Facebook Senate Hearing Weigh on Cryptos, as all cryptocurrencies took yesterday a hit, with Bitcoin and Ethereum down 12%, and most of the top 50 cryptos taking a big hit, with ICON (-29.38%) the top underperformer followed by Crypto.com Coin (-26%) and Egretia (-23.48%).
Today the news is focused on Facebook’s Libra Senate hearing. Cryptoslate.com headline is “Senate hostile towards Libra, Facebook suggests regulators must act or risk losing US dollar dominance to Bitcoin” which reflects quite well the dilemma the senators are facing.
According to the article, the focus of the hearing between the Senate and David Marcus, Calibra’s head, was the lack of trust.
“We will take the time to get this right. We expect the review of Libra to be the most extensive ever. We are fully committed to working with regulators here and around the world. And let me be clear and unambiguous. Facebook will not offer the Libra digital currency until we have fully addressed regulators concerned and have received appropriate approvals,”
David Marcus, also suggested that if policymakers do not act wisely, others could threat the dollar dominance.
“I believe that if America doesn’t lead innovation in the digital currency and payments area, others will. If the country fails to act, we could soon see a [crypto]currency controlled by others whose values are dramatically different from ours.”
On the other, hand Senators responded that Facebook is dangerous because of its past stream of violations of the privacy of its users.
“Facebook is dangerous. Facebook might not intend to be dangerous, but surely, they don’t respect the power of the technology they’re playing with,”
Not everything went wrong. Although they mostly do not trust Facebook, senator Pat Toomey, for instance, said that it was premature “to strangle this baby”. And also stated
“It’s widely premature to come to the conclusion that we have to act now to prevent what could be a very constructive innovation in financial services. I think there are tremendous potential benefits of blockchain technology and cryptocurrencies. It’s clear they could help us lower payment transaction costs, facilitate access to capital, provide pseudo-anonymity, and provide levels of security that other forms of currency have not.”
The Bitcoin price dropped yesterday heavily with the news of the hostile senate Facebook’s Libra hearing. The price, right now, is making a timid comeback with what seems a morning star pattern in the 4H chart. The Stochastics oscillator is in the oversold area and trying to make a crossover. We see a potential bounce to the $9850-$10,000 area. From there it is likely to continue descending and look for the next support at the $8.900 level. We should be careful with our trading today because it is the second day of the Facebook Senate hearing.
Ripple continue moving close to its current descending trendline. Yesterday was one of the least affected by the Senate Facebook hearing. Nonetheless, its price fell more than 6%, but currently is having a small bounce like the rest of the cryptocurrencies. We have to expect more volatility today due to the second round of the Facebook Senate hearing.
Ethereum is following the steps of Bitcoin and moves in a tight descending channel. Right now, the price is retracing a bit, but the indicators and the price action is clearly bearish, so it is not advisable to take long positions. Today is the second day of the Senate hearing on Facebook’s Libra, so we must expect volatility in either direction.
Litecoin continues moving in a descending trend. The price is in a consolidation phase, as well, but the overall sentiment on cryptos continue to be bearish. As said in the previous analysis, we should be cautious today, since the Senate hearing on Facebook can be an excuse for large price swings in any direction.