Bitcoin analysis for 31/10/2018
According to the financial media, the Financial Services Authority (FCA) of the United Kingdom has ruled that it is considering banning the sale of derivatives based on cryptocurrencies, Unlike in the cash market, trading, transactions, and consultancy in the field of cryptographic derivatives, such as differential contracts (CFDs), options and futures, are now in the FCA regulations and require official authorization.
In the published statement, the supervisory body informed that in the first quarter of 2019 it will start a consultation on whether it will ban the sale in the future. The supervisor’s comments appeared on the same day as the new Cryptoassets Taskforce report, which includes representatives of the FCA, the Treasury and the Bank of England. He emphasizes that leveraged derivatives based on cryptography are even riskier than spot transactions because they can strengthen and “cause losses that go beyond the initial investment”, and impose additional fees. The sale of cryptographic derivatives is becoming more and more profitable for online trading platforms listed on the London Stock Exchange, citing IG Group and Plus500 groups. The FCA is reportedly planning a parallel consultation to extend its regulatory jurisdiction to cryptographic resources alone, as well as to infrastructure providers such as stock exchanges and portfolio services. In his statement, the FCA explained that, in his opinion, crypto assets are not of intrinsic value, as a result of which investors should be prepared for the loss of all capital they have invested, and that this asset class as a whole constitutes a future potential threat to stability.
Let’s now take a look at the Bitcoin technical picture at the H4 time frame. After the breakout from the consolidation zone, the market has made a new local low at the level of $6,173 and currently is consolidating around the level of $6,225. The nearest technical resistance is now the zone between the levels of $6,287 – $6,297. The larger time frame trend remains down, so the bears can resume the move down any time soon.