ban

Bitcoin pro traders warm up the $24K level, suggesting that the current BTC rally has legs

The Fed’s interest hike matched the market consensus and weak employment data boosted investors’ appetite for risk assets, but BTC traders should still exercise caution.

On Feb. 1 and Feb 2. Bitcoin’s (BTC) price surpassed even the most bullish price projections after the U.S. Federal Reserve announced plans to raise interest rates by 25 basis points.

Even though Fed chair Jerome Powell told investors not to wait for interest rate cuts in 2023, during his press conference he did clearly state that the employment data is currently the main focus.

The results of the ADP payroll survey revealed on Feb. 1 that U.S. private-sector hiring was significantly slower in January. ADP’s measure of private sector payrolls was 106,000, well below the 160,000 market consensus. This data fueled investors’ expectations of future interest rate hikes by the Fed going forward.

After testing the $22,500 support on Feb. 1, Bitcoin gained 6.5% in five hours and has since been flirting with the $24,000 level. While the recent gains are exciting, traders should note that the improvement in crypto market sentiment tracked the risk-on attitude seen in traditional markets.

Stocks with negative operating margin presented significant gains on Feb. 2, including Coinbase (COIN) 20%, Cloudflare (NET) 15%, Unity Software (U) 12% and DoorDash (DASH) 10%. That factor alone should be a warning sign that the gains of the last few weeks might not be sustainable. It’s also important to remember that Bitcoin’s 40-day correlation to the S&P 500 remains above 75%.

Potential regulatory headwinds could also have played a vital role in supporting Bitcoin’s upside. Huang Yiping, a former member of the Monetary Policy Committee at the People’s Bank of China, recently argued that a permanent ban on crypto could result in many missed opportunities.

Huang, now an economics professor at Peking University’s National School of Development, criticized Bitcoin for lacking intrinsic value, but noted that crypto-related technologies are “very valuable” to regulated financial systems.

Let’s look at derivatives metrics to understand whether professional traders added leverage positions after Bitcoin’s recent price breakout.

Bitcoin margin traders warm up to the $22,500 support

Margin markets provide insight into how professional traders are positioned because it allows investors to borrow cryptocurrency to leverage their positions.

For example, one can increase exposure by borrowing stablecoins to buy Bitcoin. On the other hand, Bitcoin borrowers can only short the cryptocurrency as they bet on its price declining. Unlike futures contracts, the balance between margin longs and shorts isn’t always matched.

*OKX stablecoin/BTC margin lending ratio. Source: OKX*

The above chart shows that OKX traders’ margin lending ratio drastically increased on Jan. 30, signaling that professional traders added leverage long after Bitcoin successfully bounced after testing the $22,500 support.

More importantly, Jan. 29 marked the indicator’s lowest level in more than eleven weeks at 13 favoring stablecoin borrowing by a wide margin — indicating that shorts are not confident about building bearish leveraged positions. At 24 at the time of writing, it is clearly evident that bulls are becoming more comfortable with the current $22,500 support.

Options traders flirt with an optimistic bias

Traders should also analyze options markets to understand whether the recent rally has caused investors to become more risk-averse. The 25% delta skew is a telling sign whenever arbitrage desks and market makers are overcharging for upside or downside protection.

The indicator compares similar call (buy) and put (sell) options and will turn positive when fear is prevalent because the protective put options premium is higher than risk call options.

In short, the skew metric will move above 10% if traders fear a Bitcoin price crash. On the other hand, generalized excitement reflects a negative 10% skew.

*Bitcoin 60-day options 25% delta skew: Source: Laevitas*

The 25% delta skew has been relatively calm near negative 5, indicating similar odds for downside and upside from options traders. On the bright side, not even the $22,500 retest on Jan. 31 was enough to break the bulls’ spirit. Combined with the lack of demand from margin traders willing to short Bitcoin, the derivatives markets paint a bullish picture.

Even if it takes a little longer (perhaps a couple of days) to break above $24,000, there are no signs of stress coming from the Bitcoin margin and options markets. However, traditional markets continue to play a vital role in setting the trend, so Bitcoin investors should not become overconfident.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Nepal regulator orders ISPs to block crypto websites or face the law

Nepalese internet and email providers have been put on notice by the country’s telco regulator to block crypto-related websites or face legal action.

