- Unhashed Newsletter
- Posts
- Stablecoin regulation bill incoming
Stablecoin regulation bill incoming
Reading time: 5 minutes
Bitcoin faces stiff resistance as bid liquidity gathers near the $60,000 mark
Key points:
Bitcoin's overall trading environment seems to be cooling down.
Fed's decision to delay rate cuts may impact Bitcoin's inflation hedge narrative.
News - Bitcoin is caught in a tug-of-war between buyers and sellers, with bulls attempting to regain momentum after a recent price drop. Data from CoinGlass showed bid liquidity increasing near the $60,000 mark, suggesting potential buying pressure.
This comes after a significant liquidation of long positions (bets on price increase) earlier this week, pushing BTC to around $63,000. Analysts like Keith Alan, co-founder of Material Indicators, believe an increase in bids could be a precursor to a price rally. Historically, such a scenario has worked in favour of bulls.
What about the funding rate? After weeks of positive rates favouring short positions (bets on price decrease), a return to negative funding has been observed for the first time since October 2023. This suggests a potential return of bearish sentiment among short-term traders. However, analysts like Daan Crypto Trades believe this negativity is likely temporary.
Meanwhile, Federal Reserve Chair Jerome Powell has indicated that interest rate cuts may not happen anytime soon, thanks to the unsatisfactory inflation rate. Following this announcement, investors' sentiment has turned further negative.
US Senators Lummis and Gillibrand propose a Stablecoin regulation bill
Key points:
The Senators emphasized the bill's role in meeting the evolving needs of the financial industry.
The bill proposes a ban on algorithmic Stablecoins.
News - US Senators Cynthia Lummis and Kirsten Gillibrand have joined forces to introduce a new bill specifically targeting the regulation of Stablecoins within the US crypto market.
Stablecoins are cryptocurrencies designed to maintain a steady value by being backed by other assets, typically traditional currencies like the US dollar.
The proposed legislation outlines reserve and operational requirements for issuers of Stablecoins used for payments. These issuers would be required to establish dedicated subsidiaries solely for issuing Stablecoins and ensure their tokens are fully backed by dollar reserves.
What’s more? To further safeguard consumer interests, the bill proposes a ban on algorithmic Stablecoins, which attempt to maintain value through complex formulas rather than relying on collateral. This approach is seen as riskier compared to asset-backed Stablecoins.
According to Senator Gillibrand, this regulatory framework is crucial for preserving the US dollar's dominance in the global financial landscape. She emphasized that the bill prioritizes consumer protection through measures like mandatory one-to-one reserves, anti-money laundering compliance, and adherence to US sanctions.
Cardano's network activity increases despite long-term holders' inactivity
Key points:
Cardano's long-term holders are not selling their ADA tokens.
The RSI suggested indecision in the market, with neither buyers nor sellers firmly in control.
News - Cardano's ADA token is presenting conflicting signals to investors, with long-term holders keeping their assets locked away and the price struggling to break past the $0.50 resistance level.
An analysis by AMBCrypto revealed a rise in Cardano's Mean Dollar Invested Age (MDIA), a metric indicating how long the average investor has held their ADA tokens. A higher MDIA suggested long-term investors are holding onto their tokens, potentially limiting circulation and hindering price increases. Historically, a decrease in MDIA has coincided with increased network activity and rising prices for ADA.
However, another metric, the Mean Coin Age (MCA), tells a slightly different story. The MCA reflects the average age of coins currently in circulation. A rising MCA suggested a movement of older coins, which has historically correlated with price drops for Cardano.
What’s the conclusion? This conflicting data creates uncertainty for ADA's short-term price movement. While long-term investor confidence might be holding steady, the price remains stuck below $0.50. If the MDIA continues to rise and the MCA follows suit, ADA could see a decline even beyond the current support level of $0.49.
Telegram founder Pavel Durov proposes crypto-inspired hardware for privacy
Key points:
Telegram founder Pavel Durov proposed crypto-inspired hardware for secure communication.
This aligned with Telegram's recent integration of Toncoin cryptocurrency for payments.
News - Pavel Durov, the founder of privacy-focused messaging app Telegram, is proposing a new frontier in secure communication: hardware inspired by cryptocurrency wallets. This idea comes after Durov's own experiences with government surveillance in both the US and Russia.
Durov, who left Russia in 2014 due to clashes with the government, has faced unsettling encounters in the US as well. He claims the FBI repeatedly questioned and followed him, even interrupting his breakfast. Durov believes the FBI's objective was to gain influence over Telegram.
Cryptocurrency hardware wallets - He is looking towards technology for solutions. He sees similarities between secure communication devices and cryptocurrency hardware wallets, which grant users complete control over their digital assets. Likewise, these communication devices would allow users to send messages and make calls without fear of interception.
This vision aligns with Telegram's recent foray into crypto integration. The platform recently introduced payments using Toncoin, the native cryptocurrency of the Toncoin blockchain.
More stories from the crypto ecosystem
Did you know?
Bitcoin Cash offers faster transaction processing by allowing for larger blocks. Its block size limit is a whopping 32MB, compared to Bitcoin's 1MB limit.
Once a year, Ethereum gathers the global blockchain community at Devcon - a conference where developers, researchers, and enthusiasts come together to explore Ethereum's advancements and chart its future course.
Polkadot, a brainchild of Ethereum co-founder Gavin Wood, breaks down barriers between blockchains. This multi-chain platform allows different blockchains to communicate and work together seamlessly.
Top 3 coins of the day
Uniswap (UNI)
Key points:
Uniswap sees soaring volume despite regulatory scrutiny.
It has been facing bearish pressure after 7 March.
What you should know - UNI, at press time, was trading around $6.92, reflecting a significant decline of 36.39% over the past week. The 1-day chart suggested a falling wedge pattern, which could indicate a trend reversal in the near future. However, the low RSI of 26 at press time pointed towards oversold territory. This, combined with the falling wedge, suggests a possible bounce back for UNI. Support appears to be around $5, while resistance sits at $11. Regulatory developments surrounding the DeFi space could introduce additional volatility in the short term.
Filecoin (FIL)
Key points:
At press time, FIL was close to losing its $5 psychological support level.
Open Interest, of late, has fallen dramatically - from $380 million to $176 million.
What you should know - Filecoin has been on a downward spiral, plunging from $11 on 9 March to $5.87 at press time. This translates to a hefty loss of over 46%. The price sits precariously close to the lower Bollinger Band, an indicator that often suggests oversold conditions. The overall chart movement on the 1-day timeframe paints a bleak picture, hinting at a bearish short-term trend. Traders should watch for potential signs of a reversal, but should also be cautious as the current trend suggests continued downside pressure in the near-term.
Fantom (FTM)
Key points:
FTM was 80.73% down from its all-time high (ATH).
However, it was up 305.36% from its cycle low of $0.165.
What you should know - Fantom, at press time, was trading at $0.6723, hovering slightly above its support level of $0.6037. This suggests a possible short-term bullish trend, especially considering the 1.59% price increase over the past day. However, it's important to note that this change is relatively small. For a more confident bullish outlook, we would have to look for FTM to decisively break above the resistance level of $1 and see sustained trading above it. Well, the MACD line was skewed towards the sellers’ side. Hence, a recovery in the short term might not be feasible.
How was today's newsletter? |