Market Analysis – 18th February 2022 | Bitcoin - Cryptocurrency
Market Analysis – 18th February 2022 | Bitcoin - Cryptocurrency
Today, February 18, 2022 - This week, the U.S. Securities and Exchange Commission (SEC) has struck again, levying a $100 million penalty on BlockFi, a cryptocurrency exchange, and wallet that offers an interest-earning account, portfolio-backed loans, and low-cost trading. The allegation was that BlockFi had failed to register its high-yield interest accounts, which the SEC had deemed to be securities. In addition, BlockFi has also agreed to comply with the Investment Company Act of 1940 within 60 days.
In addition, the SEC has also launched an investigation on Binance.US over concerns that Changpeng Zhao, CEO of Binance, has connections to two companies that are serving as market makers on the exchange. The agency has requested information from Binance.US on the two companies, and their exact working relationship with the exchange at this time.
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Market Analysis – 18th February 2022 | Bitcoin - Cryptocurrency
Next, Binance has announced a new rebrand for the Binance Chain and Binance Smart Chain, as they would now be united under a new name – BNB Chain. The chain will have new functionalities, higher throughput, and a new focus on building Web3.0 infrastructure. Binance Chain will henceforth be known as the BNB Beacon Chain, while Binance Smart Chain will be renamed to BNB Smart Chain, keeping its abbreviation of BSC.
In other news, Mastercard has recently announced that they are expanding their crypto consulting business, with plans to hire 500 more employees for the department. Their roles and responsibilities involve helping banks and merchants with crypto loyalty programs, as well as integrating crypto and NFT into existing business models.
Finally, a piece of news that has shocked the crypto Twitter community: Warren Buffett now has a $1 billion exposure to cryptocurrency through his company’s purchase of Nubank Class A stock. Berkshire Hathaway has sold a portion of its holdings on Visa and Mastercard while increasing its exposure in Nubank. Buffett has previously signalled his distaste of the crypto market, citing Bitcoin as an asset that “does not create anything.”
Bitcoin’s Price Action
If we look at the 1D chart, we can see that a double top has formed in the past week, and the price was rejected at the $44,500 level. The price appears to be trending downwards again to revisit the range low. The current support remains at $42,880 in confluence with the 50EMA line, while the next support level is at $42,100, then $40,600.
High inflation rates appear to be affecting the global economy, and all eyes are on what the Fed will do next month. In the meantime, global unrest continues to be brewing, and the Russia-Ukraine conflict may hurt the stock market. If that happens, the crypto market would most likely be affected too.
If everything goes well, and war does not break out in the imminent days, we may see Bitcoin revisiting its resistance at $46,700. Traders can look for a short then, with a stop loss implemented near $48,000. However, since the market is extremely sensitive to the news at the moment, it may be more prudent to simply sit back and observe first before entering into any new position. Perhaps focus on stacking sats whenever the price of Bitcoin dips to a level that is attractive enough for you, and avoid any leveraged trading.
Notable Pick of the Week
Axie Infinity ($AXS)
Total Supply: 270,000,000 AXS
Circulating Supply: 60,907,500 AXS
Market cap: $3,720,203,740.92 (#41)
Axie Infinity allows players to collect, breed, raise, battle, and trade token-based creatures known as Axies. These Axies can take various forms, and there are more than 500 different body parts available, including aquatic, beast, bird, bug, plant, and reptile parts. Parts from each type class come in four different rarity scales: common, rare, ultra-rare, and legendary — and Axies can have any combination of body parts, making them highly variable and often rare and unique.
$AXS has bounced from its previous support at $50 and is now consolidating between $58 - $70. As one of the most popular Play-to-Earn (P2E) games available in the market, it may be worth holding on to some $AXS for the long term. Traders may wish to accumulate more $AXS at the $50 - $55 level, and wait for a pump that is similar to $SLP’s recent rise.
What do the Technical Indicators Say?
The BTC TradingView indicators (on the 1 day) is indicating Bitcoin as a neutral recommendation. The moving averages are recommending Bitcoin as a buy (similar to last week), while the oscillators are leaning towards neutral (similar to last week).
What will the Future Be?
The market right now is heavily dependent on the actions of the Russian army. If a ceasefire was to occur, the market should rally quickly to previous highs again. However, traders should still take note of the inflationary pressure within the global economy, and look to take profit whenever possible.
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