Nepal’s telecommunications regulator has ordered the country’s internet service providers (ISPs) to block all cryptocurrency trading websites, threatening legal action against those that fail to comply.

In a Jan. 8 notice, the Nepal Telecommunication Authority (NTA) ordered ISPs and email service providers to prevent access to “websites, apps or online networks” related to crypto.

It stated that virtual currency transactions “are increasing in recent days [translated]” and reiterated that crypto transactions in the country are illegal.

Nepal Rastra Bank (NRB), the country’s central bank, declared crypto trading and mining illegal in a September 2021 notice. “Encouraging” others to use crypto is also an activity punishable by law.

In April, the NTA issued a similar caution notice regarding crypto websites, asking the public to notify the regulator if they have information “related to the name of such website, app or online network.”

In the April notice, it also threatened legal action if “anyone is found to have done or been doing” crypto-related activities, but did not call for a block on access to crypto services at the time.

However, despite crypto being outlawed in the country, a Septembe report by blockchain data firm Chainalysis revealed emerging markets, inclusive of Nepal, are at the forefront of global crypto adoption.

Nepal’s crypto adoption placed it in the global top 20, ranked 16th overall, above the United Kingdom.

Nepal is included on a list of just nine countries that have outright banned cryptocurrencies, according to a November 2021 report from the Law Library of Congress.

Other countries that have banned crypto include China, Algeria, Bangladesh, Egypt, Iraq, Morocco, Qatar and Tunisia.

US Senate banking chair floats possibility of banning crypto

Despite suggesting a possible ban, U.S. Senator Sherrod Brown stated it would be “very difficult” to do so because activity “would go offshore.”

United States Banking Committee chairman Sherrod Brown has suggested that the Securities Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) should perhaps consider a ban on cryptocurrencies.

Brown’s comments were made during a Dec. 18 appearance on NBC’s “Meet the Press,” although the senator quickly added that a ban would be difficult to enforce:

“We want them to do what they need to do at the same time, maybe banning it, although banning it is very difficult because it would go offshore, and who knows how that would work.”

In response to a host’s earlier question about Senator Jon Tester, who believes cryptocurrencies should be banned, Brown said thathe shares the “same thought.”

The Ohio representative saidthat over the last 18 months he has been “educating” his colleagues and the public on the dangers of cryptocurrencies, calling for imminent and aggressive action to be taken.

“I’ve already gone to the Treasury and the Secretary and asked for a government-wide assessment through all the various regulatory agencies [….] The SEC has been particularly aggressive, and we need to move forward that way and legislatively if it comes to that,” he added.

Brown cited FTX’s shock collapse as an example of why a ban may be worth considering but added it “is only one huge part of this problem.”

He argued cryptocurrencies are “dangerous” and a “threat to national security,” citing North Korean cybercriminal activity, drug trafficking, human trafficking and the financing of terrorism as some of the problems they’ve exacerbated.

The Banking Committee chairman has expressed his skepticism toward crypto for over a year now, having most recently voiced concerns on the matters of stablecoin issuance as well as cryptocurrency advertising and marketing campaigns.

Brown released a Nov. 30 statement calling for an “all-of-government” approach to regulate the industry and on Dec. 13 applauded the U.S. Department of Justice for filing criminal charges against former FTX CEO Sam Bankman-Fried, who’s currently behind bars in the Bahamas awaiting extradition to the U.S.

I applaud the @TheJusticeDept and the Bahamian authorities for holding Sam Bankman-Fried accountable.

The @SenateBanking and Housing Committee will continue working to uncover crypto’s risks to consumers, our financial system, and our national security. https://t.co/dsSJ09PzYx

— Sherrod Brown (@SenSherrodBrown) December 13, 2022

Not all of Senator Brown’s peers seem to share his thoughts.

Senator Tom Emmer stated on Nov. 23 that FTX’s fall wasn’t a “crypto failure” but rather a failure caused by centralized actors.

Emmer also holds the view that crippling regulation would stifle industry innovation in the U.S., causing it to lose its position of global market dominance — something that many believe to be already unfolding.

It should also be noted that the incoming chairman of the House Committee on Financial Service, Patrick McHenry, is pro-crypto. This week he called for a delay on crypto tax changes in order to seek more clarification on the original, “poorly drafted” tax provision.

ECB official proposes ban on tokens with an ‘excessive ecological footprint’

EU officials previously rejected an outright ban on crypto mining, but the Markets in Crypto Assets bill could require firms to report any potential environmental impact.

