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Bitcoin Hesitates Whilst US Regulations Progress

GB Market Commentary 17/04/2023

by Marcus Sotiriou

Bitcoin’s momentum has slowed for now at the key resistance level of $30k as mentioned previously. This coincides with optimistic sentiment from investors about a potential alt season over the coming weeks. This is due to Bitcoin’s dominance increasing significantly recently, leaving altcoins behind. In addition, ETH tends to lead the market in terms of weakness and strength, and ETH is currently showing strength as it climbs above the key level of $2,000. Could this be a sign that altcoins are largely lagging and are undervalued?

Some indicators would suggest being cautious of a fakeout, such as altcoin funding turning positive over the past week, signalling an increase in leverage in the market. Altcoin funding remains high and positive despite Bitcoin’s drop today, suggesting altcoins may need a further flush in the short term. Whether an alt season follows a short-term flush or we see heavy drawdown remains to be seen.

US is actually seeing some progress toward providing regulatory clarity, as U.S. House of Representatives are creating a comprehensive regulatory framework for stablecoins, including USDC and Tether.

The House Financial Services Committee has a new panel focused on crypto and digital asset platforms, and released a draft bill on Saturday inn preparation for a hearing this Wednesday on the topic of stablecoins. The bill will be changed as conversation and debate occurs in Washington, but if the current draft became law it would put the Federal Reserve in charge of nonbank stablecoins. This means that the Fed could approve and regulate digital asset platforms like Circle and Tether that issue or plan to issue their own stablecoins in US credit unions.

This appears to be a positive step towards some clarity in the US regarding stablecoin issuers, and much needed after the uncertainty which has ensued in the US market following digital asset platform and BUSD issuer Paxos being sued by the SEC.

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