The Australian Securities and Investments Commission (ASIC) has admitted it holds concerns over the crypto investment increase seen during the Covid-19 pandemic, particularly among new, inexperienced investors.
According to ASIC’s new investment behaviour research, conducted among more than 1000 investors in November 2021, crypto was the second most common investment product last year.
Almost Half of Investors Own Crypto
ASIC chairman Joe Longo pointed to the increasing number of new investors buying cryptocurrency without fully understanding the associated risks.
Of those surveyed, 44 percent of investors stated they owned crypto, and of these, 25 percent claimed crypto was their only investment:
According to the survey, only 20 percent of cryptocurrency owners considered their investment approach to be ‘risk-taking’, raising concerns that investors did not understand the risks of this asset class.
Joe Longo, ASIC chairman
Perhaps even more concerningly, 41 percent of investors surveyed stated they had received their investing information from social media platforms – predominantly Reddit, TikTok, Facebook, and YouTube.
Longo finds these figures troubling and believes consumers are failing to weigh the risks and fully understand what they are participating in. Andrew Bragg, a NSW Liberal Senator and vocal proponent of the crypto industry, agrees with Longo and recommends “sweeping reforms to regulate crypto”.
ASIC Pleads for Smart Investing
April 2022 was a notable month for ASIC warnings regarding cryptocurrency and other financial matters. Firstly, the regulator released a guidance note for Aussie ‘finfluencers’. The document outlined which financial influencers could be in breach of the law, and recommended these people check they had the right qualifications to be providing financial advice. The move was met with contention by many ‘finfluencers’ at the time.
Only days later, ASIC’s former chairman Greg Medcraft called for urgent Australian crypto regulatory clarity. Medcraft, joined by venture capitalist Mark Carnegie, requested that Aussie regulators join the crypto start-up race. According to the Australian Financial Review, Medcraft hoped to develop a plan to encourage digital asset tech and investment.
Let’s take a closer look at today’s altcoins showing breakout signals. We’ll explain what the coin is, then dive into the trading charts and provide some analysis to help you decide.
1. Cardano (ADA)
Cardano ADA is a proof-of-stake blockchain platform whose stated goal is to allow “changemakers, innovators, and visionaries” to bring about positive global change. The open-source project also aims to “redistribute power from unaccountable structures to the margins to individuals”, helping to create a society that is more secure, transparent, and fair. Cardano is used by agricultural companies to track fresh produce from field to fork, while other products built on the platform allow educational credentials to be stored in a tamper-proof way, and retailers to clamp down on counterfeit goods.
ADA Price Analysis
At the time of writing, ADA is ranked the 6th cryptocurrency globally and the current price is US$0.5774. Let’s take a look at the chart below for price analysis:
From its Q2 high, ADA dropped nearly 70% before finding support near $0.3960. The price has been consolidating since it set this low and is currently testing support near $0.4929. This level has held as support despite the larger market’s sharp downturn since mid-June.
It’s reasonable to expect the price to briefly drop through this level to run bulls’ stops below the swing lows at $0.4506 and $0.4350 before any potential rally. If so, an old accumulation and inefficiently traded area on the weekly chart near $0.4072 could provide support.
If this region holds as support, bulls may find the first resistance near $0.6510. Here, the 40 EMA and an inefficiently traded area converge in the upper half of the local range.
A break of this resistance may retest resistance just above the June monthly open, near $0.7490. This level holds many bears’ stops, is near old broken support, and is inefficiently traded on the monthly and daily charts.
2. Polygon (MATIC)
Polygon MATIC is the first well-structured, easy-to-use platform for Ethereum scaling and infrastructure development. Its core component is Polygon SDK, a modular, flexible framework that supports building multiple types of applications. The MATIC token will continue to exist and will play an increasingly important role in securing the system and enabling governance.
MATIC Price Analysis
At the time of writing, MATIC is ranked the 14th cryptocurrency globally and the current price is US$1.02. Let’s take a look at the chart below for price analysis:
Since its Q2 highs, MATIC has been in a steady bearish trend, retracing nearly 78% and finding support near $0.4820, at the 65.8% retracement level.
Last week’s sharp impulse up might have marked the start of a new trend. If so, higher timeframes suggest that $0.9130, near the 45.8% retracement and the 9, 18 and 40 EMAs, may see interest from bulls. The price could reach lower, near $0.8520, and still find support.
Currently, the price is contesting a region between $0.8239 and $0.8025. Closes over this level could confirm it as new support, leading to a move higher.
However, bulls are contending with probable resistance near $1.15, while $1.25 is also likely to be sensitive with the nearest support and resistance this close together.
