Good morning to all crypto enthusiasts! Today we’ll discuss the recent stabilization of Bitcoin and other cryptocurrencies after a Wednesday afternoon dip, as well as the potential impact of increasing regulatory scrutiny in the US.
Bitcoin regained the $25,000 mark after a late Wednesday dip, driven primarily by fears surrounding the possibility of central bank hawkishness in the coming months. Recently, BTC was traded at around $25,171, off by 3.1% over the past four hours, showcasing a broader crypto selloff. For much of the past five days, the largest cryptocurrency by market value had been hovering just below $26,000 as markets awaited the latest interest rate decision from the US central bank. This decision was accompanied by continued discussions regarding last week’s US Securities and Exchange lawsuits against premier crypto exchanges such as Binance and Coinbase.
While the Federal Reserve chose to suspend rate hikes for the time being, comments from Chair Jerome Powell seem to have spooked the markets. Powell reiterated the Fed’s commitment to reducing annual inflation to a targeted 2.5%, but critics argue that this focus on price stability could lead to an economic recession. As equity markets closed an underwhelming trading day, digital assets took a nosedive with Ether dropping to $1,630.
Among other significant cryptocurrencies, XRP recently traded at just over 48 cents, marking a 6.4% decline over the past 24 hours. Despite the plunge, some experts are not convinced that this downward movement signals a long-term trend. Ruslan Lienkha, Chief of Markets at YouHodler, wrote in an email that “a few hundred million dollars can move the market for a few percent. So let’s see the following days if it is really a downward trend or just a single whale sell-off.”
On the regulatory side of things, recent turmoil in the crypto markets has not moved large Bitcoin holders to reduce their holdings. Glassnode’s data reveals that unique addresses holding between 100-1,000 BTC have increased their holdings since the announcement of the US SEC lawsuits against Binance and Coinbase. Similarly, those with holdings between 10 and 100 BTC exhibited the same behavior, although wallets holding more than 1,000 BTC remained relatively flat.
While not necessarily a bullish signal, this data suggests that large bitcoin investors are content to sit on their positions for the time being. However, we must keep in mind that certainty can be rare in the crypto market, especially when facing potential regulatory changes and economic shifts.
To conclude, despite market fluctuations and the possibility of increased regulatory scrutiny, large Bitcoin holders appear to be holding their ground. In these uncertain times, market participants must remain vigilant and adaptable, as even more unpredictable movements with Bitcoin and other related assets may be on the horizon.
Source: Coindesk
