Daily News | Credit Suisse Sparks Global Market Volatility, TrueUSD Shifts Reserves to Bahamas Amid US Banking Woes
Crypto Daily Digest: Crisis at Credit Suisse Sparks Global Market Volatility and Fear of Economic Hard Landing
Good morning, traders! Let’s seize this Wednesday relentlessly and make the most of it! 🚀
The global markets have been volatile due to the turmoil at Credit Suisse and the collapse of some American regional banks. This crisis has led to a rush for safety and raised concerns about a harsh economic landing, leading to speculation that central banks may have to curb their hawkishness. The S&P 500 and a gauge of US financial heavyweights such as JPMorgan Chase & Co. and Citigroup Inc. fell but later pared losses.
Bond yields also plunged globally as traders abandoned bets on additional rate hikes and began factoring in cuts by the Federal Reserve. This led to traders being almost evenly split on whether the Federal Reserve will increase interest rates when it meets next week. Economists, including Nouriel Roubini, BlackRock Inc.’s Larry Fink, and Bridgewater Associates’ Ray Dalio, have expressed concerns about the banking crisis, with Fink warning of cracks in the financial that could worsen. Chief investment officers have warned of an economic hard landing and an inevitable recession.
However, Lisa Shalett at Morgan Stanley Wealth Management believes the threat to the broader financial industry and economy is contained.
In Asia, stocks are expected to fall following declines in US stocks and a rally in government bonds and the dollar after Credit Suisse Group AG experienced fresh turmoil, raising doubts about whether the Federal Reserve will increase interest rates next week. Equity futures for markets in Japan, Australia, and Hong Kong dropped, and US futures showed signs of stability. The KBW Bank Index, which is one of the broadest measures of the US banking , fell 3.6%, undoing a rally from the prior session.
Bitcoin‘s value also dropped below $24,500 as investors worried about potential banking problems in Europe, particularly with Credit Suisse. The bank’s largest investor, Saudi National Bank, stated that it would not invest any more money beyond the $1.5 billion it invested last year. This news caused Credit Suisse’s shares to plummet, as well as several other European banking stocks. The turmoil in the banking sector caused some investors to become skittish and invest in less risky assets, causing some cryptocurrency prices to drop. The CME FedWatch Tool shows that currently, around 55% of traders believe that the US Federal Reserve will not raise interest rates at its next meeting.
Topic of the Day: TrueUSD Operator Moves $1 Billion in Reserves to Bahamas Amid US Banking Woes
Archblock, the operator of TrueUSD stablecoin, has transferred over $1 billion of its reserves to Capital Union Bank in the Bahamas due to the worsening banking conditions for crypto businesses in the US. This move has increased the company’s funds with the bank to over $1.4 billion from $438 million on 10 March. TrueUSD is a stablecoin that maintains a 1-to-1 value with less volatile assets such as the US dollar.
On the negative side, this move highlights the challenges crypto businesses face in securing banking relationships and their cash reserves, which can create instability and uncertainty for stablecoins such as TUSD that rely on the backing of cash and cash-equivalent assets as collateral. Furthermore, this offshore move could raise concerns among regulators and enforcement authorities about the ability to monitor and regulate these assets, leading to increased regulatory scrutiny and potential limitations on the use and circulation of stablecoins.
On the positive side, the move to a more stable banking partner in the Bahamas could provide greater security and stability for TUSD and TRU, reducing the risk of banking failures and disruptions to the Flow of funds. This could also enhance the credibility and reputation of the TrueFi eco, making it more appealing to investors and users. Additionally, it could potentially create new opportunities for partnerships and collaborations with other crypto businesses and financial institutions based in offshore locations, diversifying the sources of liquidity for TUSD and TRU and allowing greater flexibility in managing their reserves.
In conclusion, the implications of this move by Archblock are likely to be dependent on how it is perceived by investors, regulators, and other stakeholders in the TrueFi eco. While there are potential risks and challenges associated with offshore banking, there are also potential benefits in terms of stability, security, and flexibility that could drive the growth and adoption of TUSD and TRU.
TrueFi (TRU) $0.09657 (-0.09%) - Neutral Outlook
Overview:
- Closest hourly support zone: 0.09657 - 0.09210
- Closest hourly resistance zone: 0.09716 - 0.10031
- Key Level: 0.09210 (Weekly Close of May. 09 - 16, 2022)
Based on the daily timeframe, the falling wedge pattern observed suggests that TRU could either continue its uptrend or at least retest the ascending channel where it was rejected seven times between March 5th and 15th.
However, if TRU breaks below the descending channel, it could likely fall to the monthly level of 0.06610. Looking at the 4-hour timeframe, recent price movements have pushed TRU below a support channel and into the daily golden zone [0.10184 - 0.09646], which also coincides with the daily demand zone [0.10031 - 0.97158] and the monthly level of 0.96566.
If TRU falls below the daily golden zone on the 4-hour timeframe and the weekly level of 0.09210, it could retest the support channel located just below the 4-hour 200EMA [0.08691]. Conversely, if the market conditions change and TRU manages to rebound from its current price level and close above the 4-hour downward Fibonacci golden zone [0.10728 - 0.10496], it would invalidate the short-term bearish trend and may cause TRU to retest the weekly level of 0.12200.
Hourly Resistance zones
- 0.09716 - 0.10031
- 0.10496 - 0.10840
- 0.11704 - 0.12200
Hourly Support zones
- 0.09657 - 0.09210
- 0.08691 - 0.08300
- 0.07967 - 0.07312
