It was a day of stability in the cryptocurrency market as the fallout from yesterday’s sanction action by the SEC against Kraken.
The growth of the ecosystem can be inhibited
The decision will hinder ecosystem growth by limiting the amount of interaction US crypto holders have with centralized platforms, but this could be a good thing for decentralized finance (DeFi) because hodlers are now more likely to use options available in DeFi, out of reach of US regulators.
Data provided by TradingView shows that Bitcoin (BTC) bulls were able to fend off the onslaught of bears trying to get one more foot in the top cryptocurrency, stopping the decline at $21,530 and pushing BTC above the $21,600 support on Friday afternoon.
‘The price uptrend on the daily bar chart has failed and the bulls have lost their short-term technical advantage,’ according to technical analyst Jim Wyckoff, ‘The bears are now gaining momentum on their side.’
The head of research gave his opinion
Markus Thielen, head of research at Matrixport, offered insight on how to play out the SEC-inspired dip, saying in the latest issue of the Matrix on Target newsletter, “At this point, we’re proposing to sell the $19,000 Bitcoin strike put. The deadline is March.’ “The last time Bitcoin broke $20,000 financially, it was during the FTX boom and would potentially take a similar risk-taking event to break the downside, so breaking $19,000 seems relatively unlikely,” Thielen wrote.
As for the sideways price action seen in Bitcoin over the past few weeks, Thielen noted that ‘Bitcoin tends to move very quickly with gains of 4,000 points’ and that ‘when Bitcoin retests and successfully crosses the resistance at $24,000, the price could potentially climb to $28,000.
Rising inflation in 2022 and central bankers’ decisions have negatively impacted the crypto market, but ‘the opposite is happening’ so far in 2023, the researcher said. ‘That’s why most people missed this strong rally this year.’ Shortly after the minutes of the mid-December FOMC meeting were released on January 4, Bitcoin entered a rally. The news release emphasized that a similar move was seen on January 12, when Bitcoin rallied after US inflation came in lower than expected.
“When we map out all the central bank events (meetings and minutes) as well as the release dates of the CPI data, we see that there will be many catalysts for the Bitcoin rally to continue in the first half of 2023,” Thielen said. Based on the ‘January effect’, Bitcoin could reach $45,000 by the end of the year.’ said.
Prominent cryptocurrencies in the red sea
The altcoin market has been hit hard by the SEC-inspired pullback as traders entering the market during the recent surge in prices have exited the phase in the past 24 hours to await calmer market conditions.
As always, many more, including a 55.6% increase for SCALE (SKL), a 20.75% increase for MobileCoin (MOB), and a 12.62% increase for Syscoin (SYS). The token managed to reverse the downtrend to post double-digit gains. According to Kriptokoin.com data, the overall cryptocurrency market cap is currently $1,014 trillion and Bitcoin’s dominance rate is 41.1%.
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