3. Kadena (KDA)
Kadena KDA is a proof-of-work blockchain that combines the PoW consensus mechanism from Bitcoin with directed acyclic graph (DAG) principles to offer a scalable version of Bitcoin. Kadena claims it can provide the security of Bitcoin while being able to offer unparalleled throughput that makes the blockchain usable to enterprises and entrepreneurs alike. Kadena’s unique infrastructure is decentralised and built for mass adoption because of its multi-chain approach.
KDA Price Analysis
At the time of writing, KDA is ranked the 104th cryptocurrency globally and the current price is US$2.14. Let’s take a look at the chart below for price analysis:
KDA climbed 60% from its mid-June low, creating a bullish market structure break on the daily chart.
Aggressive bulls might find the closest support near the August open, around $2.00. This level will likely show inefficient trading on the daily chart after Monday’s candle closes.
If this level breaks, the next support might be near $1.85. This level is near the 61.8% retracement. It’s also near the 9, 18 and 40 EMAs, and the high of accumulation on the weekly chart.
A dip lower could reach $1.78, where bulls rejected bears on the weekly. However, a move this low could go significantly lower. Bulls’ stops near $1.70 and a large area of inefficient trading on the weekly offer little support to stop a more significant drop.
The closest resistance is from $2.30 to $2.45, near the June monthly open. This area showed inefficient trading on the weekly chart. The price has passed through this zone multiple times, but it could provide some resistance again.
If the market’s rally does continue, $2.57 might offer the next resistance. This level shows inefficient trading on the daily chart. It’s also at the low end of inefficient trading on the weekly and monthly charts.
These coins have high liquidity on Binance Exchange, so that could help with trading on AUD/USDT/BTC pairs. And if you’re looking at buying and HODLing cryptos, then Swyftx Exchange is an easy-to-use popular choice in Australia.
Coinflex has filed for restructuring in a Seychelles court, according to a report from Bloomberg:
Coinflex is a derivatives exchange that has been struggling to recover a monumental loss – said to be at least US$84 million – after a counterparty failed to meet a margin call.
The exchange is looking for approval from depositors and the court to issue depositors with rvUSD tokens, equity, and a locked version of the exchange’s native token FLEX coin. Additionally, the firm plans to launch “Locked Balances Markets”, which will be traded against unlocked balances on the platform.
Coinflex on the Edge
In June, the exchange halted user withdrawals due to market conditions, only to resume services in July – the same month it laid off over 50 percent of its staff.
Problems had been brewing since late June when the CEO of Coinflex, Mark Lamb, said Roger Ver – the counterparty in question – owed the exchange US$47 million in USDC:
Something interesting to note: Lamb has outright named Roger Ver as the debtholder, whereas Roger Ver is referring to CoinFLEX as a "counterparty" as if he is afraid of a libel claim. A little indicator as to what's going on here.
Coinflex stated it would communicate with its customers as the process continues. Its founders will presumably host a video AMA next week to answer users’ inquiries and doubts.
Bad News Follows Bad
Of course, news of crypto exchanges halting services and preventing users from accessing their accounts no longer comes as a surprise in the ongoing bear market:
Crypto exchanges that halted withdrawals this year:
The old crypto adage “not your keys, not your coins” is relevant once again this week after popular crypto exchange Hotbit halted trading, deposits and withdrawals amid an ongoing criminal investigation concerning a former manager of the company.
In an August 10 blog post, the company announced that law enforcement had frozen “some funds of Hotbit” and thus it is unable to determine how long it will take to resume operations:
However, Hotbit didn’t disclose exactly which jurisdiction was investigating the exchange’s former employee:
A former Hotbit management employee who left Hotbit in April this year was involved in a project last year (which was against Hotbit’s internal principles and of which Hotbit was unknown) that law enforcement authorities now think is suspected of violating criminal laws.
Hotbit blog post
Compensation Plan in the Works
Hotbit stated that users’ unfilled open orders would be cancelled until the exchange resumes operations, and that leveraged ETF positions would be “forcibly liquidated to prevent further losses”.
On a side note, the exchange said it would come up with a compensation plan that will be published when “the website is resumed”.
The crypto bear market has not only drawn down cryptocurrency prices but caused a lot of institutional meltdowns in the industry. Hotbit is just the latest crypto firm to prevent users from accessing their funds.
Last month, Zipmex halted user withdrawals citing “circumstances beyond our control”, while another Singapore-based exchange, Hodlnaut, followed suit citing “market conditions”.
Blockchain payments company Ripple has expressed interest in acquiring the assets of insolvent crypto lender Celsius as a means to grow, according to a report from Reuters.
