Bitcoin: The price turbulence is evident, but what does the future hold for the significant crypto asset?

Backdrop

The crypto market is known for the intense volatility driven by liquidity from across the globe. During the beginning of the pandemic, one of the major decisions by the Federal Reserve of The USA was to ease the interest rate norms, i.e., reducing the rate of interest and fueling the economy with sufficient resources (in monetary terms) to meet the requirements of normalcy in general for the public.

What happened to the crypto market space?

The reduction in the interest rates resulted in the outflow in the bond markets, and the resultant idle monies started moving into risky asset classes (in comparison to bond and debt market) such as equities and crypto space. The large fund houses also began investing in the crypto markets after witnessing the turmoil and tremendous opportunities in this space.

According to Reuters, “Total inflows into the sector were $9.5 billion as of Nov. 26, an all-time high. In 2020, total bitcoin inflows were $6.7 billion”.

Due to the increase in liquidity, there was immense growth in the crypto asset class, which can be seen in the below data at the beginning of the pandemic.

Source: Chainalysis

Source: Huobitech

What does the future hold?

In Q1 2022, the volatility in the crypto market space has been subdued, and also, we have witnessed a significant dip in the prices of the crypto markets. This resulted from continuous monitoring of the crypto market space and the introduction of the norms around the same, followed by the hike in interest rates by the federal reserve.

The taper hangs in the air. As discussed above, the non-stringent monetary policies were the cause of the free rise in crypto prices during the pandemic. With the pandemic showing signs of resolve, the Federal Reserve is on the brink of raising the interest rates back to normal, pulling out the money from the risky asset classes to move into the safe-havens.

The uncertainty on the regulatory front is slowly submerging and becoming stable as President Biden signs an executive order on government oversight of cryptocurrency that urges the Federal Reserve to explore whether the central bank should jump in and create its digital currency. There was a short-term spike in the crypto market space with the said order.

Among the two aspects of the scale, the taper effect is on one side and inflation on the other. With the prospects getting more vital for the hike in interest rates, the liquidity trims out as the money pumped in through Quantitative Easing (QE) is withdrawn, which blurs the immediate prospects of the crypto market leader, Bitcoin,  to set upon new highs in the market.

The below chart depicts the extreme run of the crypto asset and the intense volatility over the previous periods –

Source: Author’s Trading View Chart

Conclusion

To conclude, $BTCs prior performance, ($6,000 to $64,000 in FY 2020 – FY 2021) will not be a cakewalk. The global economic factors will play a key role for the $BTC and other cryptocurrencies in deciding the direction of the markets. The shift in the cryptocurrency market trend is still far off with roughly 20% to go (an example by $BTC, which looks slightly like a trend reversal above $45,000). Similarly, the entire market of cryptocurrencies will have to submit itself to wild decisions the policymakers create before regaining the all-time high market capitalization of ~ $3 Tn from the current valuation of ~ $1.7 Tn.

Below is the pricing structure of $BTC (on monthly trend) –

Source: Author’s Trading View Chart

Feel free to reach out for more content or chat with the author at Digital Presence at your likes!

Compliances: Adhering to KYC and AML norms is as essential as breathing in Oxygen?

Backdrop

Over the last three to five years, there has been a significant rise in the crypto exchanges and wallets around the globe, driving immense liquidity with volumes, attracting new customers onto the platforms, and creating new altcoins, exchanges, and framing policies alongside.

Blockchain is a free and decentralized network with a minimalistic presence of authorities currently. Cryptocurrency and its likes (altcoins, Defi) reside on this network, enabling the users to access the technology in its essence. Unlike the traditional financial institutions, blockchain technology is not in the purview of the government or regulatory’s tracking. This provides the users of blockchain technology an ability to hide the nature and flow of transactions.

THE NECESSITY for the compliance requirements

With the mounting pressures and the tightening policies from regulatory authorities to curb money laundering, exchanges and wallets have become forced to comply with the KYC norms for the users to come onboard and transact using their platforms, i.e., to buy and sell, and withdraw monies from the platform to their bank accounts.

According to Chainalysis Report, “the value of illicit transactions surged in 2021 from $7.8 billion the year before; these nefarious transactions accounted for 0.15% of crypto volume last year, down from 0.62% in 2020”. Since 2017, cybercriminals have laundered almost $33 Bn.

