AI Summary
Show More
Quickly grasp the article's content and gauge market sentiment in just 30 seconds!
On Wednesday, the broader crypto market experienced a surge after U.S. President Joe Biden signed the executive order on digital asset regulation. Unfortunately, this long-awaited rally after nearly a week of bad news and disappointing price actions was a short-lived one. In the early Asian trading hours on Thursday, the broader market once again found itself submerged in a sea of red after having most of the gains it made in the past 24 hours eaten away. BTC posted up a 5% loss in a mere matter of hours, plunging the number one cryptocurrency by market cap below the $40k psychological barrier. It is currently (as of the time of writing) trading above the $39k support zone, where a dip below said level could potentially trigger a further downside correction to the $37k level. While recent regulatory developments did seem to have a positive sway on BTC's price movements (albeit a momentary one), certain technical indicators do suggest that a bearish triangle is taking shape on BTC's daily chart, with the upper and lower bounds near the $45k and $36k levels respectively. Until a clean breakout from these triangles is observed, BTC's price movement in the interim is very much shrouded in uncertainty.
Similarly, ETH has retraced back to the $2,500 level, shedding 4.3% of its market value from 24 hours ago in the process. Most major altcoins are also down 4% on average, with former top-performing L1 tokens like AVAX leading the altcoin downside correction. Finally, said regulatory-driven rally on Wednesday was also barely observable within the derivatives market. Amidst said rally, the 3-month annualized futures basis continued to fall, revealing a rather distinct separation between price action and derivative speculation.
U.S. President Biden has finally signed the long-awaited executive order on digital assets regulation in the U.S. government's efforts to coordinate its basket of crypto-related policies. The stated purposes of the order are to seek out ways to mitigate the risks to both individual consumers and the broader financial system, while also preventing crypto from being misused for criminal activities. In short, the order sets the tone for comprehensive regulatory directives that the crypto industry has been anticipating (and fearing) for a while now. Whilst many industry actors have embraced the order with brimming optimism that it will pave the way for clearer guidelines and fairer approaches with regard to the regulation of digital assets, others have also expressed their fears that the order is too focused on cementing the U.S. government's centralized influence on CBDCs instead of providing concrete actionable plans that will help in the regulation of digital assets.