BTC’s correction to $22,750 follows negative comments from financial regulators, but key Bitcoin price indicators suggest bulls remain bullish.
the bars are down
the price topped $25,000 on February 21, an annual increase of 53%. At the time, U.S. retail sales figures indicated it was worth $1.5 billion. it made sense to expect the rally to continue after it far outperformed the market consensus last week. This is expected to ease the landing of investors and boost the US economy. failures that could have been avoided.
The success of the US strategy. The Federal Reserve’s top rate would be to raise interest rates and shrink the balance sheet by $9 trillion without doing much damage to the economy. If this miracle happens, the results will benefit risky assets including stocks, commodities and bitcoin.
Unfortunately, the cryptocurrency market took a hit after rejecting the $25,200 level, with the price of Bitcoin dropping 10% between Feb 21 and Feb 24. Regulatory pressure, mainly in the US, partly explains why investors have worsened market conditions.
In a Feb. 23 interview with New York Magazine, Securities and Exchange Commission chairman Gary Gensler said that “anything but Bitcoin” is a potential security tool and falls under the agency’s jurisdiction. However, many lawyers and political analysts said that Gensler’s proposal “is not law”. As such, the SEC had no authority to regulate cryptocurrencies unless it could prove its case in court.
Additionally, at the G20 Summit, the US Treasury Secretary said that Janet Yellen stressed the importance of implementing a strong regulatory framework for cryptocurrencies. Yellen made her comments on February 25 after International Monetary Fund Executive Director Kristalina Georgieva pointed out that “if regulation fails,” an outright boycott “should not be taken off the table.”
Let’s take a look at Bitcoin profitability metrics to better understand how smart investors are positioned in the current market conditions.
The demand for the Asian stablecoin has stagnated
Traders should consider USD Coin
It will be $1
bonus to measure the demand for cryptocurrencies in Asia. The index measures the difference between a peer-to-peer trade-backed stablecoin in China and the US dollar.
Excessive demand for the purchase of cryptocurrencies can affect the fair value index by 104%. On the other hand, the market supply of stablecoins is flooded during market downturns, resulting in rebates of 4% or more.
After rising 4% at the end of January, the USDC payment ratio in Asian markets fell to a moderate 2%. Since then, the ratio has stabilized at a modest 2.5%, which should be interpreted well in light of the recent regulatory FUD.
BTC Futures Bonus Stuck Even After Price Drops To $25,000
Quarterly Bitcoin futures are the preferred commodity of whales and arbitrage bureaus. They can look complicated for brokers due to their settlement date and price differences from the spot market. However, their main advantage is the lack of variable financing rates.
These month-specific contracts are often traded in the spot market at low premiums, indicating that sellers are asking for more money to prevent settlement over longer periods. As a result, futures markets should trade at 5% to 10% per year in a healthy market. This approach, known as contango, is not exclusive to the crypto market.
The chart shows moderate sentiment traders between Feb 19 and Feb 24 as the Bitcoin price held above $23,750. However, the indicator failed to penetrate the neutral to bearish 0% to 5% area as more regulatory uncertainty was added, especially after Gensler’s February 23 comments. As a result, professional traders are clearly concerned that the Bitcoin price has broken above $25,000.
Related: Is SEC Action Against BUSD More About Binance Than Stablecoins?
Poor economic data shifted control to the bulls
Bitcoin’s 4.5% increase in price since Feb. 25 suggests that the impact of the regulatory news was limited. More importantly, global equity markets reacted positively on February 27 after the US Department of Commerce issued a press release. after recording a 4.5% drop in orders for durable goods in January compared to the previous month. The data supports the Fed’s interest rate hike program