Ethereum (ETHUSD) continues consolidating just below the psychologically key 250 level after a torrid H119 bounce.  Significantly, although ETHUSD remains positioned to resume pushing higher later this month, ETHUSD appears to be vulnerable to more profittaking this week as it tests upchannel support (on the weekly chart).  Note that the two breaks below upchannel support (on the daily chart) in April are specific to the Liquid ETHUSD market, due to insufficient liquidity, marketmaker and circuitbreaker support (specifically on this exchange market) and not a spike move down on ETHUSD (across other exchanges markets).  The weekly Stochastics remains somewhat overbought, which together with the downsloping daily RSI, Stochastics and MACD, signal weakness at least for the next several days.

Industry Fundamentals

Facebook is publishing its whitepaper on its stablecoin project (tentatively named “Globalcoin” or “Libra”) June 18, and hiring aggressively as it accelerates its discussions with regulators, the largest US crypto exchanges, some of the world’s largest marketmakers – Jump and DRW – and potential investors in its USD 1B raise (to serve as collateral in the form of a basket of fiat currencies for the stablecoin).  Fidelity’s institutional crypto trading offering is expected to be live in the next few weeks, with retail brokerage giants Etrade and TD Ameritrade also preparing to launch trading in a few top coins.  The market is increasingly shrugging off the fears around Bitfinex covering up losses with funds earmarked for backing Tether (USDT), especially as it has apparently already received commitments for USD 1B in its current raise to offset funds frozen by US, Polish and Portuguese authorities.  With liquidity on USDT significantly higher than newer, competing USD-backed, audited stable coins due not in small part to USDT enjoying first mover advantage and the network effects from having the longest established history, the market appears to be largely sticking with using USDT which is listed on more crypto exchanges and offers superior liquidity.  Longer term industry bulls are increasingly buying on dips as the sector overall gains interest from IBM’s use of Stellar Lumens and a USD stablecoin as part of the World Wire blockchain network for regulated financial institutions (announced in March).  Ongoing anticipation is building for the coins being developed by leading messenger apps (i.e. Facebook/Whatsapp/Instagram, Line, Kakao) and banks (i.e. JP Morgan, Mizuho, Bank of Tokyo-Mitsubishi UFJ).  The launch of BAKKT has been delayed multiple times with no announced target go-live date.  A race continues to launch STO exchanges and consultancies ahead of increasingly regulatory clarity on STOs.

Ethereum Fundamentals

The SEC appears increasingly warm to the idea of approving Ethereum futures, especially as the February Ethereum fork positions Ethereum for greater scalability, better processing time for developers, and improved network economics.  ETHUSD bulls are looking forward to further scalability improvements in the form of Proof of Stake and Sharding scheduled for 2019-2020.  Additionally, proceeds of ETH from fresh or past ICOs will continue to see less conversion into fiat with ETHUSD having recently hit levels last seen in September.  Meanwhile, Ethereum developers have their work cut out for them as debate rages among developers and miners on mining incentives, while newer blockchain competitors built for greater scalability attract more developers and funding.

EthDaily June 10
Ethereum (Liquid ETHUSD) Weekly/Daily

Check out more about today’s fundamental analysis recap on the crypto industry, as well as technical and fundamental analysis on Ethereum and Bitcoin here.