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Crypto News

Russia to Legalise Bitcoin and Cryptocurrency Mining in Major Policy Shift

Russia has announced plans to legalise Bitcoin to address trade difficulties resulting from international sanctions. Since February 2022, sanctions imposed by the U.S. and other Western nations have hampered Russia’s global trade, particularly after its exclusion from the SWIFT network, which facilitates cross-border transactions.

President Vladimir Putin has approved a law permitting cryptocurrency mining to counter these challenges, effective November 2024. This move offers alternative trade methods by integrating Bitcoin into Russia’s financial activities. Companies wishing to mine Bitcoin must register with the Russian government, which will monitor their operations through a state database. Individual miners may operate without registration, provided their energy consumption remains below a set limit.

The Bank of Russia, the Ministry of Finance, and senior government officials will manage regulations. The new law also bans cryptocurrency advertising within Russia, a measure designed to mitigate public risk associated with digital currencies.

Ripple Reaches SEC Settlement, But the Fight May Be Far From Over

Ripple Labs has settled with the Securities and Exchange Commission (SEC) over allegations of selling an unregistered security, specifically its native token, XRP. The company agreed to pay $125 million and committed to adhering to securities laws.

Following this news, XRP's price surged by 30%, from $0.49 to $0.64 on trading exchange Binance, with trading volumes increasing from $1.2 billion to $4.2 billion within 24 hours. This resolution relieves investors, who view it as a positive development after a prolonged legal battle that casts uncertainty over both Ripple and the broader cryptocurrency industry.

However, the SEC is expected to appeal the decision, potentially prolonging the conflict. Under Chairman Gary Gensler, the SEC remains steadfast in its critical stance against the crypto industry, signalling that the regulatory battle is far from over.

Alameda Research Hit with Multi-Billion Dollar Judgement

FTX, a former cryptocurrency trading exchange, and its affiliated trading firm, Alameda Research, have been ordered to pay $12.7 billion to their creditors. This ruling follows a lawsuit filed by the Commodity Futures Trading Commission (CFTC). A New York judge issued the settlement order after the bankrupt company, previously led by disgraced cryptocurrency mogul Sam Bankman-Fried, caused significant financial losses for its customers.

The companies are now required to repay their debts, which may necessitate liquidating assets and utilizing remaining reserves to cover the amount owed. FTX and Bankman-Fried were found guilty of misleading the public by presenting FTX as a trustworthy platform despite engaging in illegal and fraudulent activities. The fallout from these actions caused a dramatic collapse in investor confidence within the cryptocurrency market, which was already fragile due to rising interest rates and economic uncertainty.

The immediate consequence was a widespread sell-off of cryptocurrencies in November 2022. Following this crisis, FTX filed for bankruptcy, and in March 2024, Bankman-Fried was sentenced to 25 years in prison.

Crypto Analysis

Bitcoin (BTC)

Bitcoin had a strong week, rebounding sharply from last Monday’s low of $49,000 and gaining 28% by Thursday. The price consolidated near its highs for the remainder of the week, then a recent early Monday morning pullback on lower-than-average volume, followed by a swift recovery at the time of writing, highlighting the current market volatility.

Bitcoin has tested the 0.618 Fibonacci retracement level, from the recent weekly high on July 29th to the significant low observed last Monday, which is $62,027. This rebound may have allowed bears to sell in that area. Bitcoin is consolidating around the 200-day exponential moving average(EMA), and its price is below all other major moving averages.

The Stochastic RSI is mid-ranging and trending upwards, which could also be seen as a bullish signal, indicating that there is still room for further price appreciation.

This next pattern, as shown below, is textbook for a bullish reaction. Last week’s analysis highlighted the broadening wedge pattern, which was carefully drawn to capture the most candle wicks and body closures. At the time, last Monday, the price was below the pattern, but the subsequent reclaim above the lower trendline was an ideal move.

Another key level to watch is the 0.618 Fibonacci retracement from the all-time high of $73,777 to Monday’s low of $49,000, which sits at $64,312. This level is significant due to the confluence of resistance, highlighted by the blue arrows and horizontal green shaded zone. It aligns with the breakout area of the last structural shift and the swing low of $63,456. This confluence and the Fib level could mark an ideal retest of old support now acting as new resistance.

Bitcoin: In Summary

We cannot overlook last week’s crash, especially with the significant volume on the downside, suggesting that the path of least resistance remains downward. However, it’s important to consider Bitcoin's recent erratic behaviour—sharp drops near all-time highs followed by strong recoveries. When viewed within the context of the expanding wedge pattern we've discussed, Bitcoin's movements seem less random and more structured than they initially appeared.

