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Bitcoin Price Is Under Pressure on Two Fronts: China and the United States

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On Friday (July 10), Bitcoin is trading around $9,200, seemingly under pressure by events in China and the United States.

Let’s start with China.

The CSI 300 is “a capitalization-weighted stock market index designed to replicate the performance of the top 300 stocks traded on the Shanghai Stock Exchange and the Shenzhen Stock Exchange”.

Yesterday (July 9), the CSI 300 closed at 4840.77, which means that it had gone up by 17.78% since June 29, i.e. in just nine trading sessions.

On Monday (July 6), the CSI 300 closed over 250 points (i.e. 5.67%) higher at 4,670.09, reaching a level last seen in June 2015, after “a front page editorial in state-owned China Securities Journal” (published on July 6) talked about the “wealth effect of the capital markets” and suggested that a “healthy bull market” was important for the economy at this time (i.e. after the damage done by the COVID-19 pandemic).

However, according to a report published by Bloomberg earlier today, it seems that the Chinese government may have decided that the country’s stock market was getting overheated and that the government may have already started to signal its intention “to avoid a replay of 2015, when they were wrong-footed by both the scale of the stock market’s boom and severity of its bust.”

Bloomberg says that the first signs of the government’s discomfort with the extreme bullish market sentiment came late yesterday when two state-owned funds—China’s National Council for Social Security Fund (China’s national pension fund) and National Integrated Circuit Industry Investment Fund Co.—announced that they were planning to “trim holdings of stocks that soared this week.”

Also, per this report, at the start of the day, “the state-run China Economic Times warned about the dangers of a ‘crazy’ bull market, while Caixin reported that regulators had asked mutual fund companies to cap the size of new products.”

Traders and other market observers in China seem to believe that these moves “amounted to a warning from Chinese officialdom that the country’s world-beating equity boom has gone too far, too fast.”

The CSI 300 ended the day 87.64 (or 1.81%) to close at 4,753.13, as you can see in the one-month chart below from Google Finance:

CSI 300 Chart by Google Finance on 10 July 2020.png

Niu Chunbao, a fund manager at Shanghai Wanji Asset Management Co., told Bloomberg:

“The signal could not be clearer — stocks have just become too hot for the regulators’ liking. A slight dip or so may put their minds more at ease at this point.”

A gradually rising stock market in China is good for the Chinese economy since “the wealth effect could help revive virus-crushed consumer demand” and “higher share prices will make it easier for indebted companies to finance themselves.”

However, a cooling of stock market sentiment could impact the price of Bitcoin due to the amount of Bitcoin purchased by Chinese retail and institutional buyers via Tether and OTC desks since the wealthier they feel, the more likely it is that they will speculate in an even riskier asset class such as Bitcoin.

Yesterday (July 9), Qiao Wnag, Messari’s former Director of Product, talked about the correlation of crypto with the CSI 300:

As for the United States, there are three two factors that could affect the U.S. economy and thereby U.S. stocks:

  • the outcome of the U.S. 2020 presidential election in November; and more importantly
  • the management of the worsening COVID-19 crisis in the U.S.

Currently, the Democratic Party’s presumptive nominee Joe Biden appears to be leading in most polls, and some investors fear that if he were to be elected U.S. president, it could be bad for the U.S. stock market since he has said that he plans to increase corporation tax from 21% to 28% and to end “shareholder capitalism.”

Soeaking at event in Pennsylvania yesterday, he said:

“Throughout this crisis, Donald Trump has been almost singularly focused on the stock market, the Dow and Nasdaq. Not you. Not your families.

“If I am fortunate enough to be elected president, I’ll be laser-focused on working families, the middle-class families I came from here in Scranton. Not the wealthy investor class. They don’t need me.”

As for the COVID-19 situation in the U.S., according to CBS News, on Thursday 63,200 cases were reported, which was “another all-time, single-day high for new confirmed infections”, which was up from the previous high (60,000) reported on Tuesday (the data came from Johns Hopkins University).

California, Florida, and Texas remain three of the worst affected states, and they have sadly “just recorded their highest daily death tolls yet.”