Recently, Cardano curators decided to advance with the compliance of the $ADA token for ALM. In one of the statements issued by Coinfirm, “Coinfirm will provide Cardano AML/CFT analytics for all of the assets minted on the Cardano blockchain. This will apply to both assets already minted before the partnership and future assets. This will enable law enforcement agencies to track down illegal activities carried out on the blockchain by bad actors”.

The $ADA token has taken an upfront move while the others remain sceptical about confirming their acceptance and being part of the regulatory system.

Conclusion

As the decentralized networks start feeling pressured to be monitored and adhere to the norms of KYC and AML, it is inevitable for them to strive away otherwise when they need to be a part of the system globally. Although this breaks the very foundation of a decentralized network, it becomes a challenging task for the exchanges and the system to find a common practice to fix the loopholes of the chain if they ought to remain independent and free from regulatory hassles. Otherwise, failing wider KYC and AML compliance programmes in the crypto market is inevitable.

Feel free to reach out for more content or chat with the author at Digital Presence at your likes!

Market View | August 18, 2021

Welcome, all! Here, we present our market views based on the factors visible in the market, domestically and globally. To begin –

Recap of last trading session (10 August 2021) –

  1. With the help of Nifty IT pack especially of anything else, we inched higher yesterday.
  2. TCS, Infosys and other IT Scrips closed higher with volumnous upmove.
  3. Although the broader scenic tends to appear positive, all the mid caps and small caps actually bled.
  4. The Banking Space remained posied especially with a very silent move until the last 45 minutes yet still remains in a narrow range.
  5. Check and subscribe to stay updated for 18th August analysis.

IPO Section

There are no open IPOs currently in the market.

Domestic Cues

  • Today is a weekly expiry of Index Contract and there will be volatility poised evenly. As the premiums are still heavily built, we are inclined to witness a rangebound session for majority of time. Play safe with your capital in case you are a buyer of options, especially.
  • Nifty has likely supports at 16500 followed by 16150 and 15960 levels with resistance at 16700 and 16750.
  • The momentum in couple of index scrips is strong whereas the mid caps and small caps among else are seeking for relief move.
  • The index is just a benchmark but doesn’t represent the whole population of stocks, ever. It’s only a gauge of the market sentiment for investors but the reach has just been sought differently assuming to compare the top 30 or 50 or the various index scrips and move along with them. That would be a gross error on one’s part and thourough research is necessary.
  • SGX indicates a slight gap up opening for Indian Markets.
  • India likely to withdraw sugar export subsidies from new season.
  • Apollo Hospitals outperfomed from the last 2 sessions and is an interesting scrip.

Global Cues

  • The Dow Jones Industrial Average fell 0.79%, snapping a five-day winning streak.
  • The S&P 500 lost 0.71% after posting a new record high on Monday, and the Nasdaq Composite dropped 0.93%.
  • Shares in Asia-Pacific were mixed in morning trade as investors look ahead to the Reserve Bank of New Zealand’s interest rate decision.
  • Yesterday, NZDUSD fell over 1% with stringent policies around the economy and also with RBNZ policy meeting to come out shortly.
  • Japan’s Nikkei is hovering around it’s previous close.

Long Term

  • UCO Bank
    • There’s been a retest to a price of above 14, with 10% return from the last discussion (CMP 13.1. 3% up yet)
  • JSW ISPL
    • Current Market Price stands around INR 36, with a return of 10% until now,
    • Recent highs were 37.15, 13% above from the levels discussed.

Results Today – there are no companies declaring results today for Q1 2021-22.

Scrips in FnO Ban – Cadilla Health | CANBK | NATIONALUM | VEDL | SAIL | SUNTV | PNB

Source: NSE Website

Disclaimer:

The analyst is not a SEBI RIA. The views expressed by Govardhan are completely to serve educational and learning purposes. Please consult your financial advisor before entering any positions. We, in no way, are responsible for the profits made or losses incurred.

Feel free to buy me a coffee, and check my digital presence!!

Thanks! Have a Good Trading Day!

