On Thursday (July 6) in the Asian market, Bitcoin maintained overnight weakness at $30,500. The hawkish voices in the Fed's June FOMC meeting minutes supported the dollar buying and suppressed the crypto market. However, the renminbi plummeted to a 15-year low and faced the risk of losing credibility, stimulating funds to turn to Bitcoin as a safe haven. Twitter, led by Musk, has obtained remittance licenses in three US states, laying the foundation for the prospects of crypto payments. Analysis shows that Bitcoin's path to challenge $32,400 remains unchanged.
RMB plunge: BRICS countries face the risk of losing credibility
The Chinese yuan has been on the receiving end of a bearish mess due to rising inflation and a recession. The value of the yuan has depreciated significantly and is now close to its lowest point in 15 years. The impact of this problem goes beyond China to all other regions and markets that rely on the yuan for transactions and investments.
One such grouping affected by the yuan’s depreciation is the BRICS, an alliance of countries that includes Brazil, Russia, India, China and South Africa aimed at reducing economic dependence on the United States and its dollar currency.
The collapse of the Chinese yuan, which has plunged more than 5% this quarter, will certainly hamper the progress of the BRICS alliance. Although the yuan has become increasingly popular over the years and has become an important part of the country's economy, its depreciation could lead to the collapse of the BRICS alliance and could prevent interested countries from formally joining.
Since then, China has launched a series of interest rate cuts in an effort to stem the country’s economic crisis and potentially revive it. However, recent developments have not been encouraging, leading S&P Global to slash its growth forecast for China from 5.5% to 5.2%.
The Chinese government also reiterated its unwavering support for the yuan, revealing that it is working to contain the current situation and will eventually launch "comprehensive measures to stabilize expectations." While China's assurances boosted investor hopes, Crypto News Flash noted that it did little to protect the BRICS from collapse.
This means that the yuan is now close to a 15-year low after plunging more than 5% in the second quarter of 2023. The BRICS alliance risks losing credibility and may miss the opportunity to bring in new members.
This is a good thing for Bitcoin. As people gradually lose trust in fiat currencies, they will turn more to cryptocurrencies and decentralized financial (DeFi) assets.
Twitter gets money transmission licenses in three US states
According to CryptoSlate, Twitter has obtained money transmission licenses in three states in the United States, according to records from the licensing system databases of multiple states in the United States. These records show that Twitter's application was approved in Michigan, Missouri, and New Hampshire between June 29 and July 3.
Twitter's licenses in Michigan and New Hampshire are referred to by the market as "money transmission licenses," while its license in Missouri is called a "sale checks and money transmission license." However, the difference appears to be due to the way the states name their licenses, rather than any differences in the planned services. Twitter's new money transmitter license will allow it to process customer transactions, likely in a manner similar to PayPal and other non-bank services.
The report mentioned that Musk was reported in January to form a team to explore digital payments, aiming to turn Twitter into an "everything app." Although there is no indication that Twitter plans to launch crypto-related services as part of its payment plan, the site has supported crypto tips since at least February 2022. It includes other crypto features such as non-fungible tokens (NFTs). Despite the various advances made so far, Twitter has not publicly announced any payment services.
Can Bitcoin outperform the “hawkish dollar”?
CoinTelegraph analysis said that Bitcoin bulls were unable to build on the breakthrough of $31,000. This shows that the bears have not given up yet. The 20-day exponential moving average (EMA) of $29,673 is an important level to watch on the downside. If the price rebounds from this level, it will indicate that the bulls are buying on dips.
This will strengthen the prospects of a breakout above the $31,000 to $31,432 area. Bitcoin could move up to $32,400, where the bears are likely to pose a strong challenge again.
This positive view will be negated in the short term if the price turns down and breaks below the 20-day EMA. This could result in a drop to the 50-day simple moving average (SMA) at $27,849.
CMTrade said that Bitcoin mining company Stronghold announced that it had mined about 225 bitcoins in June, plus the bitcoin production in April and May, which is equivalent to more than 626 bitcoins mined in the second quarter of 2023. Earlier news, mining company Stronghold announced that the computing power of its Bitcoin mining business has reached 3.0EH/s.
Judging from the 4-hour chart of Bitcoin, the short-term momentum at high levels is slowly consolidating downward, the short-term market sentiment is gradually emerging, and the short-term decline may continue. The MACD indicator is hovering near the 0 axis, and the RSI indicator is below the 50 balance line.
Resistance: 31139 31542
Support level: 30034 29635
Trading strategy: short at 30707, target 30034 29635
