Daily News | Global Markets Fall Ahead of CPI Data, Crypto Face Uncertainties As SEC Targets Staking, Ethereum Sepolia Test On the Horizon
Crypto Daily Digest: Wall Street Focuses on Interest Rates and Inflation, Crypto Falls After SEC Targets Kraken
Good morning traders! Hope you’re ready for a fantastic Monday. Let’s make the most of this day! 🚀
Stocks in Asia saw a dip at the start of the week following a rough ride for stocks and bonds in the US. Traders are tweaking their interest rate expectations ahead of the US inflation data, due to be released tomorrow. This led to a decline in the S&P 500 and Nasdaq 100, with the S&P 500 down 1.1% and Nasdaq 100 slipping 2.1%. The reason for this was the reassessment of interest-rate expectations, as investors are weighing the possibility of increased borrowing costs in the US.
Interest rates are predicted to reach a peak of 5.2% in July, higher than the previous prediction of less than 5% from a month ago. The US inflation data is expected to show a slowdown in consumer-price gains to 6.2%. This data will give the Federal Open Market Committee (FOMC) the information they need to determine interest rates.
Cryptocurrencies such as Bitcoin (BTC) and Ether (ETH) had a rough week, with Bitcoin falling 7.6% and Ethereum dropping 9%. Despite this, Bitcoin has still seen a 21% increase in the past month. Other cryptocurrencies like Ripple (XRP), Cardano (ADA), and Solana (SOL) faced similar drops in value. The only exception was The Graph‘s GRT token which saw a big 50% boost, and SingularityNET (AGIX) which rose 26%.
The decline in cryptocurrency value was largely due to the US Securities and Exchange Commission’s move against Kraken, causing worries about the future of staking revenue. As a result, crypto stocks like Coinbase (NASDAQ:COIN) and MicroStrategy (NASDAQ:MSTR) faced drops, with Coinbase shares down 22.6% over the week.
Coinbase’s Chief Legal Officer, Paul Grewal, has warned of the potential consequences of misregulation in the crypto industry in a recent blog post. Grewal asserts that staking is not a security and does not meet the criteria of the Howey Test, used by the SEC to determine if an investment contract is a security. Staking rewards are determined by protocol and not the service provider, making staking services IT services, not investment services. Meanwhile, Cathie Wood’s Ark Invest took advantage of the dip by adding Coinbase shares to its portfolio.
Topic of the Day: Last Chance for Staking Providers - Goerli Test Up Next
Ethereum developers have agreed on February 28th as the target date for launching the Sepolia test network (testnet) upgrade. The upgrade, known as the Shanghai upgrade, will allow for withdrawals of staked ether (ETH) on the Ethereum blockchain. Sepolia is a closed testnet for Ethereum developers only and is the second test network to undergo the upgrade. The first was the Zhejiang testnet, which ran a successful simulation of staked ETH withdrawals earlier this week.
After the Sepolia testnet is completed, the final testnet, Goerli, will receive the Shanghai upgrade. Goerli is the largest public Ethereum testnet and will be the last chance for staking providers to test staked ETH withdrawals before the upgrade goes live on the main Ethereum blockchain.
The Shanghai upgrade is a hard fork for Ethereum and marks the first such upgrade since the Merge in September, which switched Ethereum‘s consensus mechanism from energy-intensive proof-of-work (PoW) to proof-of-stake (PoS). Under PoS, ETH is staked on the blockchain as a way of validating and securing transactions. The different testnets are differentiated by the number of participants and network load, with Zhejiang being a public testnet open to anyone, including staking providers, to practice staked ETH withdrawals.
Ether (ETH) $1,512.32 (-0.21%) - Neutral Outlook
Overview:
- Closest Daily support zone: 1,515 - 1,505
- Closest Daily resistance zone: 1,535 - 1,545
- Key Level: 1,429 (Monthly High of Jan. 2018)
ETH has fallen 6.2% since last Monday, caused by macro disinflationary concerns and the SEC’s recent hawkish moves again crypto firms. Since Friday, ETH had found support above the 1505 - 1515 range which was a previous demand zone spotted on Oct. 27, and had seen retests during the move up in mid-Jan. Based on the Volume Profile indicator, if ETH breaks 1470 then the next volume spike should be around 1430. Likewise, the resistance zone with the highest volume is between 1565 - 1585. By measuring the move up in January with the Fibonacci Retracement tool, the golden ratio (61.8%) can be found near the 1425 - 1370 area, implying where traders will be looking to purchase at discounted value.
Daily Resistance zones
- 1,535 - 1,545
- 1,550 - 1,565
- 1,600 - 1,620
Daily Support zones
- 1,515 - 1,505
- 1,482 - 1,469
- 1,430 - 1,389
