Bitcoin is trying to halt declines at $21,500 today after a US inflation reading showed an unsatisfactorily low rate of decline, and Bloomberg reports indicated that the SEC also intends to regulate financial institutions engaging in the crypto market
- CPI inflation came in 0.2% above expectations and only 0.1% below the previous reading. Core inflation also missed expectations by 0.2% and fell 0.1% from the December reading. Investors are concerned that this situation will tighten the Fed's stance. If the next reading shows that inflation is beginning to stabilize at current levels the Fed would have to take firmer steps not ruling out a 50bp hike;
- Cryptocurrencies as risk assets came under pressure and failed to sustain the gains from the initial reaction to the data. Among the smaller projects, Phantom and the trend-related AI, Graph, performed best. However, the mood is being weighed down by weakness in Bitcoin and Ethereum.
- According to Bloomberg agency sources, the U.S. Securities and Exchange Commission will make it harder for U.S. institutional investors to get involved in the cryptocurrency market. The SEC is expected to propose rule changes that will make it harder for private equity firms, hedge funds and pension funds to work with cryptocurrency market players.
- The regulator is expected to make it more difficult to achieve 'qualified custodian' status and hold client assets for money managers, Bloomberg reported. The U.S. regulator has recently increased its involvement over the crypto market, hitting Paxos, the BUSD stablecoin issuer for the Binance exchange, yesterday.
Bitcoin chart, M30 interval versus Nasdaq100 contracts (US100, gold chart). Recently, the price dived below the 200-session average (red line) for the first time since early January, signaling weakness. A potential zone to test in the medium term could turn out to be $20,000, if bears dominate the indexes with which Bitcoin correlates. Source: xStation
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