Technical Analysis

Bitcoin retreats for reset | Forexlive


Market picture

Bitcoin has
lost 2% over the past 24 hours, pulling back to $20.77K, almost $1K below
Wednesday’s peak. The first cryptocurrency followed stock indices, which turned
sharply lower on Fed officials’ continued hawkish rhetoric simultaneously with
growing signals of weakness in consumer demand and business activity.

Technical
analysis suggests that the latest pullback is a legitimate correction to the
accumulated short-term overbought conditions after the rally since the
beginning of the year.

The correction can only be reclassified as a new
downturn only after the BTCUSD consolidates below $19.5K, as the 200-day moving
average and the 61.8% Fibonacci retracement level from the rally since the
beginning of the year pass just above that level.

News background

According to
research from infrastructure company Alchemy, Web3 development activity has
increased over the past year, despite the severe challenges faced by the crypto
industry. The number of smart contracts on the Ethereum core network deployed
during the fourth quarter of 2022 increased by 453% to 4.6 million compared to
the previous quarter.

According to
the latest report from consulting firm Cornerstone Research, the US Securities
and Exchange Commission (SEC) will continue to increase pressure on the cryptocurrency
market, including through lawsuits.

Last year, the SEC imposed a record number
of enforcement actions against the industry, bringing 24 cases in US federal
courts and six administrative proceedings.

Experts at
the Bank for International Settlements (BIS) have proposed three main options
for regulating the cryptocurrency industry. These include banning certain
cryptocurrency transactions, isolating the industry from traditional finance
and the real economy, and regulating cryptocurrencies like traditional markets.

The collapse
of FTX was the first in a “long line” of collapses of unregulated
cryptocurrency exchanges, said investor and star of the TV show Shark Tank
Kevin O’Leary. He said all unregulated exchanges now face a massive outflow of
customer funds. The refusal of some accounting firms to work with
cryptocurrencies is also telling.

This article was written by FxPro’s Senior Market Analyst Alex
Kuptsikevich.

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