A spokesperson told Reuters that Ripple wanted to learn more about Celsius’ assets and was “actively looking for [merger and acquisition] opportunities to strategically scale the company”.
We are interested in learning about Celsius and its assets, and whether any could be relevant to our business.
Ripple spokesperson
Can Ripple’s Interest Help Check Celsius’ Collapse?
After pausing withdrawals from its platform in June due to liquidity issues, last month Celsius filed for bankruptcy in order to “stabilise its business”. Then, in an astounding twist, the lender laid claim to customers’ deposits in court, casting doubt on the likelihood of customers getting their money back.
Ripple’s comments to Reuters were in response to a query about the company submitting filings to the bankruptcy court seeking to be represented in Celsius’ proceedings, although Ripple is not one of Celsius’ major creditors.
Celsius’ bankruptcy filings show it holds digital assets in custody accounts, loans, a bitcoin mining business, and CEL tokens, bank cash and crypto.
It’s unclear how Ripple’s involvement might help users affected by the platform’s troubles. Following the news, the price of Celsius’ token CEL rose – it’s up over 30 percent in the past 24 hours.
Crypto markets have responded favourably to a slower-than-expected US inflation print in July, with the official rate steady at 8.5 percent and both Bitcoin (2 percent) and Ethereum (9 percent) up within minutes of the report’s release:
Finally some good news! US CPI data shows inflation peaked. Crypto & Market rallied today. $Sol up 5%, $Eth up 9%, #NASDAQ up 3%. Good news for money coming back into risk on assets. We still are in a FED induced recession. Hope builders are ready for better times ahead. 👀🚀 pic.twitter.com/1MORZXDQ5s
With the worst of consumer price increases now behind the US economy, there was widespread relief on the part of crypto traders that the Federal Reserve might relax its aggressive approach to tightening monetary conditions.
CPI Unchanged, Below Projections
The consumer price index (CPI) was unchanged from the previous month, due in part to lower energy prices, according to a Bureau of Labor Statistics report. Food and energy prices aside, core CPI remained unchanged at 5.9 percent over the past 12 months, just under a projected 6.1 percent.
“The Fed will be cheered by the news, especially the fact that core inflation was also lower than expected,” said Richard Carter, head of fixed interest research at UK-based investment management firm Quilter Cheviot.
They will still need to hike rates at their next meeting in September, but this reduces the risk of another 75 basis-point move and, going forward, we might just see markets act a little calmer than they have to date.
Richard Carter, head of fixed interest research, Quilter Cheviot
Next Rate Hike Likely to be 50 Points, Not 75
More than 60 percent of traders are now betting the Fed will hike interest rates by 50 basis points in September, compared with half that number just one day ago, according to the CME FedWatch Tool. Traders saw a 75 basis-point hike as the likelier scenario after last week’s Bureau of Labor report showed the economy was still able to sustain more rate hikes.
All of which is a far cry from two months ago when crypto markets shed US$100 billion in the wake of the highest US CPI print in 40 years.
New data from DefiLlama reveals that Optimism’s total value locked (TVL) has surged by almost 300 percent in the past month.
The Ethereum scaling solution surpassed US$1 billion in TVL ahead of the blockchain’s transition from a proof-of-work to a proof-of-stake network:
DefiLlama data for Optimism’s TVL.
ETH Merge Optimal for Optimism
Optimism (OP) rose by more than 89 percent in the past week alone, reaching a high of US$2.22 on August 4 and noticeably outperforming most of the market.
The latest price action is likely based on developments surrounding the upcoming Ethereum layer-2 scaling protocol. The protocol will utilise rollups to speed up Ethereum’s transactions, thereby reducing its costs. This week’s value spike has followed an OP Labs announcement that flagged plans for a Bedrock upgrade set to arrive as early as Q4 2022:
Optimism Bedrock is coming soon™️, and when it does it will change the rollup game forever.
It will lay the protocol's foundation for years to come and serve as THE model for rollup architecture.
Experts believe the Merge upgrade could potentially scale the network to 100,000 transactions per second, with layer-2 solutions further enhancing such capacity. This would represent a massive upgrade from its current 30 transactions per second.
Other developments users can expect to see soon include a 20 percent cut in the cost of data submission to layer 1, support for several alternative proof systems, and an optimised code that will allow nodes to synch 50 times faster.
Two Sides to the Optimism Coin
Optimism has been busy this year on fronts good and bad. In April the company announced its new governance structure and began preparing for the release of its new token, $OP, to help power the changes. The new structure would see governance divided between two houses – the Citizens house and the Token house, to be established via the airdropping of new tokens to users.