Carl Quintanilla, who is a principal anchor of CNBC’s “Squawk on the Street” tweeted earlier today:

CNBC reported yesterday that “nationally, coronavirus cases were growing in 40 states, as of Wednesday, based on a seven-day moving average.”

Since not everyone in the U.S. can agree on the best way to control the spread of COVID-19, unfortunately, it could be some time before the situation significantly improves, and in the meantime, it may become necessary for several states to re-introduce lockdown measures that could further negatively impact U.S. consumer confidence and the financial future of U.S. companies.

At the time of writing (as of 17:10 UTC on July 10), the Dow Jones Industrial Average (DJIA), the S&P 500, and the Nasdaq are at 25924.39 (up 0.85%), 3166.99 (up 0.47%), and 10551.32 (up 0.03%) respectively. 

As for Bitcoin, per data from CryptoCompare, as of 17:26 UTC on July 10, it is trading at $9,216, down 0.11% in the past 24-hour period:

24 Hour CC Chart for BTC-USD on 10 July 2020.png

As digital asset exchange Kraken reminded us in a blog post published yesterday, according to its Bitcoin Volatility Report for June 2020, last month, Bitcoin’s correlation with the S&P 500 strengthened (“flipping from 0.13 to 0.52”), which means that, assuming this positive correlation continues, if the S&P 500 takes a fall, Bitcoin could also end up with a bruise.

Featured Image by “1643606” via Pixabay.com

Source: https://www.cryptoglobe.com/latest/2020/07/bitcoin-price-is-under-pressure-on-two-fronts-china-and-the-united-states/

Blockchain

Billionaire Mike Novogratz Builds Bitcoin Position on Prescience

The sentiment in the crypto community has shifted now that the bulls are back in charge. With the bitcoin price trading within striking distance of $12,000, investors know from experience that this could be just the beginning of another major rally. Billionaire investor Mike Novogratz seems to think so. The Galaxy Digital chief tweeted to […]

The post Billionaire Mike Novogratz Builds Bitcoin Position on Prescience appeared first on BeInCrypto.

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The sentiment in the crypto community has shifted now that the bulls are back in charge. With the bitcoin price trading within striking distance of $12,000, investors know from experience that this could be just the beginning of another major rally.

Billionaire investor Mike Novogratz seems to think so. The Galaxy Digital chief tweeted to BeInCrypto that he added to his bitcoin position on Oct. 19, a decision made on prescience leading into a rally on Oct. 20.

And it’s what he had to say about where the BTC price is headed that could give investors a chance to capitalize on the momentum.

Novogratz expects that once bitcoin takes out $12K, not only does it move higher from there but it will do so quickly. He points to the fundamentals, including “too much demand from new participants,” as the catalyst. Novogratz told BeInCrypto,

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Bitcoin’s Rough Resistance

The $12K level is an important threshold for several reasons. Many consider it tough resistance and the BTC price has not been able to overcome it of late. Recent sessions have seen it remain stuck between the $10,000 and $11,000 area.

Once bitcoin manages to reattain this milestone, the last time of which was August 2020, pundits argue it could be off to the races again.

Bitcoin bull Ivan on Tech, who posts daily videos on YouTube where he has more than 260,000 subscribers, has been giving the play-by-play. He pointed out on Oct. 20 that the bitcoin price actually went straight to $12,000 but got rejected there, which according to him is “all according to plan.”

Once the bitcoin price successfully breaks this level, Ivan on Tech is expecting big things, exclaiming in a tweet,

“Bitcoin will break $20,000 like a massive BOSS.”

The entire crypto community is likely glued to their screens to see if history repeats and the bitcoin price rallies to the moon.

Source: https://beincrypto.com/billionaire-mike-novogratz-builds-bitcoin-position-on-prescience/

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Blockchain

Latvian Financial Watchdog Issues Crypto Fraud Warnings

Latvia’s  Financial and Capital Market Commission (FCMC) has issued a notice to investors to refrain from indulging in malicious digital currency platforms and fake opportunities. The regulator also listed some “signs of fraud” to help individuals identify these deceptive practices. In an official statement published by the FCMC, investors were urged to stay vigilant against […]

The post Latvian Financial Watchdog Issues Crypto Fraud Warnings appeared first on BeInCrypto.

