Weekly Market Analysis of Cryptocurrencies
We report the traditional weekly crypto market analysis based on the contribution by Aayush Jindal (Cryptonews.com). The analysis was made on July 3.
Bitcoin price reacted to the downside below $9,200 and $9,050. BTC even spiked below 9,000 and tested 8,940. It is correcting higher and trading above 9,100.
On the upside: an initial resistance is near 9,220. The main resistance is still near 9,300, above which the price could start a strong increase.
On the downside: looking at the current price action, it seems like the price might struggle to clear 9,300. Therefore, there is a risk of a fresh decline below 9,000 in the near term.
Ethereum price followed bitcoin and declined below $230 and $228. The ETH/USD tested 224 and it is attempting to climb back above the 230 resistance level.
On the upside: a successful break above the 230 resistance may perhaps increase the chances of a push towards 235 and then 240.
On the downside: if the bulls fail, the price could resume its decline towards 222 and 220.
Bitcoin cash price is sliding and it is trading near the $220 support.
On the upside: 230 is a strong resistance for a sustained upward move.
On the downside: if BCH settles below 220, there is a risk of a sharp decline towards the 205 and 200 support levels.
Litecoin retreated from the $42.5 resistance and tested $40.5. The bulls seem to be fighting hard to protect the 40.0 support zone.
On the upside: the price could rise steadily above 42.2 and 42.5 resistance levels.
On the downside: if bulls fail, the price might dive towards 38.5 or even 36.2.
XRP price is still consolidating above the $0.172 support level.
On the upside: the price must surpass 0.178 and 0.180 to start a strong upward move.
On the downside: the bears are likely to aim a larger decline below 0.172 and 0.168 in the coming sessions.
In the past three sessions, many small altcoins declined over -8.0%, including QNT, TMTG, BTG, COMP, SC, NEXO, NMR, CHSB, FXC, SNT, BTT, and ETN. Conversely, KNC surged more than +15.0% and ICX is up close to +10.0%.
BOJ to Start Digital Yen Feasibility Project
Tim Alper (Cryptonews.com) writes that the central Bank of Japan (BoJ) will conduct a controlled pilot for a central bank digital currency (CBDC) to see how a digital yen would function from a technical standpoint.
“The BoJ said it will begin a Proof-of-Concept (PoC) and wants to test the digital fiat in a controlled environment before deciding whether or not to proceed.
The bank made its intentions clear in a feasibility report, where it stated that it intends to work in conjunction with the central banks of other leading economies, many of whom are also piloting CBDCs.
Japanese media outlet Coin Post wrote, “Although the BoJ has not changed its position that it currently has no plans to issue a CBDC at this point, it is expected to work with private financial institutions and payments companies to solve technical issues in order to keep up with digital payment solutions that are being developed overseas.”
Technology and finance industry insiders in nearby South Korea have told Cryptonews.com that the central Bank of Korea’s own accelerated CBDC operations are a direct response to China’s lightning-fast progress with its own digital yuan – reportedly, already in advanced pilot operation in some five cities across the country.
Like Seoul, Tokyo is unused to falling behind Beijing in the IT innovation stakes. However, China’s bullish blockchain and CBDC progress appears to have forced South Korea – and now Japan – into action.
Despite the claims that Japan’s cryptocurrency adoption rate is arguably second-to-none, the country is still notoriously cash-dependent, and many of its older citizens still conduct the majority of their transactions in cash.
Earlier this year, the BoJ stated that it was working on the fifth stage of a joint initiative named Project Stella along with the European Central Bank. The central banks said that they are discussing matters pertaining to CBDCs “and other types of digital assets, which could be used on platforms based on distributed ledger technologies.”
Bitcoin Miners Suffer 23% Revenue Drop in June
Zack Voell (Coindesk.com) reports that Bitcoin miners suffered a sharp -23.0% drop in revenue last June, resulting from lower network fees and a reduced block subsidy after the halving in May.
“Down from $366 million in May, bitcoin miners generated an estimated $281 million in revenue in June, a three-month low according to Coin Metrics data analyzed by CoinDesk. Estimates assume miners sell bitcoins immediately.
Mining is the process of adding confirmed transactions to the Bitcoin blockchain. For the resources required to mine, the network compensates miners via subsidies and transaction fees. Subsidies are paid per block at a current rate of 6.25 BTC. Fees are paid per transaction.
Compared to May, June subsidies and fees offer a better representation of mining revenue after the halving, said Austin Storms, founder of BearBox. Even with an 11.0% decline in May, the month’s first 11 days of the month are weighted heavily from the 12.5 BTC per-block subsidy that later dropped to 6.25 BTC, Storms told CoinDesk.
During the halving, the size of Bitcoin’s mempool grew substantially, which caused transaction fees to also increase. The mempool serves as a sort of holding depot for verified transactions that need to be included in new blocks by miners. As the mempool emptied through the end of May and into June, monthly miner revenue estimates reflect the subsequent decline in transaction fees.
Fees only generated $12 million in June, which accounts for 4.3% of monthly revenue, down from a 12-month high of 8.3% in May. Since the per-block subsidy remains constant until 2024, growth in mining revenue can only come from two sources: an increase in network fees or bitcoin’s price.”