the NASDAQ 100 gained 2.15%, with a 0.50% loss on Friday limiting the upside.
The upbeat numbers increased the bets of a 75-basis point rate hike in September or possibly a full percentage point, leading to a reversal of earlier gains.
There were no cues from the crypto wires to influence the broader crypto market, leaving investors to consider the Fed monetary policy and US economic outlook.
Across the CoinMarketCap crypto top 100, the bullish week saw several cryptos outperform the broader market.
Decred (DCR) leads the way, with Chiliz (CHZ), Flow (FLOW), Holo (HOT), and Optimism (OP) among the front runners with two hours of the Friday session remaining.
For the week, DCR is up 100.5% to $54.82, Monday through Friday. A bearish start to the week saw DCR fall for three consecutive sessions to a Thursday low of $26.15 before making a move. Finding support on Thursday, DCR surged to a Friday high of $70.91 before sliding back to sub-$55.
There were no apparent reasons for the Friday breakout, which saw DCR rise in the market cap rankings to the #64 spot.
Decred employs a hybrid PoS and PoW algo. While holders can validate transactions and vote on proposals by staking, there is also the option to mine DCR.
A possible reason for the latest upswing is the plan to incorporate Lightning Network.
Looking at the trends, DCR would need to avoid a fall back to sub-$30 and the current week low of $26.15 to support the bullish trend. A move through this week’s high of $70.91 would support a run at the April high of $86.56. From there, DCR would have a free run at the January high of $91.13 to bring $100 into view.
A fall to sub-$30 would bring the July and the current-year low of $20.76 into view, the lowest level since November 2020.
Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal going into Saturday. DCR sat above the 50-day EMA, currently at $28.87.
The 50-day EMA pulled away from the 100-day EMA, with the 100-day EMA moving away from the 200-day EMA, both bullish DCR price signals.
Avoiding a fall through the 50-day EMA would continue to support the upward trend formed after testing support at the 50-day EMA on Friday.
However, a fall through the 50-day EMA could bring sub-$30 and the 100-day EMA, currently at $27.03, and the current week low into play.
For the week, CHZ is up 18.58% to $0.1440, Monday through Friday. A bullish start to the week saw CHZ surge from a week low of $12.14 to a Monday high of $0.1631. However, a mid-week pullback saw CHZ return to $0.1308 before a bullish Thursday session.
Network news updates delivered the Monday breakout session. News of Socios.com investing $100 million to support Barcelona FC’s Web3 goals was the key. The Scoville testnet launch for Chiliz Chain 2.0 added further support.
Looking at the trends, CHZ would need to avoid a fall back to sub-$0.1250 and the current week low of $0.1214 to support the bullish trend. A move through this week’s high of $0.1631 would support a run at the May high of $0.1974. From there, CHZ would have a free run at the March high of $0.3312 to bring $0.40 into view.
A fall back to sub-$0.1250 would bring the July and the current-year low of $0.0798 into view, the lowest level since March 2021.
Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal going into Saturday. CHZ sat above the 50-day EMA, currently at $0.1343.
The 50-day EMA pulled away from the 100-day EMA, with the 100-day EMA moving away from the 200-day EMA, both bullish CHZ price signals.
Avoiding a fall through the 50-day EMA would continue to support the upward trend formed after last testing support at the 50-day EMA on July 27.
However, a fall through the 50-day EMA could bring the 100-day EMA, currently at $0.1260, and the current week’s low into play.
For the week, FLOW is up 43.52% to $2.77, Monday through Friday. A mixed start to the week saw FLOW fall to a Tuesday low of $1.81 before surging to a Thursday high of $3.77.
A pullback from the $3.00 handle saw FLOW fall back to sub-$2.50 before returning to $2.70 levels.
News of Meta announcing the introduction of digital collectibles to showcase NFTs on Instagram delivered support.
According to the announcement,
“In order to post a digital collectible, all you need to do is connect your digital wallet to Instagram. As of today, we support connections with third-party wallets including Rainbow, MetaMask, Trust Wallet, Coinbase Wallet, and Dapper Wallet coming soon. Supported blockchains at this time include Ethereum, Polygon, and Flow.”
Looking at the trends, FLOW would need to avoid a fall back to sub-$2.00 and the current week low of $1.81 to support the bullish trend. A move through this week’s high of $3.77 would support a run at the May high of $5.21. From there, FLOW would have a free run at the April high of $8.17 to bring $10.00, last hit in December 2021.
A fall back to sub-$2.00 would bring the July low of $1.37 into view. FLOW fell to a current year low of $1.16 on June 18.
Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal going into Saturday. FLOW sat above the 50-day EMA, currently at $2.1383.
The 50-day EMA pulled away from the 100-day EMA, with the 100-day EMA moving away from the 200-day EMA, both bullish FLOW price signals.
Avoiding a fall through the 50-day EMA would continue to support the upward trend formed after the August 4 breakout from the 50-day EMA.
However, a fall through the 50-day EMA could bring sub-$2.00 and the 100-day EMA, currently at $1.9757, and the current week low of $1.81 into play.
For the week, HOT is up 17.39% to $0.0027, Monday through Friday. A mixed start to the week saw HOT fall to a Tuesday low of $0.0020 before surging to a Friday high of $0.0029 before easing back.
While there was no specific news to deliver the breakout week, network updates kept HOT in the spotlight.
Looking at the trends, HOT would need to avoid a fall back to sub-$0.0025 and the current week low of $0.0020 to support the bullish trend. A move through this week’s high of $0.0029 would support a run at the May high of $0.0073.
From there, HOT would have a free run at the February high of $0.0086 to bring $0.01 into view, last hit in December 2021. A fall back to sub-$0.0025 would bring the July low of $0.0019 into view.
Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal going into Saturday. HOT sat above the 50-day EMA, currently at $0.0023.
The 50-day pulled away from the 100-day EMA, with the 100-day EMA moving away from the 200-day EMA, both bullish HOT price signals.
Avoiding a fall through the 50-day EMA would continue to support the upward trend formed after testing support at the 50-day EMA on August 3.
However, a fall through the 50-day EMA would bring the 100-day EMA, currently at $0.0023, and the current week low of $0.002 into play.
For the current week, is up 20.14% to $1.9030, Monday to Friday. A bearish start to the week saw OP fall to a Tuesday low of $1.3620 before surging to a Thursday high of $2.2380.
However, a bearish end to Thursday and a bearish Friday session saw OP slide back to sub-$1.80 before finding support.