However, June brought damages to Optimism in the form of an exploit. The roll-up solution lost US$15 million worth of its new OP tokens after Wintermute, its launch partner, transferred the tokens to the wrong wallet address. Luckily, a white hat attacker returned 17 million tokens (worth approximately US$11 million).
Let’s take a closer look at today’s altcoins showing breakout signals. We’ll explain what the coin is, then dive into the trading charts and provide some analysis to help you decide.
1. Ankr (ANKR)
ANKR originated as a solution that utilises shared resources in order to provide easy and affordable blockchain node hosting solutions, and has since built a marketplace for container-based cloud services through the usage of shared resources. It is a platform that enables the sharing economy, where any customer can access resources at a more affordable rate while also providing enterprises with the ability to monetise their spare computing power. It is unique in the way that it is the first to use trusted hardware, and this ensures a high level of security.
ANKR Price Analysis
At the time of writing, ANKR is ranked the 90th cryptocurrency globally and the current price is US$0.04992. Let’s take a look at the chart below for price analysis:
ANKR continues to set monthly lows in its downward trend. Support might be found in the daily gap above the monthly open near $0.04295, though a deeper retracement is likely to target the relatively equal lows into support near $0.03925.
The daily gap near $0.03766 could also provide support. However, another gap inside the down candles, around $0.03421, provides the highest chances of solid support while offering a high risk-reward entry.
There is currently no resistance overhead since the price is in discovery. Extensions hint at the areas around $0.05932 and $0.06570 as reasonable take-profit zones.
2. The Graph (GRT)
The Graph GRT is an indexing protocol for querying data for networks like Ethereum and IPFS, powering many applications in both DeFi and the broader Web3 ecosystem. Anyone can build and publish open APIs, called subgraphs, that applications can query using GraphQL to retrieve blockchain data. GRT is a work token that is locked up by Indexers, Curators and Delegators in order to provide indexing and curating services to the network.
GRT Price Analysis
At the time of writing, GRT is ranked the 55th cryptocurrency globally and the current price is US$0.1415. Let’s take a look at the chart below for price analysis:
GRT‘s 80% retracement during Q2 set a low near $0.09547 during its consolidation that began in early June.
Relatively equal highs near $0.1635 could be the current target if the price breaks through resistance beginning near $0.1858. Bullish continuation may reach through the next significant swing high near $0.2038 into the daily gap near $0.2473. If bullish strength continues, the zones just below the previous monthly highs near $0.2643 and $0.2712 could halt any retracement.
A bearish shift in the market may seek the relatively equal lows near $0.1236 into possible support near $0.1187. If this down move occurs, the swing low near $0.09742 and possible support near $0.09124 may be the primary objective.
3. Neo (NEO)
NEO bills itself as a “rapidly growing and developing” ecosystem with the goal of becoming the foundation for the next generation of the internet – a new economy where digitised payments, identities and assets come together. As well as drawing a worldwide community of developers who create new infrastructure for the network and lower barriers to entry, the team behind this project operates an EcoBoost initiative that’s designed to encourage people to build decentralised apps and smart contracts on its blockchain.
NEO Price Analysis
At the time of writing, NEO is ranked the 63rd cryptocurrency globally and the current price is US$11.93. Let’s take a look at the chart below for price analysis:
After creating a second equal low during Q2, NEO has gained nearly 25% into resistance that starts near $14.24.
Aggressive bulls looking for a continuation to the nearest cluster of relatively equal highs around $15.33 might look for bids near $12.86. More significant resistance rests above, near $16.00. A group of significant swing highs at $16.76 and $17.49 give possible targets if this resistance breaks.
A stop run on the recent low at $10.09 into possible support beginning near $9.63 may see stronger bidding. This area also has a confluence with the previous monthly low.
A bearish market shift could reach the swing low at $8.30 into possible support beginning near $7.84.
These coins have high liquidity on Binance Exchange, so that could help with trading on AUD/USDT/BTC pairs. And if you’re looking at buying and HODLing cryptos, then Swyftx Exchange is an easy-to-use popular choice in Australia.
The CEO of bankrupt cryptocurrency lender Celsius has allegedly sold large amounts of the project’s native CEL token during the recent surge. The token’s value shot up almost twofold in the past week in what appears to be a community-driven short squeeze.
First Transaction in Late May
Blockchain data shows a cryptocurrency address identified by intelligence firms Arkham Intelligence and Nansen, as CEO Alex Mashinsky made an initial transaction in late May. According to data from Etherscan, the wallet sold CEL tokens in multiple transactions on August 6 and 9, swapping 17,575 CEL tokens for US$28,242 worth of Ether on the decentralised exchange UniSwap.
