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Crypto News Bytes

What caught our attention this week!

The Digital Dollar Project (Got Ripple?)

The nonprofit organization advocating for a U.S. central bank digital currency plans to work with crypto platforms like Digital Asset and Ripple to explore technical and policy aspects of a digital dollar. (coindesk)

US States most interested in Bitcoin and Ethereum

The Golden State of California may be America’s most inquisitive state about Bitcoin (BTC) and Ether (ETH), and it amounts to 43% of all Bitcoin and Ethereum web traffic searches on the crypto tracking website.(cointelegraph)

Salvadoran Bitcoin Bonds Delayed

The launch of the iconic bitcoin bonds of El Salvador, which will serve to fund the construction of the Bitcoin City announced last year, will be further delayed, according to reports coming from Paolo Ardoino, CTO at Bitfinex. In a recent interview offered to Fortune, Ardoino stated that the law framework that would support this issuance was still not ready. (Bitfinex)

Iran Greenlights Bitcoin Payments

Iran passed an act which enables the use of Bitcoin and cryptocurrency payments for imports through a comprehensive legal framework, per a report from local news outlet Tasnim.

According to the report, Iranian Minister of Industry, Mine and Trade Reza Fatemi Amin revealed that the recently passed law defines regulations on cryptocurrencies, addresses supply concerns for fuel and electricity costs for mining and provides authorization for the administration to use cryptocurrencies.

US Inches Towards Bitcoin & Ethereum Accounting Clarity

In a bid to develop transparent accounting rules for digital assets, the US Financial Accounting Standards Board (FASB) has revealed what assets the industry body will include in its crypto rule-making project, leaving NFTs and certain stablecoins outside its scope.

After years of being asked by businesses and investors to take a position on how to account for crypto holdings, the organization added the crypto project to its rule-making priority agenda last May. And on Wednesday, the FASB disclosed what assets are to be covered by a forthcoming rule, The Wall Street Journal reported.

Supporting Data

The first thing I noticed this week in my review of the Glassnode report was the fact that active entities were back-testing channel support. In fact, I found it a bit alarming, maybe because I had not noticed that before. In other words, that same channel also supported every breakout since July 2018, so when it is on the verge of breaking below that same channel, it is obviously significant.

While the Coin-Years Destroyed metric looks also like it wants to role over, reaching a relatively significant low. According to Glassnode, this metric aggregates the total lifespan destroyed (in years) over the last 365-days, and similar to dormancy, low levels are usually constructive and typical of late stage bear markets.

Summing up the week!

I think it’s fair to say the evidence now supports a continuation of the Bear Market just by the number of failed rallies that have occurred in digital assets and I don’t think cryptocurrencies will bottom until equites and bonds do as well. You’d think Biden or Powell would try and save something related to crypto, or maybe they simply do not understand how significant of an asset class it has become. Frankly, I’m disappointed America has not taken the lead with crypto.

Anyway, the two data points I covered above in this week’s article alone drive home the fundamental weakness in this market. As we test the lower end of the long-standing Bear Market Channel, it is likely a matter of time before we put in lower lows. Yet, according to Glassnode there is no widespread loss of HODLer conviction. Yet, I will continue to watch the HODLers net losses closely because they just dipped into the red zone.

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Scott Henderson’s Risk Disclosure & Disclaimers

Follow me on Twitter @swingtradenotes for charts, quick thoughts and smart remarks.