News from Aave (AAVE) of the launch of the OptimismFND Liquidity Mining Program delivered OP price support. According to the announcement,
“The program will run for 90 days with a distribution of 5M OP to the Aave Protocol’s Optimism Market users.”
Looking at the trends, a breakout from the week high of $2.238 would support a run at $3.00. However, market sentiment across the broader crypto market will need to remain bullish to support a breakout from $2.50. (There is no EMA technical analysis due to the available price points).
On Wednesday, XRP slipped by 0.40%, following a 2.16% loss from Tuesday.
Crypto market forces provided direction as investors responded to US data and corporate earnings.
The technical indicators remain bullish, with XRP currently sitting at the 50-day EMA.
On Wednesday, XRP slipped by 0.40%. Following a 2.16% slide from Tuesday, XRP ended the day at $0.3697.
A bearish start to the day saw XRP slide to a day low of $0.3629. Steering clear of the First Major Support Level (S1) at $0.3607, XRP rallied to a high of $0.3774.
However, falling short of the First Major Resistance Level (R1) at $0.3878, XRP slid back to end the day at sub-$0.37.
US corporate earnings and economic indicators failed to deliver prolonged support, with XRP coughing gains after the US market close.
On Wednesday, fears of an economic recession subsided. The all-important ISM Non-Manufacturing PMI unexpectedly increased in July, a positive signal for the US economy.
SEC v Ripple Updates Fail to Inspire Investors Focused on the US
In July, the ISM Non-Manufacturing PMI unexpectedly rose from 55.3 to 56.7. Economists forecast a PMI of 53.5. With services accounting for more than 70% of the US economy, the numbers also delivered the FOMC hawks a reason to skew towards a 75% basis point rate hike in September.
Fears of a more hawkish Fed likely contributed to the late pullback, as investors locked in profits.
US corporate earnings also delivered market support and a NASDAQ 100 breakout session. PayPal (PYPL) jumped by 9.25% on a rosy earnings forecast, supporting the NASDAQ 100’s 2.59% rally.
From the SEC v Ripple case, the Ripple defense team made its latest filing as parties await the court decision on the SEC objection to the court denying the SEC’s claim that William Hinman’s speech-related documents fall under the attorney-client privilege.
The former SEC Director of the Division of Corporation Finance said that Bitcoin (BTC) and Ethereum (ETH) are not securities. Hinman delivered the speech in 2018, over two years before the SEC filing of the lawsuit against Ripple.
This morning, defense attorney James Filan shared the Ripple defendants’ latest request, saying,
“Ripple Defendants request permission to serve non-party subpoenas to authenticate videos of seven SEC officials’ public remarks in connection with previous RFAs. SEC will not consent, and SEC seeks to reopen discovery.”
Interestingly, the SEC couldn’t confirm or deny if the video of Bill Hinman was Bill Hinman despite Hinman being a former SEC Director of the Division of Corporation Finance.
The latest move follows previous requests for the SEC to authenticate recorded statements totaling seven, among the recordings being one of William Hinman.
To date, the SEC has refused to admit or deny the authenticity of the recorded statements. SEC Chair Gary Gensler and the SEC are vying to become the crypto watchdog. Lawmakers on Capitol Hill could have an issue giving such a coveted task to an agency unable to identify its employees.
XRP Price Action
At the time of writing, XRP was down 0.19% to $0.3697.
A choppy morning saw XRP rise to a high of $0.3747 before falling to a low of $0.3678.
XRP needs to move through the $0.3700 pivot to target the First Major Resistance Level (R1) at $0.3771 and the Wednesday high of $0.3774.
XRP would need support from the broader market to break out from the morning high of $0.3747.
In the case of an extended crypto rally, XRP could test resistance at the Second Major Resistance Level (R2) at $0.3845 and resistance at $0.39.
The Third Major Resistance Level sits at $0.3990.
Failure to move through the pivot would leave the First Major Support Level (S1) at $0.3626 in play.
Barring an extended sell-off, XRP should avoid the Second Major Support Level (S2) at $0.3555.
The Third Major Support Level (S3) sits at $0.3410.
A Hinman ruling in favor of Ripple, XRP should break down the resistance levels to target $0.45. Another long delay to a court ruling could test investor resilience.
The EMAs and the 4-hourly candlestick chart (below) sent a bullish signal.
At the time of writing, XRP sat at the 50-day EMA, currently at $0.3703.
The 50-day EMA flattened on the 100-day EMA, while the 100-day EMA widened the gap from the 200-day EMA, both XRP price positives.
A 50-day EMA widening from the 100-day EMA would support a return to $0.39.
However, a fall through the 100-day EMA, currently at $0.3634, would bring S1 and sub-$0.36 into view.
Bitcoin (BTC) saw red for a sixth consecutive day, with a late sell-off sending BTC into negative territory.
US economic indicators and corporate earnings delivered support throughout the US session. Fed policy jitters likely contributed to the reversal.
The Bitcoin Fear & Greed Index succumbed to market forces, falling from 34/100 to 30/100.
On Wednesday, bitcoin (BTC) fell by 0.33%. Following a 1.21% decline from Tuesday, Bitcoin ended the day at $22,825. The bearish session saw BTC extend its losing streak to six sessions. BTC also ended the day at sub-$23,000 for the second time in seven sessions.
A mixed start to the day saw BTC fall to an early low of $22,808 before making a move.
Steering clear of the First Major Support Level (S1) at $22,623, BTC rallied to a high of $23,616. BTC broke through the First Major Resistance Level (R1) at $23,406 before a late reversal to sub-$23,000.
US recessionary fears abated on Wednesday, with ISM Non-Manufacturing PMI figures for July impressing.
In July, the ISM Non-Manufacturing PMI unexpectedly rose from 55.3 to 56.7. Economists forecast a PMI of 53.5. With services accounting for more than 70% of the US economy, the numbers also delivered the FOMC hawks a reason to skew towards a 75% basis point rate hike in September.
On Wednesday, the NASDAQ 100 rallied by 2.59%, supported by the upbeat stats and US corporate earnings. PayPal (PYPL) jumped by 9.25% on a rosy earnings forecast, contributing to the NASDAQ 100 rally.
This morning, the NASDAQ 100 Mini was down 31.25 points.
Bitcoin Fear & Greed Index Falls to 30/100 on BTC Pullback
Today, the Fear & Greed Index decreased from 34/100 to 30/100. Following an unexpected increase to 34/100 on Wednesday, another bitcoin decline weighed on investor sentiment.
For the bitcoin bulls, the Index needs to move back towards 40/100 and the neutral zone to deliver BTC support.