Fabio Panetta, an executive board member of the European Central Bank (ECB), proposed banning crypto assets with a significant environmental impact as part of efforts to address risks.

In written remarks for the Insight Summit at the London Business School on Dec. 7, Panetta said harmonizing taxation around crypto between global jurisdictions could address some of the energy and environment costs around mining and validation. He added that tokens “deemed to have an excessive ecological footprint should also be banned,” referring to proof-of-work assets in a citation.

Panetta added crypto markets were often at risk due to their “incredibly high leverage and interconnections,” citing the collapse of the FTX exchange:

“The inadequate governance of crypto firms has magnified these structural flaws. Insufficient transparency and disclosure, the lack of investor protection, and weak accounting systems and risk management were blatantly exposed by the implosion of FTX. Following this event, crypto-assets may move away from centralised to decentralised exchanges, creating new risks owing to the absence of a central governance body.”

Crypto-assets have become the bubble of a generation, says Executive Board member Fabio Panetta at the @LBS‘s Insight Summit 2022.
Crypto-assets are not money. Many are just a new way of gambling https://t.co/S3YOJcq9QM

1/4 pic.twitter.com/2VmYAtWGja

— European Central Bank (@ecb) December 7, 2022

The ECB official’s calls for additional regulatory oversight in a ‘Wild West’ crypto market followed the European Parliament Committee on Economic and Monetary Affairs approving the Markets in Crypto Assets bill, or MiCA, in October after extensive discussions. The crypto framework awaits final approval following legal and linguistic checks by EU lawmakers, with many expecting the policy to go into effect starting in 2024.

Associating cryptocurrency transactions and mining operations with environmental concerns has often been a rallying point for global policymakers. In the United States, the New York state legislature voted in favor of a two-year moratorium on crypto miners that use energy generated by fossil-fuel power plants. EU officials previously rejected an outright ban on crypto mining, but MiCA could require firms to report any potential environmental impact.

Russia blocks OKX website for alleged unreliable financial information: Reports

The cryptocurrency exchange’s website was said to contain information about pyramid schemes, although no details were given. Similar bans have been imposed before.

The website of crypto exchange OKX was blocked in Russia by the state media monitoring service Roskomnadzor on Oct. 4. The agency told the TASS news agency that the website was blocked at “the request of the Prosecutor General’s Office for the dissemination of unreliable socially significant information of a financial nature.”

Roskomnadzor told local news outlet RBC that OKX had “published information related to the activities of financial pyramids, as well as information on the provision of financial services by persons who do not have the right to provide them” under Russian law. Although the website is blocked in Russia, it remains freely accessible through a VPN.

According to another local report, the administration of the OKX Russian-language Discord channel stated, “We do not recommend using a VPN when accessing OKX as this will trigger our risk controls and can lead to a ban of our account.”

OKX, which was founded in China and is currently based in Seychelles, is not observing Western sanctions against Russia. Recently, it reportedly failed to respond to a request by South Korean authorities to freeze accounts attributed to Terraform Labs co-founder Do Kwon, and is otherwise known for its sponsorships of Manchester City soccer and auto racing.

Similar website blockings have occurred before and have been successfully challenged in Russian courts. Binance was blocked in Russia between September 2020 and January 2021 before a regional court reversed the Roskomnadzor’s decision. Russia blocked six crypto news websites in 2020, but at least one of the sites, Bits.media, was able to have the block lifted a week later by a district court decision, although it remained on the agency’s blacklist.

Roskomnadzor blocked Cointelegraph shortly in 2019 after it had been on the blocked list for two years without effect.

Chinese mining giant Canaan doubles profits despite the blanket crypto ban

The Chinese crypto miner maker Canaan has been expanding its mining business, accumulating a total of 346.84 BTC by the end of June.

Major Chinese cryptocurrency miner manufacturer Canaan appears to have no issues with the local ban on crypto, as the company’s overall performance has continued to grow in 2022.

Canaan officially announced its financial results for the second quarter of 2022 on Thursday, reporting a 117% increase in gross profit from the same period of 2021. According to the firm, the Q2 profits amounted to 930 million renminbi (RMB), or nearly $139 million.

