Crypto Markets Feb 21 CHK: Bitcoin Continues Striving to Pass 25,000 Amid Macro News Fears

Bitcoin continued to approach $25,000 on February 20 as analysts warned of market manipulation.

Cryptocurrency Market

Market data shows that Bitcoin (BTC) price bounced off the weekly close at $24,265 to once again approach the $25,000 mark.

However, the bulls are still unable to initiate a breakout from this area and the whale activity on exchanges has many analysts questioning the possibility of market manipulation.

In its latest update, Material Indicators revealed that high volume traders are “thinning” resistance, making BTC/USD more likely to move higher.

The co-founder, Keith Alan, is eyeing the liquidity wall of spot prices, which he calls the “Notorious BID”.

“Many rejections from $25,000 correlate perfectly with BTC’s macro TA, which is seen as a good signal to take profits around this area, but Notorious BID is still trying to push the price up. Based on the past and my ability to overcome illiquidity, I am still scaling long.”

Meanwhile, Material Indicators, said: “From a technical support perspective, this should be a local top, but Notorious BID is still going strong on Binance. They are distributing liquid BTC sell orders outside the $25,000 – $25,500 range into the active trading zone, so resistance is easing.”

The plan among the big traders could be to trigger a strong rally, causing retail investors to rush in or buy, then get stuck as whales sell BTC to the market at higher levels.

Multiple Moving Average (GMMA) – used to identify trends in the market, the first time the short-term moving averages crossed above the long-term moving averages in over a year. This could suggest that the Bitcoin price is likely to grow significantly in the near future.

The US Securities and Exchange Commission (SEC) is preparing to take legal action against Paxos, which issues a stablecoin digital currency. According to CNBC, such a move by the SEC could have major implications for the stablecoin market, with a total capitalization of $137 billion.

The SEC uses a test called Howey to determine whether an asset is a security or an “investment contract.” In this test, there are four criteria that define an asset as an “investment contract,” such as an investor’s expectation of return.

If BUSD is considered a security by the SEC, the agency will have custody of BUSD. Issuers of BUSD will have to register with the SEC and accept closer scrutiny.

Another effect is that other stablecoins are also considered securities.

“The basis for action by the SEC will be the specific facts regarding Paxos’ BUSD coin structure, but a move by the SEC would have broad implications for other stablecoin issuers in the US,” said Townsend Lansing. CoinShares Product Manager – told CNBC.

Analysts pose a number of different scenarios. The viability of these scenarios depends on what charges the SEC brings against Paxos and how the two sides act.

“I believe it is highly likely that the SEC will reach an agreement with Paxos, in which Paxos recognizes BUSD as a security, forcing other stablecoins to do the same and register with the SEC,” Mariotti said.

“Another possibility is that Paxos is firmly against the SEC, but the cost of doing so would be enormous. Litigation will last for years and the possibility of losing is also high. In addition, Paxos going against the SEC poses risks and could make BUSD less attractive to the market,” said Mariotti.

Altcoins rallied after Bitcoin continued to approach the $25,000 region throughout yesterday.

The most prominent is the layer-1 blockchain platform that combines POS and POW, Conflux (CFX), when this project increased by more than 60% within 24 hours, bringing the total growth momentum in the past 7 days to 580. %.

Conflux Network, also known as Shanghai Tree-Graph Blockchain Research Institute, is the only public, regulatory-compliant open blockchain in China.

CFX, the project’s token, is emerging as one of the best performing crypto assets in 2023 as China seems to be starting to take an interest in crypto trading.

Following CFX is Neo (NEO), also a Chinese-made blockchain, which has jumped 37% on the day and 72% in the past week.

Other projects such as Huobi Token (HT), Bitcoin Cash (BCH), Bitcoin SV (BSV), GateToken (GT), eCash (XEC), Cronos (CRO), Helium (HNT)… also increased from 8-18% .

Ethereum (ETH) is also attempting to flip the $1,700 zone to support yesterday. After hitting a local bottom at $1,673, the market leader altcoin bounced more than 2% and is currently trading around $1,710.

Macro factors

Global stock markets gained slightly in trading on Monday (February 20), when the US market closed, reducing the volatility of other markets. Investors are waiting for the minutes of the most recent meeting of the US Federal Reserve (Fed), after recent “hot” inflation data reinforced the possibility that the Fed will raise interest rates to higher levels in the near future. longer time.

The US financial market did not trade at the beginning of the week for Presidents’ Day, so many non-US assets were also “rested” after being under continuous selling pressure last week. As a result, the MSCI All-World index of global stocks rose 0.2%; Europe’s Stoxx 600 index rose 0.1%.

In the first six trading weeks of this year, both stock and bond prices in the US surged. But recently, the rally seems to have reversed, after a flurry of data from the US showed the world’s largest economy held up much better than expected – meaning the Fed will have to maintain its policy stance. currency longer to bring inflation under control.

“Until recently, the market debate has focused on the topic of soft landing or hard landing, no recession or recession. But now investors have to think about a completely different scenario where the economy doesn’t land,” Kingswood chief economist Rupert Thompson told Reuters.

“The new idea of ​​a no-landing economy is not very good for the stock market, because eventually there will be a hard landing or a soft landing, but the landing date will be pushed to the second half. of this year. And the risk of a recession at that point is now becoming more apparent, ”Mr. Thompson said.

Until recently, Wall Street investors ignored the warnings of monetary policymakers that inflation remained too high and persistent. Now, they are beginning to accept the fact that they may have been overly optimistic in their expectations for inflation and interest rates.

This investor awakening is reflected in the interest rate futures market. Interest rate futures now suggest that the average Fed rate bets through July of this year will peak at around 5.3%, and by December, the Fed could cut rates by 0.25 percentage points. hundred. Before that, the top rate bet was 5%, and the first rate cut would follow shortly after.

“It is probably too early to believe that a recession will not happen. Until it stops raising rates, the Fed will increase by a total of more than 5 percentage points over a year. The effect of tight monetary policy on the real economy can have a lag, even up to 1-2 years,” said JPMorgan Chase’s head of global and European equity strategy, Mr. Mislave Matejka, told Reuters. “The damage is already seen, but the real impact is still ahead.”

S&P 500 and Nasdaq futures are down slightly, with losses ranging from 0.2-0.3%. On Friday, the S&P 500 fell to a two-week low.

“We are in the most aggressive Fed monetary tightening cycle in decades, with US retail sales hitting record highs, unemployment at a 43-year low, new job January is over 500,000, and the CPI/PPI are both accelerating. All show that the Fed’s anti-inflation mission is unfinished,” a Bank of America report said.

On Wednesday, markets will receive minutes from the Fed’s February meeting to better understand the monetary policy considerations of the world’s most powerful central bank officials. However, this minutes may have less impact than usual, as the February meeting comes after the release of the January jobs and retail sales report.

In addition, the market will receive the core personal consumption expenditures (PCE) price index report – the Fed’s preferred inflation measure – on Friday. Core PCE is forecast to increase by 0.4% in January, the strongest increase in 5 months, although full PCE decelerates to 4.3%.

On track to complete its biggest monthly gain since September of last year, the dollar depreciated slightly in the first session of the week, reflecting the easing of investor risk aversion. The Dollar Index, which measures the dollar’s strength against a basket of six other major currencies, fluctuated around 103.9 points, slightly down from last week’s close. In the past 1 month, the index has increased by more than 1.9% – according to data from MarketWatch.

Brent crude futures in London rose nearly 1% to nearly $84 a barrel, after falling nearly 4% last week.