Bitcoin’s price regains former levels and once again proves resistant to significant blows from regulators that used to have a much more drastic effect on its stability. After the reality of Chinese Bitcoin exchanges stopping activity kicked in last week, the price went down from around $3,900 to losing several hundreds of dollars in only a few days. But after surviving a big loss in market traffic, Bitcoin’s price is once again back up to $3,950 while market signals suggest a positive future course.
But while Bitcoin may be losing its footing in China, it has certainly found a fan base in the South American nation of Venezuela, where hyperinflation has turned many Venezuelans into Bitcoin converts. Namely, according to a Futurism report based on the CNBC interview of Daniel Osorio, a representative from Andread Capital Advisors, Venezuela might be one of the first sovereign states to go through a “Bitcoinization and forgo its national currency – the Bolivar.
As we previously reported, Venezuela has a strong illegal mining community which forced a governmental crackdown on miners and Bitcoin exchanges in the past. But with the country less than a week behind on paying its substantial bond interest and the hyperinflation driving prices high up, more people are likely to turn to Bitcoin, prompting the government to consider Bitcoin adoption.
Volume Down; Buying Ensues
In the past week since our last update, the price of Bitcoin went through a major swing, suffering drastic changes in volume and capitalization when compared to two weeks ago. From its $4,000 range on Wednesday, it crashed down to its week’s lowest point of $3,553.53, only to start going up and down again during the weekend. Currently, it is back to $3,950.
Market volume and capitalization also suffered with the price, with the volume dropping down below $0.9 billion for the first time in weeks and the market cap falling down below $60 billion. But things have picked up since then as the trading volume climbed over $1.1 billion and the market cap at $65.4 billion.
Our technical analysis shows that the overall market signal is very pro-buy, with 10 out of 12 moving averages and 8 out of 12 oscillators showing buyers have the upper hand. The SMA 100 is safely above the SMA 200 on this time frame, showing that the upside path is the most probable course.
Judging from the current market signals and the increase in interest, the price seems to be heading upwards. However, as these are volatile times, especially with the North Korean crisis still present, it would be wise to watch out for any geopolitical events from that side that could have an effect on the price.
Japan to Tighten Exchange Monitoring
Japan’s FSA (Financial Services Agency) has issued a report on Sunday informing the public that Bitcoin exchanges will be put under “full surveillance” starting from the following month, Fortune reports. The scrutiny will reportedly include monitoring the customer asset protection mechanisms of Japan’s cryptocurrency exchanges but also on-site examinations by the FSA.
Earlier this year, Japan passed a legislation that also obliged cryptocurrency exchanges to set up know-your-customer and anti-money laundering mechanisms. Per the new law, cryptocurrency exchanges also have to set up security mechanisms to lower the risk of cyber attacks, like was the case with the infamous Mt.Gox exchange.
According to the latest announcement, exchanges have until the end of September to register with the Authority, which has built a 30-people task force to examine the security practices and how customer assets are separated from their own.