Daily News | Crypto Markets Steady Amid SEC Proposal and US Regulation Crackdowns; Global Markets Uneasy Over US Debt Ceiling and Inflation
Crypto Daily Digest: Crypto Markets Steady as SEC Proposal Criticized; Jane Street and Jump Crypto Reduce US Trading Amid Crackdowns, Companies Seek Overseas Hubs
The cryptocurrency market remained relatively stable as of Wednesday morning, with Bitcoin (BTC) trading at around $27,750. Investors were awaiting the US inflation report for clues about the Federal Reserve’s policy at its next meeting. Meanwhile, the US Securities and Exchange Commission (SEC) proposed a new rule that would require investment firms to store all their clients’ assets, including cryptocurrencies, with approved custodians. This proposal has faced criticism from the crypto and traditional financial industries, who argue that the “sweeping changes” could threaten smaller investment advisers and that the rule is an example of jurisdictional overreach.
Regulatory crackdowns have caused major market-making firms, Jane Street Group and Jump Crypto, to scale back their crypto trading operations in the US. The collapse of high-profile firms and projects, including FTX and TerraUSD stablecoin, has intensified scrutiny of the digital asset industry.
Meanwhile, other companies have been looking towards financial hubs overseas, such as Hong Kong, Singapore, and Dubai. However, the Chief utive of the Monetary Authority in Hong Kong, Eddie Yue, emphasized that despite the city’s efforts to establish itself as a digital asset hub, the regulatory regime for crypto companies would be “tight.”
Hong Kong will start a licensing regime for virtual asset service providers on 1 June, and retail investors will be allowed to trade major tokens such as Bitcoin and Ether. Yue assured that Hong Kong’s crypto guardrails had been lowered to a “reasonable and sustainable level,” but the city would not tolerate any FTX-type event in the future.
Ether (ETH) $1851 (+0.21%) - Neutral Outlook
After a markdown on April 26th, there was a buying climax area observed between 1954-1964, followed by a downward automatic rally to the Ice zone (1829-1786), which has been a crucial demand zone until recently. Moving forward, if the volume increases on lower timeframes, especially the 15-minute chart, it is likely that ETH will rapidly move up towards the target range of 1920-1938, followed by another accumulative phase before the buying climax area (1954-1964) is retested. Smart money may aim for a maximum profit potential within the range of 2005-2030. However, there is also a possibility of a bear trap resulting in another drawdown to a range of 1823-1814 before the price ascends.
Overview:
- Closest hourly support zone: 1842 - 1835
- Closest hourly resistance zone: 1858 - 1866
- Key Level: 1918 (Monthly Close of Mar. 2021)
Hourly Resistance zones
- 1858 - 1866
- 1868 - 1877
- 1885 - 1900
Hourly Support zones
- 1842 - 1835
- 1828 - 1811
- 1807 - 1785
Macro: Tension in Global Markets Over US Debt Ceiling and Inflation Concerns
Global markets are feeling the pressure as investors weigh the impact of a possible US default and await a crucial inflation report. US equities fell ahead of the report, and the debt ceiling deadlock has weighed on investor sentiment. The S&P 500 fell 0.5%, with PayPal being the worst performer, while the Nasdaq 100 slid 0.7%. Traders are balancing the possible end of the Federal Reserve’s interest rate hikes with the prospect of an economic slowdown.
The impasse over the US debt ceiling is a matter of concern for investors, and efforts are being made in Washington to find a deal. President Biden has met with House Speaker McCarthy to resolve the issue, but there has been no significant progress so far. The stock market remains in a narrow trading range, with the S&P 500 trading between 3,800 and 4,200 this year.
In Asia, benchmark indexes in Japan, South Korea, and Australia have fallen, while futures for Hong Kong stocks indicated a slight gain. Asian equities opened slightly lower on Wednesday as investors await a critical inflation report and are concerned about the US debt ceiling impasse. The S&P 500 and Nasdaq 100 were fractionally higher in Asia after falling on Tuesday.
The intensified negotiations could at least temporarily assuage markets before June 1, when the US risks exhausting its ability to meet all payment obligations. Economists say a breach of the debt ceiling would rattle markets, increase lending costs, and lead to the loss of hundreds of thousands of jobs.
Investors are closely monitoring the US inflation report, which is expected to show headline CPI rose by 5% in April. The US gauges have been stuck in narrow trading ranges as investors weigh the potential end of the Federal Reserve’s interest rate hikes against the possibility of an economic slowdown. The report is due later on Wednesday.
The pressure is on President Biden and congressional Republicans to find a way to avert a possible US default. While they have promised negotiations on spending that would open the door to a potential agreement, they have not made much progress so far. Congressional aides and presidential staff will start budget discussions in the coming hours.
