Bitcoin prices are on the rise, as appears to be a riskier assets that benefits when stock prices are struggling. Prices have rallied more than 300% already in 2019, and could continue to see upward price pressure if it takes at the 2019 highs. Some believe that prices could face tailwinds in the wake of the news that Deutsche Bank is exiting the global equity business.
Bitcoin Prices are Testing Resistance Levels
Bitcoin is forming a classic cup and handle technical pattern that could lead one to believe that the digital currency could break out. This is generally considered a consolidation pattern that pauses and then refreshes. For nearly 2-weeks bitcoin prices have moved sideways as traders collected their thoughts and some took profits. A test of the June highs is likely in the cards which could generate more interest in crypto currencies. Short term momentum has turned positive as the fast stochastic generated a crossover buy signal. The fast stochastic is a short-term momentum oscillator that measures accelerating and decelerating positive and negative momentum.
Market Focuses on Libra Regulation
With Libra, Facebook’s crypto currency poised to launch, market watchdogs and regulators are eyeing the social media giant, as there appears to be no plan for regulation. The ECB (European Central Bank) is concerned and wants regulators to kick into a higher gear when it comes to developing rules for big tech firms moving into finance. The Libra cryptocurrency project will provide a new digital currency that can be used to purchase items throughout the social media giants platform.
The Libra project has drawn the ire of both congress and market watchdogs who are worried that a unregulated financial product will be available to Facebook users worldwide. This could pose a threat to sovereign currencies such as the dollar and the Euro. If this becomes the case, the US government will not have any way to alter currencies and interest rates based on monetary policy. There is even greater concern that Facebooks Libra could possibly be used in money laundering if not governed correctly. Some lawmakers are even seeking a freeze on development of the cryptocurrency, and different government agencies will hold hearings this month to discuss the project.
Bloomberg has also run a story that regulators in France, Japan, Singapore have expressed some concern over Libra and appear to believe there is need for research on this project before it can be released to the public. The story references French finance minister Bruno Le Maire who has previously said that “it is out of question’’ that Libra be allowed “become a sovereign currency.
Bitcoin trading can benefit from other digital currencies become more prevalent and could continue to face upward price pressure as the concept continues to become more of an issue. Bitcoin is regulated in the United States by both the Federal Reserve and the Securities Exchange Commission. With a Bitcoin futures contract already in circulation and an ETF on the way, digital currencies could continue to experience upside price pressures.