The European Securities and Markets Authority (ESMA) decided to extend the duration of the introduced restrictions on differential contracts (CFDs), including those based on cryptography. The agency announced its decision in an official edition published today.
CFD is a contract signed between the buyer and the seller, which states that the difference between the current value of assets and their value at the time of signing the contract will be compensated by the seller if he is positive or by the buyer, if negative.
According to the information provided by ESMA, the restrictions that originally came into force on August 1 will be extended for the next three months from 1 November. The agency justified its move "a serious problem of investor protection" related to offering CFD to retail clients.
Before the first restrictions were imposed by ESMA, the leverage limit for cryptocurrency CFDs was 5: 1. Since August, the ratio has been changed to 2: 1, which means that cryptographic investors must have at least half of the contract value at signing.
In January ESMA issued a call for evidence that would indicate a possible interference in digital CFD contracts based on digital currencies. The document states that the volatility of cryptocurrency prices raises doubts as to sufficient investor protection.
Other supervisory authorities of the European Union also treat the crypto assests cautiously. The European Supervisory Authorities (ESA) warned customers in February, that cryptocurrencies are "very risky" resources that show "clear signs of a price bubble".
Different EU countries are looking for approaches to cryptographic derivatives. For example, the French stock regulatory authority called for regulation of cryptographic assets in accordance with EU law and prohibited advertising on the Internet. Austria has also proposed to supervise them using the trading rules already in force in relation to gold. In turn, the UK supervisory body required companies to obtain authorization before dealing with crypto derivatives.
Let's now take a look at the Ethereum technical picture at the H4 time frame. The market is still trading below the black trend line with an overnight lock high at the level of $235. The nearest important support is seen at the level of $206, but the key support zone is located between the level of $199 - $205. On the other hand, the next technical resistance zone is seen between the levels of $245 - $251. Please notice overbought market conditions and neutral momentum might suggest the downtrend resumption might be just around the corner.
