The new report published by the Bank for International Settlements (BRM) showed a strong correlation between the prices of cryptocurrencies and novelties regarding the intervention of supervisors. According to the BRM report - an organization based in Switzerland consisting of 60 central banks - cryptocurrencies have close links with news about regulatory actions in different national jurisdictions.
The BRM survey covered all published information from the beginning of 2015 until the end of June 2018. The Bank identified a total of 151 reported regulatory events, where the largest number came from China, India, Japan, the United Kingdom, and the United States, and observed a significant increase in such messages over the years. The report concluded that the markets reacted most strongly to information on the legal status of the crypto. The market reacted negatively to news that concerned bans, the possible application of securities market law to cryptographic assets and the announcement that the crypto would not be considered a currency.
Conversely, solid gains in the market took place in response to government disclosure of a new legal framework adapted to the cryptocurrencies. The report also states that announcements about anti-money laundering/counter-terrorism financing (AML / CFT) or other interventions that "limit crypto interoperability with the regulated financial system" have a strong negative impact on markets.
BRM noted that indefinite or general warnings against cryptographic risk, as well as messages regarding the possible but uncertain issuance of central bank digital currencies (CBDC), had a negligible impact on cryptocurrency prices.
In conclusion, the BRM proposed that regulations "do not have to be bad news for [cryptographic] markets - price reactions signal a clear preference for a particular legal status [...]". The bank is in favor of better coordination between regulators around the world, but suggests that its lack does not have to be an obstacle to effective intervention.
Let's now take a look at the Bitcoin technical picture at the H4 time frame. The market bounced from the level of $6,289 and went higher towards the technical resistance zone at the level of $6,521, but the bulls were too weak to break through this zone and the price did not even touch it. Currently, the price is hovering around the weekly pivot at the level of $6,401 and the test of the lower levels is still possible.