Market View | August 11, 2021

Welcome, all! Here, we present our market views based on the factors visible in the market, domestically and globally. To begin –

Recap of last trading session (10 August 2021) –

  1. Although indices closed marginally higher to previous close, the day was, especially after mid-noon, was a roller coaster ride.
  2. In observation to derivatives, the morning had a huge premium at straddle positions and those of ATM contracts were quite a scenic for option writers [Ex: Bank Nifty – Spot 36216 | Future 36296 | 36200 12 August 2021 Expiry – CE at 256 & PE at 216
  3. As discussed in yesterday’s view, we faced resistance on upside after the quick gapup move, i.e., around 16300 & 16350 (High – 16359)
  4. The metals, mid caps and small caps were among the losers yesterday although the benchmark indices closed in green.
  5. Check and subscribe to stay updated for 11th August analysis.

IPO Section

  • There are 4 IPOs in action this week.
  • GMP is on rise for all the 4 IPOs (Note: GMP is not a decisive factor, but only a rough indication).
  • IPO Timelines –
    • CAR TRADE – 9th August to 11th August
    • NUVOCO – 9th August to 11th August
    • APTUS – 10th August to 12th August
    • CHEMPLAST – 10th August to 12th August
CAR TRADE | APTUS | NUVOCO | CHEMPLAST
  • More details to follow soon. Subscribe to the blog, follow the channel and stay updated.

For 11th August 2021 –

Domestic Cues

  • Although there’s been a volatile moment across the scrips and there’s been a decline in many, the breadth of the overall indices or benchmark indices remains positive.
  • There’s been a sell off in the mid caps and small caps alongside the metal space.
  • The supports still hold good at 16170 (a test couple of times) followed by 15960 – 16000.

Global Cues

Finding Way in Markets (originally, this is an active WhatsApp group where we discuss Finance & Economics, and here are those snippets)

  • Asian markets started on a weaker note.
  • The commodity prices have been heavily volatile with metals showing signs of stability while crude cruised upwards.
  • US Markets are holding within the range with not so attractive earnings on the street.
  • SGX Nifty is slightly trading upwards. Caution advised.
  • Long Term
    • UCO Bank
      • Current Market Price stands around INR 12.85.
      • The promoters (Govt. of India) are increasing their stake over time.
      • One serious red flag found is the humongous number of contingent liabilities and everything aside that seems improving.
      • It’s a risky bet but the rewards are enticing, hence a pick from our discussions.
      • We’re looking for 60% return in this position.
    • JSW ISPL
      • Current Market Price stands around INR 34.8.
      • The fundamentals of the company are sound.
      • On preliminary research we haven’t found any notable red flags.
      • We’re looking for 20% return in this position.

Disclaimer:

  • We hold positions in these scrips.
  • Although we come up with unbiased views, it is in good faith about disclosing whether we we hold positions in these scrips.

Results Today – below are the companies declaring Q1 – 2021-22 results today.

Bata India | Pidilite India | Cummins India | Cadilla Health Care

Scrips in FnO Ban – CANBK | IBULHSGFIN | NATIONALUM | RBLBANK | SAIL | SUNTV | PNB

Source: NSE Website

Disclaimer:

The analyst is not a SEBI RIA. The views expressed by Govardhan are completely to serve educational and learning purposes. Please consult your financial advisor before entering any positions. We, in no way, are responsible for the profits made or losses incurred.

Feel free to buy me a coffee, and check my digital presence!!

Thanks! Have a Good Trading Day!

Market View | August 10, 2021

Welcome, all! Here, we present our market views based on the factors visible in the market, domestically and globally. To begin –

Recap of last trading session (09 August 2021) –

  1. All the indices remained in a very narrow range yesterday, with closing at a very negligible difference to Friday’s close.
  2. The indices are facing resistance on upside and they need additional volumes to kick in to drive with breadth in the market.
  3. Check and subscribe to stay updated for 10th August analysis.

IPO Section

  • There are 4 IPOs in action this week.
  • GMP is on rise for all the 4 IPOs (Note: GMP is not a decisive factor, but only a rough indication).
  • IPO Timelines –
    • CAR TRADE – 9th August to 11th August
    • NUVOCO – 9th August to 11th August
    • APTUS – 10th August to 12th August
    • CHEMPLAST – 10th August to 12th August
CAR TRADE | APTUS | NUVOCO | CHEMPLAST
  • More details to follow soon. Subscribe to the blog, follow the channel and stay updated.

