Crypto newsletter: Bitcoin bulls are fighting for control

• The ECB calls for global Bitcoin regulation
• Whales continued to buy more Ethereum despite the recent sell-off
• Fed's focuses CBDC's and stablecoin regulation

The cryptocurrency market is in the middle of a recovery phase following Monday's downslide. The total market value has crossed the $1 trillion mark, again confirming the bulls' return. Average daily trading volume is registered at $150.0 billion. Bitcoin's market dominance decreased to 67.4%.  The past week has already seen a very good performance of altcoins, and some of them posted double-digit gains. When it comes to major coins, Bitcoin failed to break above the $40,000 today and correction appeared, sending it back to the support at $38,000. Ethereum returned above $1,200 but does not seem to have the momentum to break above $1,300. Meanwhile, Ripple is still unable to break above $0.3, with $0.29 providing immediate support.

ECB’s Lagarde calls Bitcoin a speculative asset

ECB President Christine Lagarde during her speech at the Reuters Online event on Wednesday called for strict regulation of the cryptocurrency market as she thinks Bitcoin is a speculative asset. She also said that a digital euro will be implemented  in nearly five years. Meanwhile the major cryptocurrency is trying to stay above at $38,000. This comes after BTC suffered rejection at $40,000 earlier in the day. As long as price sits above the 50 SMA (green line) a move toward recent records looks probable. However, the Relative Strength Index highlights that bears have more influence, at least for now. If a break below the aforementioned 50 SMA occurs, then support at $35,000 may be at risk.

Bitcoin, H4 interval Source: xStation5

Also an on-chain metric SOPR is exceptionally overbought, which indicates that Bitcoin may suffer a mid-term pullback or enter a consolidation period. Source: Glassnode

Ethereum returned above $1200

Ethereum price jumped to $1,348 on January 10 before a market sell-off that took the second most popular coin down to $910. However, the bulls took advantage of this opportunity and quickly pushed the price above the $1200 level.  Also the number of large holders, so-called whales which own between 100,000 to 1,000,000 coins ($120,000,000 to $1,200,000,000) increased since the beginning of the month. This may be a sign that big players are accumulating Ethereum, hoping for further price increases in the near future.

Ethereum price managed to erase most of the recent losses and is trading above the major $1200 level. If the current sentiment prevails, the attack on the resistance at $1348 looks to be a possible near-term scenario. However if sellers will manage to break below the 50 SMA (green line), then another downward impulse could be launched. Nearest support lies at $1100 level. Source: xStation5

Ripple plans to bring XRP ledger to central banks

FED Chairman Jerome Powell, said yesterday that the ongoing work regarding stablecoins is of "very high priority". Moreover, the institution has been working on "better regulatory answers for potential global stablecoins particular." Powell pointed to risks associated with the central bank digital currencies (CBDC's) and stablecoins which need to be mitigated. The Fed is working together with other central banks because it is aware that stablecoins could become significant overnight, and it must be ready as a regulator. When it comes to CBDC, FED is "determined to do this right rather than quickly, and it will take some time — measured in years rather than months."

Meanwhile Ripple is pressing forward to bring the XRP Ledger to central banks despite the ongoing lawsuit. According to Ripple, banks can issue stablecoins on XRPL due to its "unique, fungible token functionality called Issued Currencies." Ripple added that: "Issued Currencies is designed to be the ideal stablecoin platform, providing simple but rich management functionality for the issuer that makes it easy to create, issue, and manage any asset – including stablecoins."

Ripple failed to break above the major resistance at $0.30 which coincides with 50 SMA. Currently price is testing upward trendline. Break below would be a signal for deeper downward move. In such a scenario, the first key support can be found at $0.25. Source: xStation5