Bitcoin bulls remain in charge even in the face of increasing regulatory FUD

Mar 17, 2023 | wjb news

The price of bitcoin rose by $25000 on Feb. 21, up 53% so far this year. At that time, after the consensus that US retail sales data were much higher than the sales market the previous week, it was not unreasonable to expect the increase to continue. This intensifies investors' chances of a soft landing for the US economy and is likely to prevent decline.

There is no doubt that the pinnacle of the Federal Reserve's development strategy is to raise interest rates and reduce the balance sheet by $9 trillion without causing serious harm to the economy. If such a miracle happens, the conclusion will benefit risky assets, including individual stocks, commodity spot and BTC.

Unfortunately, after the rejection of the $25200 level, the cryptocurrency market was hit hard, with the price of bitcoin plummeting 10 per cent between February 21 and February 24. It mainly comes from the work pressure of strict supervision in the United States, which to a certain extent expounds the reasons for the aggravation of investors to the current situation of the market.

In an interview with the New York City Magazine on February 23rd, Gary Gensler, the current chairman of the Securities and Exchange Commission (Securities And Exchange Commission), declared that everything except the BTC would become a safety appliance that falls under the agency's jurisdiction. However, a number of lawyers and current policy professionals commented that Gensler's views were "inconsistent with laws and regulations." As a result, the SEC has no right to control the cryptocurrency unless it proves its reasons in court.

In addition, at the G20 meeting, U.S. Treasury Secretary Emily Yellen elaborated on the need for a strong regulatory framework for cryptocurrencies. Before Ms Yellen made the comments on February 25th, IMF chief Christia Georgiyeva stressed that such sweeping restrictions "should not be lifted"if controls are not successful".

Let's take a look at the index values of BTC derivatives in order to better understand the accurate positioning of technical professional traders in the current market conditions.

The steady money supply in Asia has stalled.

Traders should measure the need for cryptocurrencies in Asia with reference to USDC premiums. The index consideration refers to the difference between the stable trading of individuals in our country and the US dollar.

Demand for excessive cryptocurrency purchases may drive investment real estate with this index above 104%. On the other hand, Stablecoin's market offer was swallowed up when it was bullish on the sales market, resulting in a discount of 4% or more.

After peaking at 4 per cent at the end of January, USDC's premium index in Asia has fallen to a neutral level of 2 per cent. Since then, the indicator has been maintained at an appropriate premium of 2.5 per cent, taking full account of recent regulators' FUD, which needs to be seen as proactive.

BTC's futures trading premium remained consistent even after the $25000 price was rejected.

Bitcoin Q1 futures are the best choice for dolphins and hedging arbitrage units. Because of their settlement dates and their price ratios to the spot market, they are likely to look cumbersome to investor traders. However, their most obvious advantage is that they do not fluctuate financing rates up and down.

The trading price of such fixed-month contracts is generally slightly higher than in the spot market, indicating that merchants require a large number of assets to ensure that liquidation is delayed for a longer period of time. Therefore, the annualized interest rate premium of the futures market in the education market needs to be between 5% and 10%. Such things are called futures trading premiums and are not unique to the login password market.

The chart shows that traders showed neutrality during the period from Feb. 19 to Feb. 24, as the price of Bitcoin remained above $23750. However, with the increase in additional strict regulatory uncertainty, this indicator cannot reach neutral to bullish areas of 0% to 5%, especially after Gensler's speech on February 23. In conclusion, it is clear that technical professional traders are anxious to increase the price of the special coin by $25000.

About: our countryIs SEC's behavior against the dollar more about Binance than stablecoins?

Weak economic indicators transfer control to double heads

The price of bitcoin has risen 4.5% since Feb. 25, suggesting that the impact of regulating the news reporting process is limited. More crucially, the global stock market index responded proactively on February 27 after the US Department of Commerce announced that durable goods orders fell 4.5 per cent in January from a month earlier. The data added to the pressure on the Fed to lower interest rate hikes earlier than expected.

Because the 50-day correlation between BTC and s & p 500 futures is currently 83%, cryptocurrency traders prefer to apply risky asset prices higher this week. A value higher than 70% of the correlation index indicates that these property trends are synchronized, which means that macroeconomic policy scenarios are likely to play a leading role in determining overall trends.

Unless you have additional work pressure from regulators or conflicting economic indicators, there is a good chance that BTC will take bitcoin futures and Asian stable index values into account.