On July 30, the Index had stood at 42/100 to briefly border the neutral zone that starts at 46/100.
Avoiding a return to sub-30/100 could prove BTC positive, with an Index move through to 46/100 likely to bring $30,000 into view.
Bitcoin (BTC) Price Action
At the time of writing, BTC was down 0.02% to $22,821. A range-bound start to the day saw BTC fall to an early low of $22,803 before rising to a high of $22,833.
BTC needs to move the $23,046 pivot to target the First Major Resistance Level (R1) at $23,395 and the Wednesday high of $23,616.
BTC would need a bullish morning session to support a return to $23,000.
An extended rally would test the Second Major Resistance Level (R2) at $23,964 and resistance at $24,000. The Third Major Resistance Level (R3) sits at $24,886.
Failure to move through the pivot would bring the First Major Support Level (S1) at $22,475 into play.
Barring an extended sell-off, BTC should avoid sub-$22,000. The Second Major Support Level at $22,124 should limit the downside.
The Third Major Support Level (S3) sits at $21,206.
Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. This morning, bitcoin sat above the 100-day EMA, currently at $22,713.
The 50-day narrowed to the 100-day EMA, while the 100-day EMA moved away from the 200-day EMA, the signals mixed for BTC.
A BTC fall through the 100-day EMA would bring the 200-day EMA, currently at $22,539, and S1 into play. However, moving back through the 50-day EMA, currently at $23,083, would bring the Major Resistance Levels into play.
Looking at the trends, BTC would need a move through the July high of $24,619 and $25,000 to target the June high of $31,956. A bullish cross of the 100-day EMA through the 200-day EMA would support a run at the June high.
From $31,200, BTC should have a clear run at the May high of $40,004. BTC needs to hold above the 50-day EMA to support the near-term bullish trend.
For the bears, the June 18 low of $17,601 would be the next target, with a fall through the July low of $18,768 likely to test investor resilience.
It is a mixed Wednesday session for the crypto top ten, with Solana (SOL) in the red to buck the top ten trend.
Geopolitics took a back seat as investors responded to upbeat US economic indicators and corporate earnings.
The Wednesday bullish session sees the total crypto market cap ending a four-day losing streak, with the market cap rising by $14 billion.
It is a mixed Wednesday session for the crypto top ten. Bitcoin (BTC) fails to revisit the $24,000 handle for the third consecutive session, while SOL suffers at the hands of a Solana wallet heist.
A busier day on the economic calendar provided the crypto market with direction. While geopolitics remained a focal point following Nancy Pelosi’s Taiwan visit, US economic indicators eased fears of a US recession.
In July, the ISM Non-Manufacturing PMI unexpectedly rose from 55.3 to 56.7. Economists forecast a PMI of 53.5. With services accounting for more than 70% of the US economy, the numbers delivered the FOMC hawks a reason to skew towards a 75% basis point rate hike in September.
US corporate earnings also delivered market support and a NASDAQ 100 breakout session. PayPal (PYPL) jumped by 9.25% on a rosy earnings forecast, supporting the NASDAQ 100’s 2.59% rally.
US corporate earnings have influenced the crypto market this earnings season. Crypto investors showed sensitivity to earnings results and outlooks from Amazon.com (AMZN), Apple Inc. (AAPL), Microsoft (MSFT), and Walmart (WMT).
The Total Crypto Market Cap Aims to End Four Day Losing Steak
On Wednesday, the total crypto market cap slid to a day low of $1,023 billion before rising to a high of $1,074 billion.
However, another bearish end to the session sees the market cap back down to $1,054 billion. The total crypto market cap is up $14 billion, reducing the August deficit to $5.7 billion.
A shift in market focus away from the US-China tensions to US economic indicators and corporate earnings delivered the boost. Cybercriminal activity failed the dampen the mood, despite the news of several attacks hitting the crypto wires.
The Crypto Market Movers and Shakers from the Top Ten and Beyond
It is a mixed Wednesday session for the crypto top ten.
BNB is up 6.41% to lead the way, with ADA (+2.62%) a distant second.
BTC (+1.07%), DOGE (+1.31%), ETH (+0.24%), and XRP (+0.81%) also find support.
Optimism (OP), Lido DAO (LDO), and Stacks (STX) are among the front runners.
OP is up 35.77%, with LDO and STX gaining 16.29% and 8.16%, respectively.
At the other end of the table, Cronos (CRO), Oasis Labs (ROSE), and yearn.finance (YFI) are among the biggest losers. CRO is down 5.38%, with ROSE and YFI falling by 3.17% and 3.03%, respectively.
Total Crypto Liquidations Ease Back in Positive Crypto Session
24-hour liquidations are declining ahead of the Thursday session, reflecting improving crypto market conditions. A pullback in 24-hour liquidations coincides with the crypto market ending the four-day losing streak that saw BTC fall back to the $22,600 handle before finding support.
At the time of writing, 24-hour liquidations stand at $120 million, down from $208 million on Wednesday morning.
Liquidated traders declined over the last 24 hours. At the time of writing, liquidated traders stand at 43,241 versus 78,905 on Wednesday morning.
While four-hour liquidations also signal steadying market conditions, one-hour liquidations reflect the late crypto pullback.
According to Coinglass, four-hour liquidations stand at $13.04 million versus $37.01 million on Wednesday morning. One-hour liquidations are down from $5.39 million to $3.88 million, while up from Tuesday’s $1.28 million (see hourly crypto market cap chart below).
Daily News Highlights
Solana (SOL) became the victim of a “multimillion dollar heist.”
New York regulator slapped Robinhood (HOOD) with a $30 million fine.
Nomad Bridge hackers returned $9 million in USDT and USDC after a $190 million exploit.
Cryptocurrencies have become increasingly popular for investment and transactions over the last two years.
Owing to the growing consumer interest in crypto, online merchants and retailers have started accepting payments in bitcoin and other cryptocurrencies.
Cryptocurrencies rose to fame as a payment method in the retail and tourism sector. Still, will the bearish blues hamper the future?
Over the last couple of years, the cryptocurrency sector has gone from being a speculative asset class to achieving massive mainstream adoption. Cryptocurrencies such as bitcoin (BTC), ether (ETH), Dogecoin (DOGE), and a few others saw a meteoric rise both in terms of retail and institutional adoption.
Investors’ risk appetite rose when the 2020 bull run took off; since then, cryptocurrency payments have also witnessed a sheer rise in number. As cryptocurrencies rose to fame, in 2021 amid high market euphoria, the top cryptocurrency bitcoin made an all-time high of $69,000.