The company’s Q2 net income was 608 million RMB, or $91 million, or a 149% increase from 425 million RMB in the same period last year. Canaan noted that foreign currency translation adjustment in Q2 was an income compared to previous losses due to the U.S. dollar appreciation against RMB during Q2.

Despite posting significant profits, Canaan has found the second quarter a challenging period due to Bitcoin (BTC) plummeting below $20,000 in June, the company’s CEO, Nangeng Zhang, said.

“The COVID-19 containment lockdown in key cities in China also brought severe disruptions to our daily operations and demand for our AI chips,” he noted.

Zhang mentioned that Canaan has been expanding its global presence, particularly establishing international headquarters in Singapore. The firm has also been working to scale its mining business, generating more BTC with an improved power supply. As of late June, Canaan held a total of 346.84 BTC, or $8.1 million, the CEO said, adding:

“We are fully aware of the downward pressure from the Bitcoin price since the last fourth quarter and expect it to bring prolonged headwinds to our performance in the coming quarters. Nevertheless, we believe in the unique value of Bitcoin and its long-term prospects.”

Canaan’ chief financial officer James Jin Cheng echoed the CEO’s remarks, stating that the company expects a tougher market environment from the lower Bitcoin price level as well as increased energy price and various pandemic and geopolitical uncertainties. He stated:

“As the Bitcoin price further decreased in the second quarter, we responsively lowered our product price for spot sales to shoulder the pressure with our clients. […] We expect the gross margin to decrease dramatically in the second half of this year.”

The ongoing cryptocurrency winter is not the only concern of crypto mining companies in China though. As previously reported, China announced a blanket ban on all crypto operations — including mining and trading — in September 2021, pushing many firms to force global expansion and escape to other countries. Prior to the ban, China was taking down multiple crypto mining farms in a move to save energy and curb crypto operations in the country.

Apparently, the “great Chinese crypto ban” has not affected local crypto enthusiasts and firms too much so far as China reemerged as the second-largest Bitcoin mining country by January 2022. According to data from the Cambridge Bitcoin Electricity Consumption Index, China still hosts 21% of the total global Bitcoin hash rate, following only the United States, which produces 38%.

Mailchimp bans crypto content creators without prior notice

The email marketing service provider temporarily suspended crypto-related accounts due to alleged terms of service violations.

The email marketing platform Mailchimp appears to have suspended its services to crypto content creators. Platforms associated with crypto news, content or related services started to have issues logging into accounts, followed by notices of service interruptions that began surfacing this week.

Crypto-associated accounts such as the Edge wallet, a provider of self-custody crypto holding services, and Messari, a crypto research company, were among some of the affected.

Early this morning, Sam Richards, at the Ethereum Foundation Tweeted that the Ethereum Foundation Ecosystem Support Program is likewise facing suspension.

Add @Ethereum Foundation’s @EF_ESP to the list of customers @Mailchimp has rugged.

Anyone have good recommendations for email subscription services with solid API integrations? Or any that don’t pull the plug on paying customers without any notification or justification? https://t.co/Cjg2kkqwoT

— samrichards.eth (@samonchain) August 12, 2022

Cory Klippsten of Swan Private, a Bitcoin investment advisory firm for corporations and high net worth individuals, also Tweeted about the incident. Klippensten called to other marketing agencies in the industry to “step up” in light of this incident and others.

After Hubspot, Klaviyo, Twilio, and Mailchimp all getting taken bc of their crypto clients, it’s time for the entire marketing communications / CRM software industry to step up their security BIG time.

And yes, we’ve been taking additional measures. See @skwp thread above.

— Cory Klippsten (@coryklippsten) August 12, 2022

Indeed Mailchimp, the service previously used for the Cointelegraph newsletter, sent Cointelegraph a notice of service interruption this past Monday as well.

Though Mailchimp has responded in the time since Cointelegraph’s inquiry, no direct answer to our questions was provided. It later became clear that accounts were being disabled or “temporarily suspended” due to service violations. According to the Mailchimp website, the clause falls under the “Acceptable Use” policy, which outlines prohibited content.

In this section, it states, that “cryptocurrencies, virtual currencies, and any digital assets related to an Initial Coin Offering” are prohibited due to “higher-than-average abuse complaints.” The site policy claims to have been updated in May of last year.

Last year the emailing marketing service provider was acquired by financial services giant Intuit.

Instances of service disruptions or suspensions are surfacing again this week, though this is not the first time Mailchimp went after crypto-releated content. This type of behavior can be traced back to 2018.