For 10th August 2021 –

Domestic Cues

  1. Promoters are now allowed to give personal guarantee on foreign assets.
    • Such move by RBI facilitates ease of doing business by fewer approvals and simplied processes.
  2. Indices are hovering in a narrow range and will need to break either side to give a directional move.
  3. The resuts season continues and quite a couple of companies are declaring results today. Check below for more details.
  4. We have good support at 15960 – 16000 levels on Nifty. Long positions initiated for short term can hold that level as SL.
  5. At 16300 – 16350 lies the major resistance on index level.

Global Cues

  1. SGX currently indicates a narrow gap down ( 9 points at 0830 hours IST)
  2. Asia stocks drifted down in the early hours of Tuesday and show a weak momentum.
  3. Commodity markets steadied after Monday’s selloff as weighed talk of stimulus withdrawal.
  4. The resurgence in the delta virus variant cases across the globe is bringing a note of caution in the markets.

Results Today – below are the companies declaring Q1 – 2021-22 results today.

Manapurram | Mothersumi | Coal India | Jindal Steel | Siemens | Lupin | MFSL | Trent | Powergrid

Scrips in FnO Ban – CANBK | IBULHSGFIN | NATIONALUM | RBLBANK | SAIL | SUNTV

Source: NSE Website

Disclaimer:

The analyst is not a SEBI RIA. The views expressed by Govardhan are completely to serve educational and learning purposes. Please consult your financial advisor before entering any positions. We, in no way, are responsible for the profits made or losses incurred.

Feel free to buy me a coffee, and check my digital presence!!

Thanks! Have a Good Trading Day!

Market View | August 06, 2021

Welcome, all! Here, we present our market views based on the factors visible in the market, domestically and globally. To begin –

Recap of last trading session (05 August 2021) –

  1. Not surprising anymore with how we’re bolstering towards new boundaries; we just broke the highs again.
  2. We hit a new All Time Highs of 16349.45 on Nifty, although the selling pressure came in during the last hour, closing at 16294.6.
  3. We closed above the previous day’s close and it certainly looks rosy now.
  4. Bank Nifty as discussed, retraced from highs and underperformed compared to Nifty, closed at 35834, 0.5% down from previous day.
  5. We covered the market analysis in this in video. Check and subscribe to stay updated for 6th August analysis.

IPO Section

  • All 4 IPO’s have been performing well and the GMP is on rising (Note: GMP is not a decisive factor, but only a rough indication)
  • One more day (August 06, 2021) remains to apply for the IPO.
Devyani International Ltd. | Exxaro Tiles Ltd. | Krsnaa Diagnostics Ltd. | Windlas Biotech Ltd.

Below is the poll in the tweet from my Twitter, about the traction.

Tweet Snapshot from my Twitter Profile

For 6th August 2021 –

Technical Levels

We’re in uncharted territory for Nifty and Sensex, yet we’re ought figurate the levels we can base on our analysis and check here.

Domestic Cues

  1. RBI will anounce its decision from the meeting of monetary policy committee which began on 4th August.
  2. Banking Index (Nifty Bank) will be on track for the day with the major decision from RBI meeting coming in.
  3. Indian markets are at All Time Highs and caution is advised from entering any aggresive positions.
  4. We have quite many results listed for today ( note below ) and the weekend approaching. Risk Averse traders / investors need to stay cautious.
  5. We have good support at 15960 – 16000 levels on Nifty. Long positions initiated for short term can hold that level as SL.

Global Cues

  1. U.S. stock indexes rose on Thursday after data showed a decrease in unemployment benefit claim.
  2. The decline in shares of health insurer Cigna dragged healthcare stocks lower.
  3. DOW and NASDAQ performed well and closed above its pervious highs by 0.59% and 0.62%.
  4. Shares in Asia-Pacific largely slipped in Friday morning trade as investors await the release of a closely watched US jobs report for this week.
  5. SGX Nifty indicated a slight gap up of 19 points, and indicates caution.