Consequently, over the last two years, cryptocurrencies have become increasingly popular for investment and transactions. In fact, despite the recent long-drawn bearish market, crypto transactions and investments have become a standard part of the finance landscape.
On 14 January this year, Tesla started accepting Dogecoin as a mode of payment on select merchandise. However, it’s not just big institutions or retail that are inclining towards crypto payments; of late, tourism has also been touched by the crypto wave.
Retail x Cryptocurrencies
Cryptocurrencies have gained traction in the financial world in recent years. A growing number of traditional investors have allowed payments in crypto for consumers and clients.
Bitcoin and a few altcoins are becoming widely accepted as consumers, and online stores realize the potential of digital currencies. A report released by Goldman Sachs in January 2022 predicts that the digital economy is an $8 trillion-dollar opportunity.
It’s no wonder that online merchants and retailers have started accepting payments in bitcoin and other cryptocurrencies owing to the growing consumer interest in the space. This also allows these firms to position themselves as developing brands in the blockchain and Web 3.0 space.
Surprisingly, Microsoft was one of the early adopters of bitcoin in 2014 when it began accepting the cryptocurrency as payment to buy games, apps, and other digital content in the Microsoft Store for platforms like Windows Phone and Xbox.
Interestingly, modern digital payments giant PayPal began accepting bitcoin in September 2014 — three months before Microsoft boarded the crypto train.
Additionally, several retailers like Whole Foods, Home Depot, GameStop, Newegg, Starbucks, and AT&T now accept bitcoin and other forms of cryptocurrency in their retail stores.
Recent data shows that, as of 2022, an estimated global crypto ownership rates at an average of 4.2%, with over 320 million crypto users worldwide. Quite a few global brands, institutions, and retailers have now started to accept or are in plans to shift to crypto payments.
Tourism x Cryptocurrencies
While the retail sector often takes the limelight when talking about crypto payments, retailers aren’t the only ones showing interest in the space; Cryptocurrencies, Web 3.0, and blockchain technology now have use cases across industries, including tourism. Not only has the travel industry embraced digital assets, but the intersection of the two sectors has also given rise to a new genre of operations – crypto tourism.
Crypto tourism includes funded or booked trips using cryptocurrencies or going to crypto-friendly destinations. The phenomenon also includes traveling for crypto and blockchain events, seminars, and conferences which have increased significantly over the last few months after the pandemic subsided.
Interestingly, several airlines, tour operators, and travel aggregators have begun accepting crypto payments. Emirates Airlines had announced that it would soon accept bitcoin as a mode of payment. While Latvian carrier and Air Baltic already accept crypto payments.
Latvian airline airBaltic was the world’s first airline to accept bitcoin payments for its flight tickets in 2014. Now the company also accepts ether and Dogecoin. Moreover, airfare websites like Cheapair.com and Travala.com also accept crypto payments. In addition to that, tours and activity booking sites like GetYourGuide have also started accepting payments in Dogecoin.
In fact, nowadays, crypto geeks are traveling to several crypto-friendly tourist destinations where digital payments are widely accepted. Crypto-friendly destinations include places like the Bahamas, which has its own digital currency called the Sand Dollar.
Is the Future Bright?
Looking at the growth of cryptocurrencies as a payment method over the last five years presents optimism for the future. However, the recent bear market blues have significantly affected the sector, bringing the cryptocurrency market cap down to a low of $887.24 billion at press time from a high of nearly $3 trillion last year.
The bearish sentiment and rising interest rates have made investors skeptical of entering risky asset markets. Nonetheless, looking at the long-term growth, it can be said that cryptocurrencies could play a crucial role in shaping the future of payments.
The price of Ethereum (ETH-USD) has also dropped by nearly 70% over the past three months for the first time in the history of the largest altcoin by capitalization.
The crisis in the cryptocurrency market has led to massive layoffs and liquidations in many large crypto companies, and crypto lending platforms are now under threat of bankruptcy. Coinbase and Crypto.com announced more than 1400 layoffs, the largest crypto investment fund Three Arrows Capital went into liquidation, and lending company Celsius suspended withdrawals for customers.
Mining companies faced difficulties due to falling profitability and began to sell mined Bitcoins to pay their operating costs and cover loans.
External Factor Pressure
The price of Bitcoin is largely correlated with the situation in the US stock market. The stock sell-off has seriously impacted Bitcoin and the crypto market as investors are doing away with risky assets.
In the second quarter, the US Federal Reserve implemented two aggressive interest rate hikes to cope with record-high inflation, fueling fears of a global recession. As a result, the percentage-wise decline in traditional asset indices has reached double-digit values.
The hardest hit were the stocks of high-growth technology names — the Nasdaq Composite dropping by 22.4% in the second quarter and showing its worst quarterly performance over 14 years.
Bitcoin has never experienced such strong pressure from external factors as it is now. Since the beginning of the year, the cryptocurrency has lost 57.3% in price, twice as much as the S&P 500 (-20.6%). Those who bought shares of companies such as PayPal (-64.2%), Netflix (-70%) and Shopify (-77%), suffered more losses. Even classic portfolio strategies in the US are showing their worst performance since the 2008 global financial crisis.
There are no reasons in sight for a change in the global downtrend in the market. From the point of view of macro prospects, a change in the trend for Bitcoin is possible only with the change in the rhetoric of the US Federal Reserve to a friendlier stance towards the stock markets. The prerequisite is the normalization of inflation and the stabilization of the economy.
Even worse, the likelihood of a further price decline is only increasing. In his recent speech to the US Congress, the head of the Fed acknowledged that there is a possibility of a recession. Previously, high growth in food prices against the backdrop of low unemployment was a typical picture on the eve of economic downturns.
The negative sentiment towards digital currencies on the part of regulators was exacerbated by the collapse of the TerraUSD stablecoin, as a result of which global authorities started talking about the shortcomings of the digital currency market and the need for stricter regulation.
No End In Sight?
Improvements in the stock exchange market are unlikely in the near future, which means that the price of Bitcoin in the third quarter will not demonstrate growth. A lot will also depend on geopolitics, new economic measures, prices for commodities, and the results of the elections to the US Congress in early November.
Some experts predict a possible rebound in the price of Bitcoin to $25,000. But, subsequently, there is a high chance that the cryptocurrency will continue to fall and begin a long consolidation in search of price lows below the $10,000 mark. Psychological factors are also playing against Bitcoin.
