He cryptocurrency marketIt is down today, following a big drop in the risky asset class after US Federal Reserve Chairman Jerome Powell made alarming comments about interest rates and high inflation.
The bitcoin price is currently trading below $22,000, which is a concerning level for traders who think that a drop below that level would result in a trend reversal to $19,000. Ether, which is currently trading at $1,555 and has a crucial support level of $1450, it is also causing similar concerns.
On the last day, 37,374 investors were liquidated, totaling $87.6 million in liquidations. The largest single liquidation order occurred in OKX, with a value of $923.27K for ETH-USDT-SWAP.
What you should know: He cryptocurrency market it is not immune to volatility. Substantial price changes are often seen prior to the release of major economic data and the Federal Reserve's statement on monetary policy and interest rate hikes.
Furthermore, the Mt. Gox scandal, which will result in the release of 142,000 BTC this year, also affects market sentiment. The Ethereum Shanghai upgrade, which has been postponed until early April, is another major bias. As a result, there will be increased selling pressure because validators can now withdraw staked ETH from the Beacon Chain. Investors predict the market will factor in the impact through a pre-sell-off, noting that the market is "likely" to do so.
In addition, Silvergate Bank, one of the two main banks serving the crypto industry, has problems (the other is Signature Bank). Silvergate Bank recently reported a $1 billion loss for the fourth quarter of 2022 and disclosed a regulatory investigation by the Department of Justice.
The ongoing SEC crackdown on centralized staking, along with subsequent enforcement actions against Paxos and Binance, have also prevented the emergence of long-term bullish momentum across the market. While some decentralized staking systems could benefit from the latest enforcement action, the regulatory climate for cryptocurrencies is still unclear and market volatility is often caused by uncertainty.
In case you missed it: A few weeks ago, the United States SEC began the latest wave of regulatory action by targeting Kraken's profit program. The SEC accused Kraken of โfailing to register the offer and sale of its crypto asset staking platform as a service,โ which the agency said it characterized as a sale of securities, according to the $30 million settlement statement. Kraken also agreed to stop running the Earn program in addition to paying the fines.
In response to the enforcement action, Nexo has also decided to discontinue its centralized staking program. While others claim the staking ban is another blow to cryptocurrencies, Brian Armstrong, CEO of Coinbase, vowed to challenge the decision in court. Although not all SEC commissioners supported the enforcement action against Kraken, the organization announced new crackdowns due to this election.
Some crypto investors are predicting more selloffs, while Bitcoin analysts continue to issue warning statements about the continuation of the long-term decline. Below $20,000 bitcoin is a future CME "gap," with some traders predicting that the flagship cryptocurrency's price will return to this level at some point in the future.
Investors' risk appetite is likely to remain low in the meantime, so would-be cryptocurrency traders may want to wait until there are signs of US inflation A more open regulatory roadmap for business of cryptocurrencies would also help boost confidence in the area.
