What’s new in the crypto market over the past 24 hours? We list the main events in the world as briefly as possible.
U.S. macroeconomic problems hit crypto
Three macroeconomic reasons continue to create chronic uncertainty in the cryptocurrency market:
- The intrigue with the interest rate hike. This is an extremely important indicator for the entire market, not just crypto. It is not yet clear what will happen with this Fed rate; there are conflicting opinions. For example, today members of the Federal Reserve questioned the relevance of the 2% inflation target, which theoretically makes it possible to stop the rate hike.
- The situation with the U.S. government debt is even more uncertain, where a sharp political conflict between Republicans and Democrats is preventing an increase in the debt ceiling, which could theoretically lead to a U.S. default.
- U.S. institutions are getting rid of cryptocurrency because of aggressive regulatory pressure. Kathy Wood, founder of investment firm ARK Invest, said today that “Bitcoin is losing strength” in the U.S. because of government actions,” adding further stress to the market.
As an example of the severity of the crisis, one of the real candidates for the chair of the future U.S. president, Donald Trump, openly calls for a U.S. default to stop the rampant growth of his country’s spending, which he compares to a “drunken sailor.”
Crypto Market Situation
On Thursday, BTC was sinking to the level of $26,084, almost crossing the mark of $25k. Nevertheless, Bitcoin broke through the important EMA 100 level, which, according to the technical analysis, shows the downtrend testing. The EMA is used in trading to determine whether the price of a security is going up or down and can help to forecast future price direction.
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The combined pressure of all three above-mentioned negative factors from the U.S. is testing cryptocurrencies for strength, ahead of the denouement of the situation with the national debt and the Fed rate in June.
Known Twitter user @WhalePanda summarizes the “drunken sailor” problem that scares investors to sell BTC:
“This seems like a “You” problem. Idiots dumping Bitcoin because of a country failing.”
Also, we should warn that options expiration happens tomorrow on Friday, which traditionally leads to increased volatility in the market. It is usually advisable to close your positions on such days if you use leverage to trade.
China could launch a bull market
Behind the problems of the U.S., everyone forgot about the other super major player in the world — China. Today, instead of the usual technical analysis, we are guessing at secret signals from the Communist Party of China.
CZ, who is always proving to the U.S. authorities that he is not Chinese, tweeted today that he saw a program about crypto on Chinese Central TV — in his opinion, this is a secret government signal and “it may eventually lead to a bull market.” Despite the somewhat bizarre nature of this statement, we need to explain why this is really important.
The fact is that China is now the largest liquidity provider in the world, and its role in the global economy is a little inferior to that of the U.S. Previously, communist China officially banned crypto on its territory, but recently we have seen many signals that the ban is being unofficially lifted. Much has already been written about Hong Kong’s success, but the showing of educational programs about crypto on China’s super-censored television does suggest a loosening of the ban. Given China’s economic power, there is a real reason for CZ’s bold claim of a coming bull market thanks to China.