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Latvia’s  Financial and Capital Market Commission (FCMC) has issued a notice to investors to refrain from indulging in malicious digital currency platforms and fake opportunities.

The regulator also listed some “signs of fraud” to help individuals identify these deceptive practices.

In an official statement published by the FCMC, investors were urged to stay vigilant against the growing number of investment opportunities that target individuals across different channels.

According to the FCMC, cryptocurrencies, and associated platforms within Latvia function with a lower degree of regulation when compared to many other financial markets. It claims this makes attacks more prevalent in the country.

The regulators also mentioned that these attacks might be difficult to detect at first because they oftentimes use “the names and images of renowned companies.”

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Uptick in Fraud

Many online advertisements used for fraud purposes lead unsuspecting victims to fancy websites that give them a false sense of security.

The FCMC noted that online fraudsters are constantly on the watch for new ways to extort money from potential victims and that they will often contact investors via email or other popular social media platforms, and even sometimes by phone.

The scammers normally try to mislead investors into buying currencies that don’t exist, refuse withdrawals, or demand that they pay exorbitant amounts for transfers of funds.

The FCMC has welcomed residents to check with the watchdog in order to verify the legitimacy of any platforms or services before actually investing any money. The regulator also listed verified financial service providers on its website.

Source: https://beincrypto.com/latvian-financial-watchdog-issues-crypto-fraud-warnings/

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Blockchain

Upgraded XMR Becomes Best Performer Among Top 15 Coins: Analysis

The upgraded XMR coin becomes the best performer among the top 15 coins by market capitalization as we are reading more in our latest monero news. The privacy-focused cryptocurrency became the best performing coin among the top 15 tokens by market cap after it launched the network update over the past week. The upgraded XMR […]

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The upgraded XMR coin becomes the best performer among the top 15 coins by market capitalization as we are reading more in our latest monero news.

The privacy-focused cryptocurrency became the best performing coin among the top 15 tokens by market cap after it launched the network update over the past week. The upgraded XMR ranked 14th by market cap and trades at $127, increasing by 5% in the day, trimming the weekly losses to less than 4%. At the same time, other major coins from the top 15 which are less than 3% in a day. XMR increased today after a slight reaction to the expected update which was launched on Saturday.

Initially announced in August 2020, Monero’s latest Oxygen Orion update brings some more important improvements to the network at a time when the regulators are getting increasingly worried about the privacy coins. The latest update brings the so-called compact linkable spontaneous anonymous group feature.

coinpaprika
Source coinpaprika.com

As per the Monero blog, the CLSAG update allowed smaller and tighter transactions and will also reduce the transaction size by about 25%. This will also improve the transaction times by 10% and will bolster privacy with Dandelion ++ which is a feature that aims to protect users’ IP addresses. The latest update release comes not too long after another speed and security-centric upgrade named Nitrogen Nebula was launched which was one of the many upgrades that went live in the past few months.

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Right before the release, Monero enjoyed an increase in price and moved up by about 35% in a month and 125% in a year while the US Department of Justice released a new report that explains the risks of end-to-end encryption along with the US Internal Revenue Service which declared war on privacy coins, offering a bounty of about $625,000 to crack Monero’s privacy code.

Monero approaches key resistance, xmr, privacy

Now, Monero scales up to 20 times while compared to the other upgrades, there will be no change to Monero’s mining algorithm was frequently modified to disadvantage the ASIC miners. The project’s upgrade from 2019 included RandomX which means that the network no longer needs changing to its mining algorithm for ASIC resistance. Though not directly related to the upgrade the development of the community project is progressing. The community developers have been working on the atomic swap which allows users to exchange Monero for other coins. The proposal for the project has reached full funding as of late.

DC Forecasts is a leader in many crypto news categories, striving for the highest journalistic standards and abiding by a strict set of editorial policies. If you are interested to offer your expertise or contribute to our news website, feel free to contact us at [email protected]

Source: https://www.dcforecasts.com/monero-news/upgraded-xmr-becomes-best-performer-among-top-15-coins-analysis/

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