COULD CHINA LEAD CRYPTO HIGHER?

Happy Saturday, fellow crypto aficionados!

Picture this: China, the land of the Great Wall and pandas 🐼, re-entering the crypto space.

I know what you're thinking - China and crypto go together like oil and water - I must be dreaming 😴.

But it's now a strong possibility. And one that we need to pay attention to 🕵️.

So, let's analyse the true signal from this week and...

• Recognise - China gives go-ahead for Hong Kong to reintroduce crypto
• Respond - Support and resistance levels: are they useful or not 📈?
• Research - New ATH for tokenised Real-World Assets 👉 new crypto to watch

RECOGNISE - CHINA GIVES GO-AHEAD FOR HONG KONG TO REINTRODUCE CRYPTO

BTC was on the move last week.

Unfortunately, it was in the wrong direction!

The world's leading crypto continued its fall from its local high of $31,000 and, at the time of me writing this, is potentially on its way to secure its fourth consecutive bearish week 😮‍💨 (yet to be decided).

BUT fear not!

Although crypto markets continue to be plagued by uncertainty over whether the U.S. will default on it's debts (the deadline for which is June 1st) - it wasn't all bad news.

The key piece of news - which you may or may not have missed (as it was released very quietly) - was that China confirmed that Hong Kong retail investors would soon be allow to trade crypto!

And to top it off, the announcement was made on Chinese national television 😲!

Yes, China - the country that has been trying to ban cryptocurrencies since 2013.

So according to reports, starting from June 1st, 2023, Hong Kong retail investors will be able to trade major cryptocurrencies under new regulations.

Which cryptos? Well, we don't know yet.

We can speculate and say that BTC and ETH are very likely. As for other LARGE cryptos - who knows. There will be no s**tcoins 🐸, that's for sure!

But this news is huge. How huge? Well, in 2022, China's economy was the second largest in the world sitting at 18.3 trillion. That's trillion - with a T 🤑!...

And according to CZ, the CEO of Binance, Chinese citizens were losing their minds when the news was announced.

I guess after a real estate crash last year, it's understandable 🏠.

Many might be looking for alternative ways to shelter funds - and what better way than with cryptos like Bitcoin and Ethereum!

So, we can at least look forward to a river of new volume as Hong Kong enters the space.

But more importantly, if this is the first step for China re-entering the fold, the amount of trading volume to come could be more like a tsunami 🌊.

Now, before rounding out this section, let's take a quick look at the technicals on BTC.

After briefly pushing up to retest the resistance zone surrounding $27,000, the price of Bitcoin fell back to record a 3-month daily low at $26,300.

However, once again, prices were stopped in their tracks by the 200-week moving average.

While the 200-week MA is holding - for now - and there are speculations that a bullish RSI divergence is forming on the daily time frame - I'm still expecting the possibility of more downside heading into next week.

My brain is still telling me that we need a retest of the $22,000 - $25,000 range 🧠.

But my heart wants the US default saga to be over so that BTC can fire back above $31,000 🧡!

Let's see which one wins out.

RESPOND - SUPPORT AND RESISTANCE LEVELS: ARE THEY USEFUL OR NOT 📈?

When I first started learning about price charts, support and resistance levels were one of the first things that caught my attention.

I think it will likely be the same for many.

There are not many charts that don't have these lines drawn on to them that price miraculously seems to rebound from.

However, there is a HUGE problem with them - they are extremely subjective.

While every guru on the internet tells you that it's easy to place these straight horizontal lines on a price chart - I'm here to tell you that it's not.

You could give the same price chart to 50 people and each person would draw support and resistance lines in different places.

It has taken me nearly 5 years to use them effectively.

Are they useful? Yes, I think they are.

But only when you use them in a certain way.

So, here are 3 tips to help you draw support and resistance levels on your price charts.

Tip #1: Draw support and resistance lines on either the daily or weekly time frame. Even if you are trading on a lower time frame, support and resistance lines drawn on the daily and weekly time frames carry far more weight - meaning price is more likely to react from them.

Tip #2: Look for as many 'touch points' as possible. For any line on a chart you want a minimum of 3 touches to validate that a line can actually be drawn. So, on the daily or weekly time frame, look for areas where the high/low close of a candlestick or the wicks of the candlesticks align.

Tip #3: Think of support and resistance levels as zones rather than lines. This one was a game-changer for me. Nearly all traders and investors will have support and resistance zones on their charts. AND, as they are subjective trading indicator, all of those levels will be slightly different. Therefore, if you think about all of those horizontal lines stacked on top of one another you get a zone. You don't know where price will react from inside the zone, but you know that the zone is important.

And there you have it. Hopefully, a few tips for when you next draw some support and resistance lines onto your price charts.

Remember, even though I now like support and resistance levels, I would never bet the house on one alone.

They need to be used in conjunction with other technical analysis tools.

And that needs to be used in conjunction with a wealth of fundamental insights 🤓.

RESEARCH - THE FUTURE OF CRYPTO - TOKENIZED REAL-WORLD ASSETS 👉 NEW CRYPTO TO WATCH

There was a new all-time high last week in crypto 🙌.

And it may have flown under your radar.

The market cap of tokenized stocks and bonds reached a new all-time high of $225 million.

The market cap of what now?...

Well, these are stocks and bonds that have been tokenized and traded on the blockchain.

This process is better known as the tokenization of real-world assets (RWAs) - and it's a growing narrative.

Anything from the real-world - stocks, bonds, real estate, gold - can be tokenized and traded on the blockchain.

And if it can be traded on the blockchain it can be leveraged within the realm of DeFi.

It is an increasing movement that has caught the attention of financial institutions the world over.

Even BlackRock's CEO, Larry Fink (the crypto hater 🙄), believes that the tokenization of all assets is coming - and quickly. With instant settlement, reduced fees, and simple integration it's easy to see why.

So, with the above in mind, I've been on the lookout for cryptocurrencies that are set to benefit.

And one that has caught my attention is Centrifuge.

Now, this is a protocol, rather than a piece of underlying infrastructure (which is what I prefer).

But as there aren't infrastructure plays that truly target RWAs, DeFi applications are where I looked instead.

Centrifuge has the ability to fully collateralise real-world assets on the blockchain including invoices, mortgages, and micro lending.

They've already been used by MakerDAO to onboard $220 million of RWAs to the blockchain and has an existing partnership with the Aave lending protocol.

For those that may not know, MakerDAO is the creator of the stablecoin DAI and has become the largest holder of RWAs in the industry.

Finally, over the past couple of months the TVL locked within the protocol has been on a steady increase - with now over $200 million of RWAs locked in.

So, as one of the very few projects offering a gateway for RWAs to move on-chain, Centrifuge is definitely one I'm adding to my watch list 📝.

And that brings us to the end of this week's newsletter!

Quite a week! Let's be honest, it's never a quiet one when it comes to crypto.

As always, thank you so much for subscribing, and if you ever have any thoughts or suggestions for the newsletter, ping me an email or a message on socials any time 🙌.

Have a great weekend and I'll see you for the next one.

James

CEO & Founder of Access All Crypto

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