Bitcoin and Ether chart points; China focus; Fed official on stablecoins
Limited drivers put charts/technicals in greater focus for major crypto tokens
China officials acknowledge stresses imposed by covid-related lockdowns
Fed Vice Chair steps up criticism of stablecoins after TerraUSD/LUNA collapse
Major crypto assets continue to consolidate as the sideways trading pattern has now extended to two full weeks. That has placed some greater emphasis on the chart/technical picture.
Bitcoin (BTC) has breached support at $28,500 established by the series of lows since May 14. A sustained break would open scope back towards the spike low of $25,300 reached on May 12. The cluster of highs between $30,700 and $31,300 since May 14 to present look to be short-term resistance. Ether (ETH) has also breached short-term support at $1,900 today, putting it in closer proximity to its May 12 low of $1,700.
With crypto-specific drivers in short-supply, we continue to look at the macro backdrop to anticipate potential catalysts for crypto prices.
China activity remains pressured by covid lockdowns
China developments have been mixed, at best, as it continues to deal with the current wave of covid infections and the economic fallout stemming from widescale lockdowns. Officials have recently taken steps to lower interest rates and support prices/activity in the property sector. However, that will take time to work its way through the broader economy and further action—both monetary and fiscal—is still expected.
China officials suggest more will be done to support growth
Overnight, Premier Li (second in command to President Xi) said China is committed to striking a balance between supporting the economy and containing covid outbreaks, according to an article in today’s Wall Street Journal. The article suggests some divergence between Li’s more constructive attempts to revive growth, and President Xi’s stricter guidelines around zero-covid enforcement.
In either case, developments in the world’s second largest economy and a leading participant in the crypto and tech space remain important for crypto market participants to monitor. In that regard, next week’s release of China’s Purchasing Managers Indexes for May will be a useful indicator on the economy’s performance and trajectory.
Fed’s Brainard testifies on digital currencies
On the regulatory front, Federal Reserve Vice Chair Brainard is due to testify before a Congressional panel today. In the text of her opening statement (already posted on the Fed’s website), she noted that stablecoins do not share the same protections as fiat money, adding that they can lose their “promised value” which could harm consumers or, “at large scale, creating broader financial stability risks.”
The TerraUSD/LUNA collapse puts stablecoins in regulators crosshairs
To be sure, the recent collapse of TerraUSD/LUNA has put the issues of stable coins very much in the crosshairs of regulators and government officials. It would seem that the issue is not whether that event will spur new regulation and oversight in the space, but the form and speed with which that occurs. Note that there will be additional comments from both Brainard and Congressional members when the House Committee on Financial Services convenes its hearing later today.
Original source: www.einpresswire.com/sources/u466736
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