Weak Economic Data Leads to Market Wide Retracement

GB Market Commentary 19/01/2023

by Marcus Sotiriou

Bitcoin stalled at a key resistance of $21,400 and got rejected yesterday, following weak US economic data. This strengthened recession fears in the US, causing the Nasdaq to fall by 1.64% whilst the bond market rallied.

This reaction from global markets could suggest that investors strongly fear a recession, as bad news for the economy led to bad news for markets. If this psychology is sustained, it will be an important regime change, after persistent inflation was the primary driver for asset prices in 2022.

Governments and regulators around the world are progressing their path toward more clarity in the crypto sector. The SEC of Thailand, for example, issued new regulations this week on custodied cryptocurrencies.

The regulator claimed that companies who are offering crypto custody services must “establish a digital wallet management system to accommodate efficient custody of digital assets and keys and ensure safety of clients’ assets.”

Furthermore, South Korea’s financial regulatory is now developing tools that can allow crypto risks to be monitored. They recognised that despite the crypto market’s threat to the traditional financial system being low currently, this could change rapidly over time.

South Korea’s Financial Supervisory Service (FSS) Governor said, “the Financial Supervisory Service is planning various initiatives for the risk management of the virtual asset market this year.”