Crypto Industry News:
The European Central Bank (ECB) said that cryptocurrencies are not currently a threat to financial stability in the Eurozone.
In his last article on the subject, the ECB said that the total value of cryptocurrencies is small compared to the financial system, and the links with the financial sector are still limited. In addition, it seems that banks in the EU do not have "systemically significant" cryptocurrencies.
The ECB also said that cryptocurrencies do not function as money. The "very low" number of merchants now allows you to buy goods and services using Bitcoins and there is no "tangible impact on the real economy" or monetary policy.
"High volatility of cryptocurrency prices, lack of central bank support and limited acceptance among sellers currently make it impossible to use cryptocurrencies as substitutes for cash and deposits, and also make it difficult for cryptocurrencies to meet monetary assets in the near future" - the bank states.
Regarding the stablecoin concept, the ECB claims that the crypto may become less volatile if it is secured by central bank reserves. However, this may bring new problems: "Such collateral may cause additional demand for central bank reserves, which may affect monetary policy and its implementation".
Technical Market Overview:
The ETH/USD pair continues to unfold wave 4 correction and the most likely pattern is a Triangle pattern, which is very typical for this corrective cycle. After the corrective cycle in wave 4 is completed, there is still one more wave up missing in order to complete the impulsive wave. The local technical resistance is located at the level of $265.35 and the local technical support is seen at the level of $245.00. Please keep an eye on the short-term trend line dynamic support as any violation of this support might lead to sooner than expected down move towards the level of $226.17
Weekly Pivot Points:
WR3 - $10,110
WR2- $9,180
WR1 - $8,627
Weekly Pivot - $7,705
WS1 - $7,135
WS2 - $6,315
WS3 - $5,743
Trading Recommendations:
The best trading strategy in the current market conditions is to buy the local pull-back as wave 4 is in progress in anticipation of the wave 5 to the upside. It might take some time for the wave 4 to complete, so it does not have to be a day-trading strategy. Please pay attention to the technical support at the level of $226.17 as any violation of this level will accelerate the sell-off towards the next technical support at the level of $212.12.