Results Today – below are the companies declaring Q1 – 2021-22 results today.

STAR | National Aluminium | Berger Paints | BEL | Balkrishna Industries | M&M | ALKEM | PEL | Torrent Pharma | ZEEL | ASTRAL | SAIL | CUB | Tata Power | AU Bank | Muthoot Finance | Hindalco | Aarti Industries | Metropolis | Voltas

Scrips in FnO Ban – SunTV

Source: NSE Website

Disclaimer:

The analyst is not a SEBI RIA. The views expressed by Govardhan are completely to serve educational and learning purposes. Please consult your financial advisor before entering any positions. We, in no way, are responsible for the profits made or losses incurred.

Feel free to buy me a coffee, and check my digital presence!!

Thanks! Have a Good Trading Day!

Market View | August 05, 2021

Welcome, all! Here, we present our market views based on the factors visible in the market, domestically and globally. To begin –

Recap of last trading session (04 August 2021) –

  1. Woooh! We hit an All Time High again yesterday, and this sort of becoming a common phrase these days.
  2. Nifty sprang all the way up towards 16300 (high of 16290.2)
  3. Bank Nifty didn’t take any less, and rocketed all the way to 36200 (high of 36219.8)
  4. The results from SBI were of a great deal for the Banking Index as it flew amidst the gigantic short covering.
  5. Rupee appreciated against dollar by ~19 paise in the hours today.
  6. Yesterday, 4 IPOs opened up (updates to follow in separate write-up) – 
Devyani International Ltd. | Exxaro Tiles Ltd. | Krsnaa Diagnostics Ltd. | Windlas Biotech Ltd.

For 5th August 2021 –

Technical Levels

We’re in uncharted territory for Nifty and Sensex, yet we’re ought figurate the levels we can base on our analysis and check here.

Domestic Cues

  1. Reserve Bank of India’s monetary policy decision briefing to follow on Friday.
  2. Titan sees a dip in its profit in comparison to PY.
  3. We’re well above 16000 on Nifty with supports at 15900 and 16000 levels. Until these levels are held, it’s all being a buy on dips.
  4. We’ll witness a volatile expiry as the VIX shot up by 12% approximately in the last 2 sessions and there’s the little premium which is left.
  5. We need to hold out and see if Bank Nifty is coming for a retest here or will sustain and have a good pull back towards its highs as it is the only index left to touch its All Time Highs now.

Global Cues

  1. Asian stocks were steady in the morning today.
  2. It comes as a surprise as to how the Asian indices are fighting their way against the US indices as they performed with mixed sentiments over economic data and also comments from Fed Reserve Official that the central bank is on course to taper stimulus support.
  3. On other side, Oil held below $70 USD a barrel after an increase in the US Crude inventories data as the scare of demand kicks in after the rise in COVID 19 cases.

Results Today – below are the companies declaring Q1 – 2021-22 results today. 

Escorts Ltd | Cipla Ltd | Tata Chemicals Ltd | REC | Gail India | India Bulls Housing Finance | Gujarat Gas Ltd

Scrips in FnO Ban today – SunTV

Source: NSE Website

Disclaimer:

The analyst is not a SEBI RIA. The views expressed by Govardhan are completely to serve educational and learning purposes. Please consult your financial advisor before entering any positions. We, in no way, are responsible for the profits made or losses incurred.

Feel free to buy me a coffee, and check my digital presence!!

Thanks! Have a Good Trading Day!

Market View | August 04, 2021

Welcome, all! Here, we present our market views based on the factors visible in the market, domestically and globally. To begin –

Recap of last trading session (03 August 2021) –

  1. Voila! Voilaa! We hit an All Time High yesterday. Not just that, we went above 16,000 on Nifty! Quite a feat. Isn’t it?
  2. Indian Markets witnessed a rapid upmove in yesterday’s trading session and have bolstered to set new records.

For 4th August 2021 –

Technical Levels

The detailed technical analysis structure can be viewed here.