It was in 2018 when Facebook also banned any cryptocurrency-related advertisement on its site due to breeches in the regulatory guidelines.

However, at that time the company made a public announcement that “cryptocurrency-related information isn’t necessarily prohibited” and can be distributed so long as the sender isn’t involved in, “the production, sale, exchange, storage, or marketing of cryptocurrencies.” There has yet to be an official statement from Mailchimp regarding the recent developments.

What was released on Wednesday, however, was a message from former CEO and co-founder of Mailchimp, Ben Chestnut. He announced that he is formally stepping down from the role after 21 years. In his place Mailchimp will be led by Rania Succar, formerly in charge of the QuickBooks Money team, also a part of Intuit.

TORN price sinks 45% after U.S. Treasury sanctions Tornado Cash — Rebound ahead?

TORN is near a historically strong support range, eyeing a 75% rebound by September 2022.

Tornado Cash (TORN) has lost almost half its market valuation two days after being slapped with sanctions by the U.S. Treasury Department.

The department accused Tornado Cash, a crypto mixer platform, of laundering more than $7 billion in cryptocurrencies, including a stash of $455 million allegedly stolen by North Korea-based hackers.

Immediate reactions were followed by U.S.-based crypto companies, including Circle and Coinbase. In a controversial move, the popular crypto firms blocked the movements of their jointly-issued stablecoin USDC tied to Tornado Cash’s blacklisted smart contracts.

TORN price drops 45%

The news prompted traders to limit their exposure to TORN, Tornado Cash’s native token.

On the daily chart, TORN’s price has slipped by approximately 45% since the Justice Department’s notice about Tornado Cash, to reach $18.50 on Aug. 10. By contrast, the valuation of all the crypto assets had plunged merely 6% in the same timeframe.

*TORN/USD daily price chart. Source: TradingView*

Interestingly, TORN’s selloff accompanied a spike in daily trading volumes, suggesting momentume.

TORN technicals suggest recovery

The downside move has pushed TORN price near a critical technical support.

TORN has been testing its $15–$18 range for a potential rebound due to its historical relevance as support. Notably, in January and June earlier this year, this level served as a springboard for TORN price to jump 275% and 100%, respectively.

*TORN/USD three-day price chart. Source: TradingView*

Therefore, a potential rebound move from the range could have TORN test $32.50 as its next upside target, which coincides with the 0.236 Fib line as shown above. In other words, a 75% recovery by September 2022

On the other hand, a breakdown below the support range sends TORN’s price to new record lows.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Bill to ban digital assets as payment passed the first reading in the Russian parliament

The document bears several conceptual contradictions, trying to qualify security tokens as a monetary surrogate.

A bill that had been introduced a week ago to the State Duma, the lower chamber of Russian Parliament, made a swift passing through first reading. Should it become a law, it would prohibit using “digital financial actives” (DFA) to pay for goods or services.

As reported by local media on Tuesday, the bill, sponsored by the head of the Financial Markets Committee of the State Duma Anatoly Aksakov, passed with a reservation. Albeit the document suggests an obligation for DFA exchange managers to withhold any deals implicating the usage of tokens as a monetary surrogate, the prohibition could be ceased in cases “prescribed by federal laws.”

Earlier legal professionals have criticized the bill for tightening the regulation of digital rights and tokenized assets. One of the main conceptual problems is that the bill treats the DFAs, known as tokens and not cryptocurrencies, as a payment method while they are generally being used as security tokens. Another lacuna is the term “monetary surrogate” — while the bill intends to prohibit to use DFAs as a monetary surrogate, there is no clear definition of the latter in Russian laws.

The bill also introduces the concept of an “electronic platform,” which is loosely defined as a financial platform, investment platform or information system in which digital financial assets are issued. Electronic platforms would be recognized as the subjects of the national payments system and obliged to submit to the central bank’s registry. Every major operation with DFAs — their emission, circulation, exchange and trade — would get its own registry.

The existing law on Digital Financial Actives came into force in 2021. In May 2022, the tax amendments on DFAs passed the first reading in the State Duma. In a separate development, two other important bills are continuing their journey through the legislative process. A bill “On Digital Currency” would define the regulatory framework for crypto in general, while a bill “On Mining in the Russian Federation” should set the guidelines for miners.