Bitcoin and other Cryptocurrencies

Ripple is one of the most popular cryptocurrencies in South Korea, a leading market for cryptocurrencies, where both young and old have been investing heavily in these currencies with the hope of making a quick profit. XRP has moved into the top five cryptocurrencies by market capitalization on CoinMarketCap amid their dramatic rise over the last year.

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1. South Korea Could Shutdown All Cryptocurrency Exchanges: Watchdog
Choi Jong-ku, chairman of South Korea's Financial Services Commission, told lawmakers on Thursday that the government is considering shutting down all cryptocurrency exchanges and not just those that violate law, the Yonhap news agency reported.

2. SEC Says Significant Investor Protection Issues Linked To Bitcoin ETFs
The Securities Exchange Commission has asked investment fund trade groups to address 'significant investor protection issues' linked to cryptocurrencies before exchange-traded-funds, that invest directly in bitcoin and its rivals or has significant exposure to them, can be launched.

3. Bitcoin Use Under Scanner In Indonesian Island, Bali
Indonesia's central bank, which issued a stern warning against the use of cryptocurrencies this month, have engaged a team to probe the trading in such currencies in the island of Bali, a popular tourist destination.

4. NYSE Parent, Blockstream Partner To Launch Crypto Data Feed
Intercontinental Exchange, Inc., the parent company of the New York Stock Exchange, has partnered with Blockstream, which deals in blockchain technologies and financial cryptography, to launch the Cryptocurrency Data Feed.

5. LightInTheBox Establishes Blockchain Technology Research Lab
LightInTheBox Holding, a US-listed Chinese online retail firm, opened a blockchain technology research lab to develop blockchain technology platforms and applications.

6. Visa CEO Says Not To Process Cryotocurrency Transactions
Bitcoin is not real money, and Visa will not process any transactions that are cryptocurrency-based, the credit card giant's CEO Alfred Kelly told CNBC.

7. Experts Say Bitcoin Bubble Is Bursting, Value To Fall Further
As Bitcoin suddenly reversed its path to downward from a peak, a leading team of economists predicted that the digital currency has all the hallmarks of a classic speculative bubble, and that it is bursting.

8. Belarus Legalizes Cryptocurrency In A Special Economic Zone
Belarus has made cryptocurrency operations legal in a special economic zone in the country, which has a special tax and legal regime.

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Bitcoin may "totally collapse" though it may linger for a century, Nobel Laureate Robert Shiller said, who equaled it to the Tulip mania.

"[Bitcoin] might totally collapse and be forgotten and I think that's a good likely outcome but it could linger on for a good long time, it could be here in 100 years," the Yale University professor told CNBC in an interview in Davos, Switzerland.

Shiller, who was the joint winner of the 2013 Nobel Prize for economics, pointed out that bitcoin has no value at all "unless there is some common consensus that it has value."

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Recent downside price rotation in Bitcoin has caused quite a bit of concern for Crypto traders and investors. This recent breakdown move represented a failure of continued strength and has, and still is, testing critical support for a bottom. There are many external factors that are driving the demand and price for Bitcoin currently. The most recent news is that Crypto ETFs may run into some regulatory issues and that fears of a continued government crackdown may crash prices. Demand is still strong from believers in Blockchain and Cryptos, though, and we believe this contraction in price may continue for a few months.

As Bitcoin continues to find its roots in economic function, the Blockchain technology continues to be validated and adopted by many. The CryptoCoins themselves may become more valuable as a trading instrument as well as a futures instrument. When the ETFs hit the markets, we believe BlockChain and Cryptos will become well entrenched in society and will establish a base valuation (of sorts).

In the meantime, be prepared for some wild volatility and rotation. The lower support levels, as shown on this chart, are key to the upside potential of Bitcoin. If that level is broken, then we could see a dramatic collapse in price to test the $4000 level. Until then, we are within an $8k~10k rotational range that will continue to tighten as the Pennant formation constricts. It should make for a wild ride – either way.

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Retail trader data shows 76.0% of traders are net-long with the ratio of traders long to short at 3.16 to 1. The number of traders net-long is 1.9% higher than yesterday and 5.3% higher from last week, while the number of traders net-short is 0.6% higher than yesterday and 21.9% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Bitcoin prices may continue to fall. Positioning is more net-long than yesterday but less net-long from last week. The combination of current sentiment and recent changes gives us a further mixed Bitcoin trading bias.

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Legendary investor George Soros joined a chorus of well-known investors calling bitcoin a bubble this week, making his remarks in a speech at the World Economic Forum in Davos, Switzerland Thursday.

"Cryptocurrency is a misnomer and is a typical bubble, which is always based on some kind of misunderstanding," the financier and founder of the $26 billion Soros Fund Management said.

"Bitcoin is not a currency because a currency is supposed to be a stable store of value and the currency that can fluctuate 25% in a day can’t be used for instance to pay wages because wages drop by 25% in a day. It’s a speculation. Based on a misunderstanding," he added.

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Bitcoin near the apex of a triangle, sitting on big support

On Friday, the cryptocurrency market was sent lower by exchange-related news in Japan, but managed to rebound. The drop and rebound helped further along the development of a symmetrical triangle in Bitcoin (BTC/USD). The coiling price action is indicative of a potentially explosive move on the horizon.

Triangles can break in either direction, which is why it is important to wait for the break, rather try and predict it, before becoming aggressively positioned. The development of the formation arrives at an interesting juncture. The trend-line from July has been broken on several occasions on an intra-day basis since the sharp reversal on Jan 17, but each time Bitcoin managed to close the day at or back above. Should we see a downside break unfold, it would not only constitute a breach of an important trend-line, but also occur in the direction of the trend off the December high, which could get Bitcoin really rolling downhill.

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Where December saw major gains for the global cryptocurrency market, January has seen a series of corrections that have brought it back closer to pre-December numbers—tempering some of the community's wild excitement and runaway speculation.

But the past few days have shown Ethereum making a comeback. According to CoinMarketCap, the price of ETH was $998.03 at 2:04am PST Friday, Jan. 26. By 12:15pm on Sunday, Jan. 28, that price is now $1,236.18. This marks a growth of just under 24 percent in just over two days—with a 15 percent bull run occurring overnight Saturday into Sunday.

"thereum is taking advantage of Bitcoin's volatility and downtrend," said Akanshu Argh Jain, Co-Founder of Hooklabs.io, a blockchain consulting and investment firm. "With events like Vitalik leaving Fenbushi Capital to focus on ETH, an updated roadmap with sharding, and some other exciting developments—Ether is above 0.1 BTC again."

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Ethereum broke out of wedge to top-side; but can it sustain?

On Friday, we noted wedges forming in Ethereum and Bitcoin, of which the former broke out of to the top-side and sustained a move higher. Since the plunge during the middle of the month Ethereum has been the strongest of the group, but is it ready to head higher or is a broader lower-high developing?

On the 4-hr, there is a series of higher-lows and higher-highs developing since last week, and as long as those remain in place, so will an upward bias. Keep an eye on the trend-line rising up from 1/17 along with the one from December.
If more broadly speaking, this is simply lower-high on the daily or a retest (if it rallies back to the high), we’ll use recent swing-lows and trend-lines to determine if the trend is turning to the downside. A turn lower would bring the November trend-line into play and the important spike-low at 770. Otherwise, support holds it remains the leader.

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