FX.co ★ Technical Analysis of ETH/USD for June 7, 2021

Crypto Industry News:

The UK's strict anti-money laundering laws seem to be a major stumbling block for crypto companies in the country.

According to the UK's Financial Conduct Authority (FCA), several crypto companies in the country may be getting ready to go out. In a statement released on Thursday, the regulatory agency revealed:

"A significant number of companies do not meet the required standards under money laundering laws. This has caused an unprecedented number of companies to withdraw their applications."

According to the report, 51 companies have so far failed to meet AML FCA standards and may be forced to stop operating in the country.

By withdrawing their license applications, crypto companies must stop all cryptocurrency services or risk fines and legal action from the FCA. Such companies may only resume operations after meeting FCA's AML protocols. Then they will be entered on the list of registered cryptocurrency companies.

As previously reported in the media, FCA expanded its temporary registration system for crypto companies from July 2021 to March 2022. This nine-month extension is expected to give FCA enough time to clear the backlog of pending license applications.

The FCA has 90 pending enrollment applications and only five duly registered UK crypto companies. Meanwhile, some of the 51 companies that have retired their licensing applications may not be covered by the FCA's AML rules, meaning their actions may not result in a forced closure.

Companies that fail to meet AML FCA requirements by the end of the enrollment period will also be forced to return all customer deposits.

In January 2020, the FCA became the AML police force for the UK cryptocurrency market, which marked the start of mandatory business registration for cryptocurrency companies in that country.

Technical Market Outlook:

The ETH/USD bounce has bounced from the level of $2,639, which is a local technical support for the price and might be developing a Triangle pattern around the current levels. As long as the price is still under the level of $2,914, the bears are still in full control of the market and the next target for bears is seen at the level of $1,729, $1,633 and $1,544. The nearest technical support is still seen at the level of $2,201.

Weekly Pivot Points:

WR3 - $3,628

WR2 - $3,236

WR1 - $2,995

Weekly Pivot - $2,426

WS1 - $2,383

WS2 - $2,000

WS3 - $1,765

Trading Recommendations:

Ethereum has lost more than 50% of the recent gains from the lows of March 2020 and now is currently in the counter-trend corrective cycle. The next long-term target for bears is seen at the level of $1,728 (61% Fibonacci retracement of the last wave up) and $1,420 ( January 2018 swing high). The up trend is resumed when the level of min. $3,000 is clearly violated.