The transactions were initially spotted by Twitter user ‘alto’:
Mashinsky back from summer vacation to important community work – dumping CEL pic.twitter.com/mqjODKawSi
Arkham Intelligence managed to identify a few of Mashinsky’s wallets that have regularly sold a large amount of the CEL token on numerous decentralised exchanges. Before it declared bankruptcy, the firm listed its largest owners on its webpage, with the CEO reportedly the largest token holder just after the Celsius treasury.
CEL Token Under SEC Scrutiny
Celsius filed for bankruptcy protection on July 13, only a month after freezing all customer withdrawals. The CEL token issued by the firm as a utility token is also facing regulatory scrutiny from the US Securities and Exchange Commission (SEC) for not being registered as a security.
At its peak in October 2021, the crypto lender had US$25 billion in assets under management, according to Mashinsky, but now Celsius is down to US$167 million “in cash on hand” which it says will provide it with ample liquidity to support operations during its restructuring process.
This is little consolation to investors, as under the terms of its bankruptcy filing Celsius owes its users somewhere around US$4.7 billion. Amid its turmoil, Celsius has also had to withdraw its motion to bring back ex-chief financial officer Rod Bolger on a US$92,000 per month salary. Bolger was set to return to the firm as a consultant to help during the bankruptcy proceedings.
Last year, the Reserve Bank of Australia (RBA) pronounced that it “saw no strong case” for a retail central bank digital currency (CBDC). In a curious about-turn, the RBA has now announced it is “exploring use cases”.
A few alarms bells have been raised, to say the least:
So RBA is trialing a Central Bank Digital Currency, as APRA works the with Banks to ensure they can handle negative interest rates. These new "tools" will offer greater control over our spending patterns and should concern us all. Are we sleeping walking into central control?
A CBDC is best understood as a digital form of fiat currency issued and regulated by a central bank (rather than retail banks, as is the case today). They can be classified as either retail or wholesale.
Retail CBDCs are issued directly to people and companies. By contrast, wholesale CBDCs are issued to financial institutions such as banks. The former are said to be useful as a mechanism to deliver “helicopter money” or universal basic income, whereas the latter are suitable for interbank transfers.
Risks and Benefits
Over 100 governments are at some stage of experimenting or implementing CBDCs, and cite their numerous benefits to include:
technological efficiency – money transfers and payments can be made in real time, directly from the payer to the payee;
reduced risk for merchants as settlement is instant;
financial inclusion – in that any legal resident or citizen can be provided with a free or low-cost basic bank account;
preventing illicit activity by tracking each unit of CBDC since all transactions are traceable;
improved tax collection – taxes can simply be deducted at source;
combating crime – the blockchain is transparent, making it easy to track criminal activities; and
improved safety – as carrying physical cash constitutes a risk.
However, enormous privacy and surveillance concerns have been raised from the outset, with critics describing CBDCs as “programmable money” capable of being switched on and off at the whim of centralised authorities. It is considered to be the seed of a social credit score, as once you are able to control the money, you become capable of controlling the citizenry through behavioural economics, as is the case in China:
According to the announcement, the research project is a collaboration between the RBA and the Digital Finance Cooperative Research Centre (DFCRC) to focus on the uses for, and potential economic benefits of, a CBDC:
The project, which is expected to take about a year to complete, will involve the development of a limited-scale CBDC pilot that will operate in a ring-fenced environment for a period of time and is intended to involve a pilot CBDC that is a real claim on the Reserve Bank.
RBA announcement
The announcement adds: “Interested industry participants will be invited to develop specific use cases that demonstrate how a CBDC could be used to provide innovative and value-added payment and settlement services to households and businesses.”
RBA deputy governor Michelle Bullock described the project as “an important step” on the path to a potential Australian CBDC, saying on ABC Radio’s The World Today program it was effectively “an experiment”.
CBDC is no longer a question of technological feasibility. The key research questions now are what economic benefits a CBDC could enable, and how it could be designed to maximise those benefits.
Andreas Furche, chief executive, DFCRC
The RBA indicated that part of the motivation for the experiment was that it didn’t want to be left behind. A report is expected in around a year’s time and according to Bullock, an Australian CBDC is not necessarily a certainty.
RBA ‘Jawboning’ on Stablecoins v CBDCs
This all comes as just three weeks ago, RBA chief Philip Lowe indicated that private stablecoins were “probably better than CBDCs“. Then again, the RBA also forecast inflation to be 1.5 percent this year, which has since risen to 6.1 percent, a 21-year high. Macro policy commentators would describe this as “jawboning”, and would suggest watching what the RBA does, and not what it says.