During a downtrend, positive news does not contribute to cryptocurrency exchange rates growth, while negative news, on the contrary, has a negative effect on the price. New price lows can provoke traders to a new reset of the cryptocurrency throughout the market. On the other hand, it can be an entry point for market newcomers looking to take advantage of the low price.
In many ways, long-term investors are guided by 2024, when the next Bitcoin halving will take place. The price of the coin will most likely update its historical highs after the landmark event, just as it has in the past history of the oldest cryptocurrency.
In any case, it can be quite a risky venture to buy any cryptocurrency now, as top instruments may well lose another 50% to 70% of their current value.
After nearly two years, U.S. PayPal users can move their cryptocurrencies to external wallets.
The payments provider wants to remain competitive in the crypto sector.
PYPL stock is up marginally but has lost 55% since the beginning of 2022.
Payments giant PayPal enabled crypto trading and holding for select users in October 2020. However, it restricted what they could do with those tokens by preventing them from leaving the platform.
On June 7, the company announced that it would finally allow users to transfer their crypto assets to external wallets.
However, as with crypto trading, the freedom of token movement is only available to select customers in the United States, according to the California-based company.
PayPal (PYPL) acknowledged that users had been requesting this feature since it enabled crypto access nearly two years ago.
SVP and general manager of blockchain, crypto, and digital currencies at PayPal, Jose Fernandez da Ponte, told TechCrunch:
“This feature was the most demanded from our users since we began offering the purchase of crypto on our platform,”
Users can now move their Bitcoin (BTC), Ethereum (ETH), or other supported cryptocurrencies into exchange wallets or hardware devices. There will be network fees to pay, and PayPal will take its cut of transfers out of its ecosystem.
“If users have crypto somewhere else and want to consolidate, they can bring it to PayPal from external addresses,” Fernandez da Ponte added before confirming that “they can also send crypto to anyone who is in the PayPal system.”
The move was unavoidable if the company wanted to remain competitive in the crypto industry. Fernandez da Ponte confirmed PayPal’s ambitions in the sector, stating:
“We see ourselves as a conduit between the fiat, or traditional finance, environment and the web3 environment. We are enabling connectivity to other wallets, exchanges, and applications.”
He added that people are still adopting crypto despite the current market conditions. “This move shows we’re in this for the long term,” he said before confirming that PayPal would continue to invest in the space and “stay the course.”
U.S. PayPal users must comply with additional KYC (know-your-customer) procedures if they want to transfer crypto assets.
The move was catalyzed by the transition from a “conditional” to a “full” BitLicense following approval from the New York Department of Financial Services.
PayPal Stock Boosted
PayPal stock saw a marginal 2.5% gain on the day on June 7 to change hands for $88.31 in after-hours trading.
However, like most tech stocks, it has been hammered recently, dropping more than 55% since the beginning of the year. PYPL is down more than 70% since its all-time high of just over $300 in mid-2021.
Snoop Dogg and Ken Howery plan to buy into Ice Cube’s BIG3 basketball team with NFTs.
Last week, DeDogsDAO, a Solana NFT project, purchased 25 NFTs to buy BIG3 team, the Killer 3s.
Basketball’s love affair with NFTs continues to blossom, supported by the NBA and the BIG3 League.
Snoop Dogg and Ken Howery, co-founder of PayPal, jump into Ice Cube’s BIG3 league with plans to purchase Bivouac. In partnership, they will buy 25 Fire-Tier NFTs to acquire the team.
Basketball is at the forefront of innovation and Web3 adoption. The NBA’s Top Shot was among the first sports NFT marketplaces launched in 2020.
Snoop Dogg is particularly active within the NFT space, which continues to draw in big names.
Snoop Dogg and Ken Howery buy Ice Cube’s Big3 team Bivouac
On Saturday, BIG3 announced the news of Snoop Dogg and Ken Howery’s plans to purchase all 25 Fire-Tier NFTs of Big3 League team Bivouac.
According to the announcement, “today, the BIG3 announced that Snoop Dogg – the legendary entertainer and member of Mt Westmore – and Ken Howery – co-founder of PayPal and successful venture capitalist – have teamed up to purchase 25 Fire-Tier editions of Bivouac, receiving ownership-like value and utility in the team.”
Ice Cube said:
“We are absolutely thrilled to have Snoop, Ken, and their communities on board with the BIG3.”
“Having someone with Ken’s knowledge and experience wanting to be a part of our league demonstrates that we are moving in the right direction. Snoop is an undisputed legend who has jumped headfirst into the Web3 space and clearly understands the importance and the value of what we are trying to create.”
On April 23, Big3 tweeted a Whitepaper on Big3 team ownership.
The announcement said:
“The owners of Big3 Ownership NFTs will receive rights and deliverables of high actual value and utility in five areas: Ticketing, Merchandise, Experience & Activations, Direct Communication, and Voting Rights.”
Global money is continuing to flow into the US Dollar making it one of the primary safe-haven trades. This may eventually trigger a broader and deeper selloff in U.S. stocks. As the USD continues to strengthen corporate profits for US multinationals will begin to disappear.
It’s imperative to assess your trading plan, portfolio holdings, and cash resources. Experienced traders know what their downside risk is and adapt as needed to the current market environment.
If you still have money invested in Amazon, Netflix, PayPal, or one of the many other stocks that are sinking fast there is no easy way out. Your options are:
Hold tight and “hope” for a rally to recover part of your money.
Reduce some of your position to “limit your downside” in case the bottom really falls out, and then sell the balance after a bounce of 5-8%.
Move to cash, “bite the bullet”, get a good night’s sleep, take a break, reassess, and live to come back and trade another day.
NASDAQ Enters Bear Market Territory
The NASDAQ peaked at around 3.1618% of its Covid 2020 high-low range the week of November 21, 2021.
THEN – the QQQ ETF’s first swing down was -21% over a 16-week period (4 months).
THEN – a brief 3-week rally, retraced around 61.8%.
THEN – resumed its downtrend by taking out its previous low.
THEREFORE – according to the -20% Bear Market Rule: QQQ – 23.32% from its peak and -21.27% YTD is in a bear market.
QQQ • Invesco QQQ ETF Trust • NASDAQ • Weekly
AMAZON Breaking Down -35%
Amazon AMZN peaked at around 3.1618% of its Covid 2020 high-low range the week of July 12, 2021.
THEN – AMZN made a double top the week of November 15, 2021.
THEN – the first swing down was -28.91% over a 16-week period (4 months).
THEN – after a brief 4-week rally, retraced a little more than 61.8% of its initial downswing.
THEN – resumed its downtrend by taking out its previous low.