Domestic Cues

  1. The momentum from yesterday, on the upside, has been clearly visible. We will witness quite some volatility coming into the pact with proft booking in Index Scrips, Chemicals, Energy and IT Space.
  2. Although an uncharted territory now, we can an initial resistance around 16200 levels on Nifty.
  3. The heavy results today (note below) can decide the further course of action.
  4. Despite the disappointing resuts of couple of companies in the last week of last month, this week has been interesting and action has been kicking in.
  5. Currently, 15900, which was a heavy resistance turned to key support. Long positions are likely to be intiated by market players with it as Stop Loss.

Global Cues

  1. The US Markets have been sloppy, yet again. They were volitle during the trading session yesterday bull closed on a flat note.
  2. Asian Indices are inching towards new highs. There’s pretty interesting action coming in here.
  3. Delta woes among everything currently is an issue of concern on hand. The coming days and weeks are turning out to be crucial with the way Delta variant is evolving and COVID19 cases slicing up.

Results Today – below are the companies declaring Q1 – 2021-22 results today. 

Godrej Consumer Products | Hind Petro | Titan | Apollo Tyres | SBIN | Bosch Ltd

Scrips in FnO Ban today – SunTV

Source: NSE Website

Disclaimer:

The analyst is not a SEBI RIA. The views expressed by Govardhan are completely to serve educational and learning purposes. Please consult your financial advisor before entering any positions. We, in no way, are responsible for the profits made or losses incurred.

Feel free to buy me a coffee, and check my digital presence!!

Thanks! Have a Good Trading Day!

Market View | August 03, 2021

Welcome, all! Here, we present our market views based on the factors visible in the market, domestically and globally. To begin –

Recap of last trading session (02 August 2021) –

  1. We witnessed a very rangebound session yesterday, until mid-day after the first hour of market bells. Despite the heavy call writing present at 15900, we did march towards it.
  2. Bank Nifty followed the trajectory of Nifty, although the banking space did show quite some strength leaving apart HDFC Bank.

For 3rd August 2021 –

Technical Levels

The detailed technical analysis structure can be viewed here.

Domestic Cues

  1. On the news front, aside the stable numbers of COVID19 and Vaccination Drive, there isn’t much happening which could drive volaitility in markets.
  2. PM Modi launched eRUPI which will integrate the payment interface for various stakeholders in India with the financial institutions and the government. Read more about it here, by Finshots.
  3. There is heavy OI present at upper levels on Index which is causing setback at everytime, trading with caution is necessary. Breaking with volume is a necessity now for an upmove to continue.
  4. Pharma, IT and Energy scrips are dominating.
  5. We’ve been in choppy markets until last Thursday. There seems to be volatility in this series, so stay seated with your seat belts for a bumpy ride.

Global Cues

  1. Stocks initially cheered the announcement on Sunday by US senators of around $1 trillion in proposed infrastructure stimulus.
  2. Although they remained very flat with NASDAQ on rise and DOW on fall at close.
  3. Asian stocks were steady early morning, today, after choppy U.S. equities turning lower.
  4. Treasury yields retreated on concerns that the economic recovery from the pandemic is losing momentum, reported Bloomberg.
  5. Equities edged down in Japan and Australia and rose in South Korea, today morning.

Results Today – below are the companies declaring Q1 – 2021-22 results today.

Dabur India | Tata Consumers | Godrej Properties | Bharti Airtel | Adani Ports | Adani Enterprises

Scrips in FnO Ban today – SunTV

Source: NSE Website

Disclaimer:

The analyst is not a SEBI RIA. The views expressed by Govardhan are completely to serve educational and learning purposes. Please consult your financial advisor before entering any positions. We, in no way, are responsible for the profits made or losses incurred.

Feel free to buy me a coffee, and check my digital presence!!

Thanks! Have a Good Trading Day!

Market View | August 02, 2021

Welcome, all! Here, we present our market views based on the factors visible in the market, domestically and globally. To begin –

Recap of last trading session (30 July 2021) –


1. Last trading session, i.e., on Friday (30 July 2021), we did witness a heavy moment on both sides. We saw that the range broke of 15826 (a solid resistance) broke and shot up in 15 mins towards 15860 levels from where it resisted and fell sharply to 15750 levels.
2. The sharp selling was added with the weak global cues aside from what the technical charts say.

For 02 August 2021 –

Domestic cues –
1. We’re into the first week of the August Expiry Series.
2. After the volatile day, we’re back in range again.