Bitcoin and other cryptocurrencies rose Friday, settling near key levels as the digital asset space reels from a U.S. regulatory crackdown on the two major cryptocurrency exchanges, Binance the major strong cryptocurrency exchange on the planet and Coinbase the cryptocurrency firm which manages one of the main platforms for buying and selling bitcoins and other digital currencies.
Bitcoin’s price has risen less than 1% in the past 24 hours to $26 600, sitting in the middle of a trading range between $26 000 and $27 000 that has mostly dominated since the larger cryptocurrency failed to hold the April peak above $30 000. While Bitcoin fell into the $25,000 zone this week when the Securities and Exchange Commission sued Binance and Coinbase, digital assets have shaken off this threat amid a lack of sellers after a year-long bear market.
Bitcoin may have shown strength by quickly recovering from the USD 25,500 support level on June 6, but that doesn’t mean breaking above USD 27,500 is going to be an easy task.
Investors still expect stricter regulatory scrutiny following the FTX bankruptcy in November 2022, including recent lawsuits against Coinbase and Binance.
In the past six months, U.S. Securities and Exchange Commission (SEC) has taken a total of eight actions related to cryptocurrencies. Some analysts suggest that the SEC is attempting to redeem itself for failing to police the FTX by taking action against the two major exchanges.
Analysts’ Views
Alex Kuptsikevich, an analyst at broker FxPro, said that “Bitcoin trades near $26 500, in the middle of the previous day’s trading range and just above the psychologically important 200-week moving average”; he added, “A break below this level could trigger a deeper drop to $24,500 (previous high) or even $22,200 (50-week moving average).”
Next week looms on the macroeconomic front, with Bitcoin likely to react to a sideways move in the Dow Jones Industrial Average and S&P 500 to U.S. inflation data due on Tuesday, and the Federal Reserve’s latest interest rate decision on Wednesday.
Meanwhile, pressures continue to mount on crypto exchanges charged by the SEC for, among other things, offering unregistered securities in the US.
Mark Palmer an analyst from Berenberg cut his price target on Coinbase shares Thursday while maintaining a Hold rating, though he rated the stock “non-investable” in the middle of significant regulatory overlap. Ratings agency Moody’s on Thursday changed its outlook on Coinbase’s debt, in unique, corporate family rating and senior unsecured secured notes.
Beyond Bitcoin, Ether – the second largest cryptocurrency by market capitalization – gained less than 1% to around $1,850. Smaller cryptocurrencies or altcoins were more mixed, with Cardano crumbling at 4% but Polygon (MATIC) currently ranked among the top 10 cryptocurrencies based on market capitalization and has been in the top 10 for a long period of time, appearing at 2% higher.
On the other hand, memecoins were buoyant, with both Dogecoin based on the depicts a Shiba Inu dog that has as a sole prerogative being a fun alternative to Bitcoin and Shiba Inu or SHIB, a token bringing the power of a decentralized, community-led currency to millions across the globe since its inception in late 2020, were up less than 1%.
By Marina Meza
