Bitcoin in Stage 2 (Patreon)

BTC during the Easter long weekend broke out of pennant pattern and now trading above 30k. ETH followed suit but is underperforming BTC and not yet reached 2000. 

There were positive contributions coming from Hong Kong. 

What happened?

This is the week of the Web3 Festival in HK, the largest web3 and crypto event in HK. Someone counted that there’s over 100 side events for this week alone, which means that there are at least tens of thousands of mainly Chinese web3 and crypto professionals arriving in HK to participate. The speakers at the conference include the Financial Secretary, as well as regulators like SFC and HKMA, and plus crypto founders such as CZ and others. This is a stark contrast to what’s happening in the US. 

And leading up to this week, the Financial Secretary doubled down on his promise to make Hong Kong into a leading crypto hub in the world by reiterating his commitment in his weekly blog. Much are repeats of what was said before; but the most interesting piece is the screencap below which shows that Beijing’s liaison office is also participating on the government’s two day-digital economy summit post the Financial Secretary’s comments. This is a significant nod of approval from Beijing, which has been so far silent on speaking directly about crypto.

What happened in China?

All the sudden, all major Chinese apps are starting to display crypto prices natively within the apps. Now this may not seem like a big deal to the casual observer, but given the intense online firewall in China, what the government allow and does not allow to be seen do send a very strong signal. The screenshots below are from Baidu (Chinese Google), Weibo (Chinese Twitter), and Douyin (Tiktok).

And from data tracking common searches, it seems like many netizens also had the same question which is “is China officially recognizing crypto again?”

Before we get too excited, we need to consider history. For those who don’t know - China actually has flip flopped on crypto multiple times before.

In May of 2013, China’s state-owned CCTV did a documentary on digital currencies and lauding it’s technical ability to replace paper money. This fuelled a major bull market that peaked around Nov/Dec 2013, when China realized that there was way too much speculation in the market and went ahead and clamped down on crypto trading. Again in 2017, China companies were major beneficiaries of the ICO mania until the government once again decided to ban ICO. In the following years, China banned crypto mining and eventually crypto exchanges from operating on the mainland. 

On the fundamental side, the pace of regulatory change is shifting for the better but still happening very very slowly. On the technical side, BTC seems to have entered Stan Weinstein's stage 2. This could be the beginning of more trading opportunities in crypto.

Events to look out for, the Shanghai upgrade for ETH is likely to be this week. Similar to the merge, there are theories about what could happen to price, but honestly no one knows. Most likely it will be a non-event from a price action perspective but worth to keep track just in case.