Daily News | BTC Faces Regulatory Challenges, SEC Compares Market to 1920s; Tech Stocks Drive Bullish Market, Fed Policy Reevaluated

Crypto Daily Digest: Bitcoin Faces Regulatory Challenges as SEC Chair Compares Crypto Market to 1920s Stock Market

The path to breaking above the $27,500 level seems arduous for Bitcoin, despite its resilient recovery from the $25,500 support. Investor concerns have heightened due to regulatory scrutiny and lawsuits targeting major exchanges like Coinbase and Binance. The U.S. Securities and Exchange Commission (SEC) has been taking decisive enforcement actions against cryptocurrency-related activities, potentially attempting to rectify its previous regulatory oversights. Additionally, fears of an impending global recession are dampening the prospects of risk-on assets, including cryptocurrencies, and recent negative macroeconomic data, such as China’s import decline and Japan’s GDP contraction, contribute to the prevailing pessimism.

Renowned billionaire investor Ray Dalio has further added to the apprehension by warning of high inflation and excessive debt in the United States. These concerns are amplified by the urgent need for the U.S. government to raise funds after hitting the debt ceiling. The European Central Bank’s ability to combat inflation is also hindered by the eurozone’s entry into a recession, as revealed by revised estimates from Eurostat.

Bitcoin’s derivatives markets reflect a bearish outlook, with professional traders positioned for a low probability of the BTC price surpassing $27,500. Instead, a retest of the $25,500 support level appears more likely.

However, amidst the SEC’s recent lawsuits against Binance and Coinbase, crypto investors found a glimmer of hope in positive job data from the United States. The unexpected rise in initial jobless claims suggests a potential loosening of the labor market. This development could prompt the U.S. central bank to halt its ongoing streak of interest rate hikes, a move that could prove beneficial for asset prices.

While the SEC’s announcements have sparked concerns within the crypto industry, market sentiment, as indicated by the Fear and Greed index, remains neutral. The lack of significant price action suggests that investors are relatively unmoved by the regulatory developments. However, data from Glassnode reveals a shift in Bitcoin trading volume from the United States to Asian markets, potentially influenced by the SEC’s regulatory stance.

In a speech at the Piper Sandler Global Exchange & Fintech Conference, SEC Chair Gary Gensler drew parallels between the current crypto market and the stock market of the 1920s. Gensler characterized the crypto market as rife with scams, fraudsters, and Ponzi schemes. He advocated for the application of securities laws to the crypto market, emphasizing the importance of compliance and separating exchange, broker-dealer, and clearing functions. Gensler argued that these measures, akin to the regulations imposed on the stock market in the 1930s, are necessary to address the existing problems in the crypto space. Critics, however, accuse Gensler of adopting an overly expansive regulatory approach that stifles innovation within the U.S. crypto industry.

Bitcoin (BTC) $26,450 (-0.2%) - Neutral Outlook

Over the past 24 hours, there has been limited activity and a noticeable decrease in trading volume for BTC. This suggests that investors are adopting a cautious approach and refraining from making significant moves while awaiting further clarity after the recent major liquidation events that took place in the previous week.

Overview:

• Closest daily support zone: 26380 - 25818
• Closest daily resistance zone: 26700 - 27260
• Key Level: 25243 (Daily 200EMA)

Daily Resistance zones

1. 26700 - 27260
2. 27790 - 28420
3. 29096 - 29885

Dailyy Support zones

1. 26380 - 25818
2. 25360 - 25240
3. 24570 - 24270

Macro: Technology Stocks Drive Bullish Market as Investors Reuate Fed Policy

In a remarkable market surge, technology stocks spearheaded a rally that propelled the S&P 500’s gains past the significant 20% mark, indicating a full-blown bull market. Despite a surge in jobless claims suggesting a cooling labor market, the tech sector received a resounding boost, defying speculation of prolonged higher interest rates by the Federal Reserve.

Investors are now reuating the trajectory of the Fed’s monetary policy following unexpected rate hikes by central banks in Australia and Canada. While traders had fully priced in another hike by July, these unforeseen actions by other central banks have prompted a reassessment. Krishna Guha, an analyst from Evercore ISI, emphasized that market moves based on these central bank actions are likely to fade, as the Fed remains the primary price-setter.

The rally in technology stocks was led by industry giants such as Nvidia Corp. and Advanced Micro Devices Inc., which witnessed substantial gains amid the frenzy surrounding artificial intelligence-linked stocks. The Nasdaq 100 index rose by an impressive 1.3%, complementing the S&P 500’s 0.6% climb. Adobe Inc. also saw a notable increase of 5% as it unveiled plans for a new artificial intelligence subion service that includes copyright services.

In Europe, the Stoxx 600 index remained relatively unchanged, with attention shifting to SBB, a company central to Sweden’s ongoing property crisis. SBB experienced a significant setback as S&P Global Ratings downgraded its ratings, exacerbating the company’s already severe funding crunch. These developments highlight the challenges faced by SBB and the broader property market in Sweden.

Turning to Asian markets, stocks are poised to open higher, drawing on the positive momentum generated by the technology stock rally in the United States. Futures for benchmarks in Australia, Japan, and Hong Kong have advanced, suggesting a second consecutive weekly gain for the regional index. Meanwhile, US stock futures show limited change as the market digests the implications of the recent rate hikes by other central banks.

As markets shift their focus, the spotlight falls on Chinese inflation data, which is anticipated to show minimal change, reinforcing the need for further stimulus. Additionally, Japan’s stronger-than-expected economic growth in the first quarter has bolstered the yen, which held steady in the face of market fluctuations.