Central Bank-Backed Cryptos Return To Center Stage
CBDCs Are a Thing Again, Mastercard Wants a Piece of the Crypto Pie
by Bogdan Giulvezan
A while back, some central banks, including the European Central Bank appeared to be very interested in the idea of CBDCs – Central Bank Digital Currencies. The interest in CBDCs remained high but they somewhat disappeared from the spotlight, although governments continued their development. Now once again, CBDCs are a hot subject and apparently, Mastercard is lending a hand for their development.
Central Bank Digital Currencies are digital versions of fiat currencies such as the Euro, US Dollar, Yen, etc. (similar to USD Tether in some ways) but of course, they are backed by the respective government and thus are not decentralized. But even now, for us regular people, fiat currency is mostly just a number stored on a plastic card, in a bank account, and it wouldn’t make much difference if our central bank used CBDC or fiat because the process for the user would be the same: buy groceries – swipe card – take groceries home. And apparently, Mastercard wants to help streamline this process.
In its most recent earnings call, Mastercard announced that it is helping several central banks with the development of these CBDCs. Michael Miebach (Mastercard CEO) informed investors that several partnerships are in place and that the company is exploring the implementation of smart contract technology for the growth of CBDCs.
Meantime, Bitcoin is showing signs of recovery, but it is still trading below the resistance at $55,000 and below the 50 days Moving Average, while Ethereum is trading at $2,768, inches away from its most recent All-Time High at $2,796. Doge is holding on to its recent gains, stabilizing around the $0.30 mark, while Ripple’s XRP has added more than 43% over the last 7 days, currently trading at $1.51.
Chart Analysis – ETH/USD
The pair recently broke the previous peak reached mid-April and situated around $2,500, as Ethereum gained more than 27% over the last 7 days, making it the only top crypto to break its All-Time High this week. The uptrend is in full force, with good support at $2,500 and immediate resistance at $2,800, followed by the crucial level at $3,000.
The bullish price action is likely to continue but it’s important to acknowledge the bearish signs as well: the last closed candle is a Doji (wicks on both sides, small body), which is a sign that upwards momentum may be fading and on top of that, the Relative Strength Index is approaching overbought and is already showing bearish divergence. This type of divergence occurs in an uptrend when price is making higher highs but an oscillator (in this case the RSI) is making lower highs.
With that in mind, it’s safe to assume that a pullback will happen sooner rather than later but the exact time cannot be determined with accuracy, and given the volatility of the crypto market in general, it’s possible to see a move into $3,000 before the said pullback occurs.
