- Bitcoin continues to power away at above USD 7,000
- Delphi Digital examines how Bitcoin’s 50-day MA is now propping up a possible bull run
- Starbucks and McDonald’s rumored to be among first to use China’s upcoming digital yuan
Bitcoin markets have held steady at just above USD 7,000, but the real fight, according to most analysts, will be to see if it can hold above that level for the full 24 hours, and if the weekend can touch more heights. At the moment, this looks possible, but just as likely as a fall to lower levels as well! So far, daily high is at USD 7,184 (CoinDesk).
Medium term speculators will be happy to see that Bitcoin is not changing its 50-day moving average (MA) to becoming a key support level, with USD 7,200 looking more and more like a breakout line, just as we said in our daily BitcoinNews.com Bitcoin technical analysis.
And an analytical firm, Delphi Digital, also agrees. In its latest published market report yesterday, it says the signs are becoming bullish, even in the face of a US dollar that is stubbornly holding out in the face of virtually unlimited money printing by the US Federal Reserve.
But more importantly for Bitcoin, once it had recovered to USD 7,000, it is now hovering above previous 50-MA resistance, flipping it into potential support that could propel a bullish trend. The report, summed up by Cointelegraph, said:
“After a few weeks of consolidation, bitcoin appears to be eyeing a potential breakout around $7,200 and seems to be finding some support in its 50-day MA after breaching it at the end of last week.”
Nevertheless, it put out a warning to watch out for a mix of negative signals in traditional markets, fresh from historic lows for crude oil and incredible amounts of stimulus packages being pumped into the ailing US economy. It explained:
“Oil’s price collapse only adds to mounting deflationary pressures as weak demand and evaporating cash flows go head-to-head with unprecedented relief efforts… The dollar refuses to break despite the Fed’s best efforts to pump the system with liquidity.”
Volatility is the name of the game, and Delphi says that the Bitcoin vs VIX volatility chart was worth following
On the topic of volatility, Delphi noted that the Bitcoin versus CBOE’s VIX volatility chart was a relationship worth watching, as the VIX index has been in a gradual decline, and that this trend tends to support Bitcoin price: “Any disruption to the recent *relative* calm, however, could serve as a short-term headwind for Bitcoin if history serves as any guide.”
Meanwhile, after the Chinese central bank confirmed rumors of the testing of digital yuan on mobile apps, now there are even more hot whispers from the industry regarding real-world use cases coming up.
Local media Interchain Pulse said that a conference was held yesterday in Xiong’an to promote the digital yuan, with all those participating in the pilot invited. This meant that crypto developers, merchants and government agencies, as part of the Xiong’an Smart City program that started last year in September that saw the big corporates like Alibaba, Baidu and Huawei join hands with research bodies, universities and other tech firms.
Yesterday, the National Development and Reform Committee apparently named Ant Financial and Tencent among others, as leads for the use of digital yuan. They operate Alipay and WeChat Pay, who, are the most widely used digital payment platforms in China. So it is expected that they would bring hundreds of millions of existing users.
But more interestingly, among those present were retailers, especially two eye-catching food and beverage players Starbucks and McDonald’s, who are certainly big stakeholders and if they can be on board proper testing, this could signal wide adoption for the central bank digital currency.
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