THEREFORE – according to the -20% Bear Market Rule: AMZN -35.74% from its peak and -25.39% YTD is in a bear market.
AMZN • AMAZON.COM, INC. • NASDAQ • Weekly
Netflix Plummets -72% In 5 Months
Netflix NFLX peaked at around 2.382% of its Covid 2020 high-low range the week of November 15, 2021.
THEN – NFLX’s first swing down was -17% over a 5-week period.
THEN – a brief 3-week rally, NFLX retraced only 25%.
THEN – the second swing down was -43% over a 4-week period.
THEN – only less than a 2-week rally retraced around 33%.
THEN – resumed its downtrend by taking out its previous low.
THEREFORE – according to the -20% Bear Market Rule: NFLX – 72% from its peak and -68.40% YTD is most definitely in a bear market.
NFLX • NETFLIX, INC. • NASDAQ • Weekly
PAYPAL Drops -73% In 9 Months
PayPal PYPL peaked at around 5.1618% of its Covid 2020 high-low range the week of February 16, 2021.
THEN – PYPL put in a double top the week of July 26, 2021.
THEN – the first swing down was -14% over a 4-week period.
THEN – a brief 4-week rally, retraced about 61.8%.
THEN – the second swing down was -39% over a 14-week period (3.5 months).
THEN – a 6-week sideways rally retraced only around 10%.
THEN – resumed its downtrend by taking out its previous low.
THEREFORE – according to the -20% Bear Market Rule: PYPL – 73% from its peak and -53.39% YTD is most definitely in a bear market.
PYPL • Paypal Holdings, Inc. • NASDAQ • Weekly
Drawdowns Have a Critical Impact
We need to remember the larger the loss the more difficult it is to make up. A loss of 10% requires an 11% gain to recover, however, a 50% loss requires a 100% gain to recover, and a 60% loss requires an even more daunting 150% gain to simply return to break even.
Recovery time also varies significantly depending upon the magnitude of the drawdown. A 10% drawdown can typically be recovered in weeks or a few months while a 50% drawdown may take several years to recover. Depending on a trader’s age they may not have the time to wait on the recovery nor the patience. Therefore, successful traders know it’s critical to keep their drawdowns within reason as most of them this principle the hard way!
Prepare yourself for Market Volatility
Especially in times like these, traders must understand where opportunities are and how to turn this knowledge into profits. As our models generate new information about trends or a change in trends, we will communicate these signals expeditiously to our subscribers and to those on our trading newsletter email list. Our core objective is to protect our valuable capital while identifying suitable risk vs reward opportunities for profits in new and emerging trends.
What Strategies Can Help You Navigate the Current Market Trends?
Learn how we use specific tools to help us understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, we expect very large price swings in the US stock market and other asset classes across the globe. We believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern begin to drive traders/investors into Metals and other safe-havens.
Historically, bonds have served as one of these safe-havens, but that is not proving to be the case this time around. So if bonds are off the table, what bond alternatives are there and how can they be deployed in a bond replacement strategy?
We invite you to join our group of active traders and investors to learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
Chief Market Strategist
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On Friday, news hit the wires of Binance sharing user data with Russian authorities.
Overnight, Binance responded to a Reuters report, stating that the news was “categorically false.”
Before the user data story, Binance had announced limited services to Russians in response to the latest EU sanctions.
World-leading crypto exchange Binance has had plenty of news coverage in recent months.
In February, crypto exchanges were back in the spotlight following the Russian invasion of Ukraine.
In response to Ukrainian government calls to freeze all Russian crypto accounts, Reuters reported that Binance would block Russian client accounts targeted by sanctions but not freeze all accounts.
Binance was not alone in its position on account freezes, with several other leading exchanges choosing a similar path.
Binance Calls Out Reuters with False Claim
On Friday, news hit the wires of Binance sharing client data with Russia. According to a Reuters Special Report, Binance’s regional head met with Russia’s financial intelligence unit in April 2021. Reportedly, Russian intelligence wanted Binance to share client data to help the fight against crime.
Reuters went on to say that Russian intelligence was trying to trace Russian opposition leader Alexei Navalny’s Bitcoins (BTC) amounting to millions of dollars.
Binance’s head of Eastern Europe and Russia, Gleb Kostarev, reportedly consented to the request, saying to a “business associate that he didn’t have much choice in the matter.”
Reuters noted that Binance has continued to operate in Russia since the invasion of Ukraine. This is despite other payment platforms, including PayPalceasing operations in the country.
In response to the Reuters report, Binance has denied that it helped Russian intelligence track down donations to Alexei Navalny.
“Suggestions that Binance shared any user data, including Alexei Navalny, with Russian FSB controlled agencies and Russian regulators are categorically false.”
“On the specific matter of not sharing data – today, any government or law enforcement agency in the world can request user data from Binance as long as it is accompanied by the proper legal authority. Russia is no different. Fulfilling disclosure obligations to the authorities in each jurisdiction is a large part of becoming a regulated business and Binance fulfills its legal obligations.”
Binance stated that it plans to lodge a formal complaint to Reuters. The exchange also shared a full email exchange with Reuters on Binance operations in Russia.
Binance Announces Limited Services to Russian Users
On Thursday, Binance announced that it will restrict the Russian account holders with more than €10,000 to withdrawal-only mode.
According to the announcement,
“Following the EU’s fifth package of restrictive measures against Russia, Binance is required to limit services for Russian nationals or natural persons residing in Russia, or legal entities established in Russia, that have cryptos exceeding the value of 10,000 EUR. As such, we require you to complete your proof-of-address verification.”
“Accounts that classify under this restriction will be put into withdrawal-only mode. No deposits or trading will be permitted on these accounts. The limit also covers all spot, futures, custody wallets, and staked and earned deposits. In addition, all deposits to accounts for Russian nationals or natural persons residing in Russia, or legal entities established in Russia with over 10,000 EUR will be restricted.”
The latest announcement comes despite Binance CEO Changpeng “CZ” Zhao reportedly stating that his exchange “would resist calls to limit services to normal people,” calling such a move unethical.
“We’re excited to have MAS as our regulator, and with their oversight, we’ll be able to safely accelerate consumer adoption of digital assets globally by powering regulated solutions for the world’s biggest enterprises.”
MAS sets a High Bar for Crypto-Related Firms
The MAS does not readily hand out licenses, as Binance discovered in 2021. Last year, Binancereportedly withdrew its Singapore license application for failing to meet MAS AML and KYC requirements.
