Crypto this week

EU to review regulatory framework for crypto

A European parliamentary committee will vote on Monday (Mar 14) on a new regulatory framework for crypto assets, which could accelerate passage of a measure that industry executives say could practically ban key digital currencies including Bitcoin and Ethereum in Europe.

Crypto assets issued and/or traded in the EU "shall be subject to minimum environmental sustainability standards and set up and maintain a phased roll-out plan to ensure compliance" with those requirements, according to the final draft for the law, dubbed MiCa, that was seen by Bloomberg News.

The reference to minimum sustainability as well as roll-out requirements appear to be last-minute changes introduced to curb, or ban, the use of digital currencies working on a so-called "proof-of-work" consensus mechanism, for instance, Bitcoin and Ethereum.

Proof of work is one of the main consensus mechanism governing the Bitcoin blockchain. Bitcoin miners contribute computer power to the network, which secures and processes the blockchain, and are rewarded in Bitcoin for their contribution. BLOOMBERG

Bitcoin boom or crypto winter? Some technical levels to watch

Over the past 2 months, as global asset markets were whipsawed by an increasingly hawkish Federal Reserve and then Russia's invasion of Ukraine, Bitcoin remained stubbornly in a range. Only the briefest dip below US$33,000; never above US$46,000.

For technical analysts, the discussion is focused on identifying the numerical levels and trading patterns that might signify a sustained trend break - something that could nudge Bitcoin out of its range and usher in either a strong recovery or another bear market. Below are 5 analysts' views.

The bull case: Katie Stockton, the founder of Fairlead Strategies, uses trading patterns she calls the "daily cloud" and the "weekly cloud," trend-following indicators that help identify technical support and resistance levels. Bitcoin will encounter its next resistance in the US$50,000 to US$51,000 area, she said by email on Thursday. Her "secondary breakout" level: close to US$55,000.

Bitcoin's key tactical upside breakout zone remains between US$44,550 and US$46,000, according to Ron William, founder of RW Market Advisory. He cites so-called accumulation patterns, which have recently been supported by safe-haven flows triggered by the escalating geopolitical tensions. If Bitcoin manages a sustainable break above key resistance at US$45,000, that opens the door for US$54,000 next, said Christopher Grafton, managing director at Vectisma.

The bear case: Jonathan Cheesman, head of over-the-counter and institutional sales at crypto exchange FTX, points to the 50-day moving average as well as recent lows around the US$33,000 and US$34,500 as levels to watch - with US$29,000 being "the big downside level," he said in an email on Tuesday.

A far more bearish support would be at US$20,000, according to William of RW Advisory. He says it is both a psychologically important level and a target in a long-term regression analysis. Bitcoin has not traded that low since December 2020.

Andy Dodd, a technical analyst at Louis Capital Markets, sees Bitcoin moving lower from the neckline of what he calls a "head-and-shoulders top pattern" - which yields a target of US$16,100, he said by email on Thursday. That is 77 per cent below the level Bitcoin peaked at in November. BLOOMBERG