Despite the current downtrend on the daily chart, characterised by lower highs and lower lows, we may be part of a larger pattern. A break above the 0.618 Fibonacci level at $64,312 and the green-shaded resistance confluence could signal that bulls are regaining control and moving Bitcoin back towards the top of the expanding wedge pattern.

I look forward to revisiting the Bitcoin chart on our 'X' social media platform throughout the week.

Bitcoin Dominance (Including and excluding major stablecoins)

This week, I’ve decided to analyse two different Bitcoin dominance charts. The first excludes major stablecoins, allowing us to focus on Bitcoin's performance against altcoins that aren't pegged to fiat currencies. The second includes all coins other than Bitcoin, providing a broader view of Bitcoin's overall market dominance.

First, let’s look at Bitcoin dominance, excluding major stablecoins. Patterns can be powerful indicators, and as we approach the top of the traditionally bearish rising wedge at about 62.28%, it’s important to remember that this pattern doesn't guarantee a downside break. Instead, it signals that the price is gradually contracting until it breaks in one direction. Given that we’re at the upper range, an upside breakout is more likely.

The current price action, highlighted by three consecutive bullish candles driving to the top of the wedge, reinforces this bullish outlook. Dominance bears may look for a topping action, supported by the RSI bearish divergence noted on the chart and a move back down to the lower trendline, which could hint at the start of an alt-season. On the other hand, bulls will be aiming for a breakout above the upper trendline, further increasing Bitcoin’s dominance over altcoins.

Bitcoin's dominance, including major stablecoins, is steadily climbing towards the top of a parallel trend channel that began in April 2023. With four consecutive bullish weekly candles, the bullish case is strong, and a move to the top of the channel could bring dominance to around 60%. While bears might point to the RSI bearish divergence, its significance is lessened given the long timeframe. Additionally, the daily chart shows no bearish divergences, further supporting the likelihood that Bitcoin will outperform altcoins shortly.

Bitcoin Dominance: Summary

Bitcoin has been outperforming most altcoins since its ascent began in November 2022, and nothing in the current charts suggests that this trend won't continue. A reaction to the top of the rising wedge would be a good sign for altcoins. We will continue to watch the dominance charts over the coming week.

Ethereum (ETH)

Ethereum has been in a bearish trend since peaking at $3,541 on July 22, showing little sign of reversal. There is a strong support level below the current price, which we'll explore shortly, but let’s start with the daily chart analysis.

On August 4, Ethereum crashed below the weekly support level of around $2,870, marked by the horizontal black line and blue arrows indicating swing pivots. This was followed by what may be a capitulation candle the next day. After a brief pullback to the lows, bullish price action emerged last Thursday with a bullish engulfing candle. Currently, Ethereum is consolidating at the highs of this short-term range.

The substantial volume during the downtrend is concerning for bulls, as the volume has decreased in the recent upward move, suggesting it could be a mere retracement within the downtrend. Bears may target the former $2,870 support, potentially acting as resistance. A bullish move above this level with solid price action and volume could counter the bearish outlook. Price is below all major moving averages, including the 10-day EMA at the current time of writing.

Finally, coming to the weekly chart, it is important to note the extremely strong support level, which was broken resistance at around the $2,141 level, and this came into play last Monday when we bounced straight off this area and are currently producing a bullish pin bar. In this case, the price begins the week at the top of the candle, comes down to form a low, and then ends up closing the candle near the top of its range, which is exactly what has happened here.

Ethereum: Summary

Bulls will need a strong effort to reclaim the support line now acting as resistance to reverse the bearish trend. However, given the recent bullish pin bar and substantial support below the current price, there is potential for a bullish move. Overall sentiment remains negative, and until Ethereum breaks above the 10 and 21-day moving averages, the path of least resistance continues to be downward. We will monitor Ethereum’s performance throughout the week.

IN CONCLUSION

Last week, we noted that despite the dramatic drop on Sunday, Bitcoin had the potential to reverse its fortunes, as seen in similar past recoveries and the influence of the expanding wedge pattern. Indeed, Bitcoin has shown a bullish bounce, though it is too early to determine if this upward movement will continue.

While Bitcoin's recent performance has been positive, altcoins have struggled, with many retracing their gains and returning to their previous bear market lows. The crypto market has largely focused on narratives, except for real-world asset and meme coin rallies, leaving altcoins with limited momentum. Until Bitcoin's dominance decreases, it appears to be the more favourable investment.

Please note that this analysis is not financial advice, and you should conduct your research. I look forward to analysing the charts further throughout the week.