A small number of other crypto-related shops have been more fortunate, however. In October, DBS Vickers obtained a license to offer digital payment token services.
At the time, the Australian crypto exchange Independent Reserve was reportedly the only foreign entity to hold a Singapore license to allow digital payment token services.
Before this week, only FOMO Pay and TripleA had obtained digital payment token services licenses alongside DBS Vickers and Independent Reserve.
This week, Swiss crypto bank Sygnum received in-principal approval to expand Singapore Capital Market Services (CMS) license. The Swiss crypto bank had previously held a Singapore Capital Markets Services (CMS) license for asset management since 2019.
The in-principal approval will allow Sygnum Bank to provide corporate finance advisory services, deal with capital market products, and provide custodial services.
Paxos and Sygnum Approvals a Boost for Hub Aspirations
Singapore and the MAS have been particularly active in the digital asset space. The Republic’s status as a global digital asset hub continues to evolve despite a high bar for platforms to meet.
Singapore’s high bar is evident in the number of applications the MAS has rejected. According to media reports, the MAS turned down 103 of 176 by December 2021.
In 2021, Binance withdrew its Singapore application for reportedly failing to meet MAS KYC and AML requirements. Since then, the MAS has also banned crypto exchange advertising in public.
This week’s news could be a shift in attitudes towards crypto-related firms. News of Singapore’s sovereign wealth fund Temasek making strategic investments into the space could support such a view.
Temasek reportedly led a fresh fundraising round for the Australian NFT startup Immutable. A $200m funding round took the value of Immutable to $2.5bn, with investors including Tencent Holdings, Mirae Asset, and Declaration Partners, among others.
In February, Temasek had led a $200m round for Amber Group, a global digital assets platform.
Payment giant PayPal has excluded NFT transactions above $10,000, effective March 21.
Per a revised seller protection program, PayPal laid out its amendments, affecting non-fungible tokens (NFTs). It stated that items represented by NFTs including art, collectibles, and media both physical and digital that are over $10K in transaction amount are ineligible under the program.
The merchant-focused program aims to protect online sales transactions from chargebacks, reversals, and fraud. The seller protection boots if a transaction gets reversed due to successful chargeback by a buyer.
The new norm follows a number of instances of NFT thefts and scams that cropping up recently. Many NFT buyers think that there might be previous instances of NFT frauds on the payment platform, which has led to this amendment.
I’ve made multiple transactions over $10,000 with PayPal that qualified for buyer protection — it’s how I manufacture stuff!
I’m pretty sure someone paid a lot for an NFT, got scammed, and PayPal had to pay out for buyer protection, and that’s why we’re seeing this change.
The revision of seller protection norms come at a time when tax authorities in the U.K. seized NFTs linked to an alleged $1.8 million NFT fraud case. With increasing NFT scams, several sites have cautioned consumers to check if they are legit.
The U.S. Treasury also revealed that the burgeoning NFTs can be used for money laundering.
Some of the common NFT scams are fake minting, deadlinks, and discord hacks, where fraudsters gain administrator-level access to a discord server and post a fake minting link.
“Having a system that is managed with professional validators makes it feasible to fully protect consumers from NFT frauds,” Tom Anderson, CEO Devv.io, a blockchain and NFT security company, told FXEmpire.
PayPal’s move restricting NFT transactions that are beyond $10,000, not only prevents buyers from losing money in a lump in case of fraud but also helps cut scammers.
PayPal’s Pro-Crypto Moves
PayPal has been one of the early adopters in the crypto space. The payments platform announced the inclusion of cryptocurrencies such as Bitcoin and Ethereum for purchases.
The new crypto-friendly feature allowed U.S. PayPal account holders to hold cryptocurrencies and shop with them at its 26 million merchants. The California-based company also extended the service to its peer-to-peer payment app – Venmo in 2021.
Additionally, PayPal and Venmo have let their users who dabble in cryptocurrencies, move their digital coins to third-party wallets such as Coinbase.
Earlier this year, PayPal announced plans to launch its own stablecoin dubbed ‘PayPal Coin’ backed by the U.S Dollar. The company also formed an advisory council for cryptos and blockchain, involving six individual experts in the industry.
Cybercrime surged in 2021 and hackers and other cyber criminals are looking for another bumper year this year. As cyber criminals become more sophisticated, crypto platforms need to be even smarter to protect investors and users from hacks and other types of criminal activity.
Ransomware, Hacks, and other Illicit Activity Hurt Digital Asset Value
Late last week, we reported on prelim ransomware numbers for 2021 and likely finalized numbers. Based on prelim figures and upward revisions to 2020 numbers, ransomware alone could hit more than $1bn in 2021. There was also news of North Korea funding its missile program with stolen crypto.
With the likes of North Korea actively hitting the crypto market for source of funds, government scrutiny has also increased. In late January, the White House announced an imminent crypto executive order to task agencies with crypto oversight in the interest of national security.
As governments and regulators look to take a more active role in the crypto market, crypto platforms will also need to step up or face the wrath of regulators.
The issue doesn’t just lie with crypto exchanges, however, with the NFT marketplace and the Metaverse also considered as a medium for illegal activity. China, India, the UK, and a number of other governments have highlighted the need to clamp down on illicit activity.
Cardano and Coinbase Look Outside to Tighten Security
This week, the Cardano Foundation (ADA) announced a 6-week promotion running from 14th February to 25th March. The Foundation doubled its bounty amounts for the period. Hackers can earn up to $20,000 for identifying critical Cardano Node security vulnerabilities. The security community can also earn up to $15,000 for identifying critical Cardano-Wallet security vulnerabilities.
Coinbase was also in the news this week, with a lone hacker reportedly assisting Coinbase with a security flaw. A hacker going by the name Tree of Alpha tweeted over the weekend of a “potentially market-nuking” security flaw. Tree of Alpha tweeted a submission of a hacker1 report but also the pressing need for direct contact with the Coinbase team.
Anyone here can get me a direct line with someone at @coinbase , preferably management or dev team, possibly @brian_armstrong himself?
I'm submitting a hacker1 report but I'm afraid this can't wait. Can't say more either, this is potentially market-nuking.
Hackerone is a platform started by hackers and security experts with the aim of making the internet a safer place. The platform partners with hackers to uncover security issues for customers before they are exploited by criminals. Users include Starbucks, Nintendo, PayPal, Spotify, Toyota, the European Commission, among others.
The collaboration and effectiveness of Hackerone was evident in the Coinbase fix. Brian Armstrong himself replied directly to Tree of Alpha to give thanks.
In a press release yesterday Apple announced the new Tap to Pay feature for the iPhone. This feature enables millions of Apple Pay merchants to easily facilitate transactions using a simple tap regardless of the payment method.
Apple announced that apart from Apple Pay itself, contactless credit and debit cards as well as other digital wallets will also be able to make the transactions without the need of any third-party hardware or payment gateway.
Apple Takes a Bite of Crypto
Using the NFC technology the company will be providing its iPhone XS and higher model holders, the opportunity to conduct their transactions entirely wirelessly. In line with the announcement, Apple Pay and Wallet’s Vice President Jennifer Bailey stated:
“As more and more consumers are tapping to pay with digital wallets and credit cards, Tap to Pay on iPhone will provide businesses with a secure, private, and easy way to accept contactless payments and unlock new checkout experiences using the power, security, and convenience of iPhone”
She further added:
“In collaboration with payment platforms, app developers, and payment networks, we’re making it easier than ever for businesses of all sizes — from solopreneurs to large retailers — to seamlessly accept contactless payments and continue to grow their business.”
Now how this translates into crypto payments is that recently, Coinbase and Crypto.com both launched their own debit cards. The Coinbase Card and the Crypto.com Visa Card allows user to basically use their acquired cryptocurrencies as payment methods.
Both the companies further integrated with payment giants Apple Pay and Google Pay. This enabled users to facilitate payments using their cryptocurrencies via either of the two apps. On the process of these transactions, Coinbase said:
“Coinbase will automatically convert all cryptocurrency to US Dollars and transfer the funds to your Coinbase Card (less conversion fees) for use in purchases and ATM withdrawals.”
Thus with Apple now activating the Tap to Pay feature, accepting said payments directly to and fro an iPhone will become easier for every business or retailer.
At the moment more than 90% of all US retailers accept Apple Pay and with this feature pretty much any business or retailer with an iPhone can accept payments with Tap to Pay. Put simply crypto can be used as a transaction method virtually any and everywhere in the US.
In today’s world, contactless payments have become a necessity as well as a preferred option by millions around the world. And that industry is severely dominated by Apple Pay.
The only other player in this industry to challenge payments with crypto is Google Pay, but it sadly only has a 3% domination in the American markets. Apple Pay on the other hand holds a colossal 92% domination.
However, that hasn’t stopped Google from trying. Recently, Google hired a PayPal veteran in order to begin testing payments with crypto. On the same Google’s president of Commerce told Bloomberg:
“Crypto is something we pay a lot of attention to. As user demand and merchant demand evolves, we’ll evolve with it.”
So with Apple preparing to roll out their Tap to Pay feature by later this year, not only are they pushing crypto adoption into the mainstream, but they are also providing Google some time to pick up the pace and gain a foothold in the market.
Fintech giant Paypal in their recent press release introduced their first-ever advisory council of blockchain, crypto, and digital currencies.
The council includes leading experts from the fields of distributed technology, as well as specialists of the economic and regulatory understanding pertaining to blockchain and crypto.
PayPal’s New Council
The payment processing giant stated that in order to provide better digital financial services in the future, they have acquired ‘world’s best leaders’ in order to better understand the opportunities and challenges this field presents.
In addition to the same PayPal stated:
“To support not only our current and future products in the space but our broader mission of leading the way towards a more affordable, efficient and inclusive digital financial system, we have established a cross-disciplinary advisory council on Blockchain, Crypto and Digital Currencies (BCDC) comprised of some of the world’s leading experts in cryptography, distributed technology, regulation, economics, and capital markets.”
The six members that make up the advisory council include Peter L. Briger, Jr. – Co-CEO of the Fortress Investment Group; Chris Brummer – Faculty Director, Institute of International Economic Law; Dr. Shafi Goldwasser – winner of the Turing Award and the Director of Simons Institute for the Theory of Computing, UC Berkeley.
Along with them the team also has Timothy Massad – Former Chairman of the U.S. Commodity Futures Trading Commission from 2014-2017; Dr. Neha Narula – Director, MIT Digital Currency Initiative; as well as AntoinetteSchoar – Stewart C. Myers-Horn Family Professor of Finance and Entrepreneurship at the MIT Sloan School of Management.
Whether the council will be directly responsible for the expansion of PayPal’s crypto crusade is uncertain as well as what next step the fintech giant will be making in regards to crypto.
Last year the company enabled its customers to buy, hold and sell cryptocurrencies from their accounts as well as make transactions across its 26 million merchants.
The PayPal Slip
In the midst of their crypto expansion, PayPal recently suffered a major blow in the stock market when its shares slumped by over 25% last week. The mixed earnings it suffered in the final quarter of 2021 ended up disappointing investors.
This even led to many analysts slashing their predictions for PayPal’s price targets by as much as 40%
If their crypto move pays off then the same targets could be revived provided their council proves to be successful.
Shares of Snap jumped after the company released its fourth-quarter report. Snap reported revenue of $1.3 billion and adjusted earnings of $0.22 per share, easily beating analyst estimates on both earnings and revenue. Snap stated that 2021 was its first full year of positive operating cash flow and free cash flow.
Daily active users (DAUs) totaled 319 million, up 20% on a year-over-year basis. This was a material success compared to the recent report from Meta Platforms, which showed a decline in DAUs and led to a major sell-off of Meta stock.
The average revenue per user (ARPU) increased from $3.49 in Q3 2021 to $4.06 in Q4 2021, serving as an additional bullish catalyst for Snap stock.
Yesterday, Snap stock was under significant pressure as traders sold the company’s shares “in sympathy” with the sell-off in Meta stock. However, Snap’s quarterly report was so strong that the stock gained more than 45% in just one trading session.
What’s Next For Snap Stock?
Snap’s gains look impressive, but traders should keep in mind that the company’s shares touched highs near the $83 level in September 2021, so the stock is still down by more than 55% from its all-time high levels.
In 2022, Snap is expected to report earnings of $0.53 per share, so the stock is trading at 68 forward P/E. Earnings estimates will likely move higher after the strong earnings report, but the stock will still remain in the high-PE zone.
In this light, the near-term performance of Snap stock will depend on whether the market is ready to buy into high-PE stocks again. Recent weeks have been volatile as traders were worried about high inflation and higher Treasury yields.
The yield of 10-year Treasuries is already close to the 2.00% level, which could put more pressure on expensive tech stocks. The recent sell-offs in high-profile names like Meta Platforms, Netflix, and PayPal have also hurt sentiment. Thus, it remains to be seen whether traders will be ready to push Snap stock higher after the strong one-day move.