Market is expecting rate increase and price are going down. Trade after FEDs don’t take any big position!
BTC didn’t move a lot and consolidating in range of 22.300-22.500$. Next move will show where market will go under 22k or back above 23k. Still possible fake out to 23k and back to 21k range. Take shorts in range close to 23k and long at 21.700$.
ETH didn’t move a lot consolidating at 1560$ range and still show no power for recovery. We could see retest of support at 1460$ range and then bounce up. Trade with small leverage.
XRP bonce from support 0.365$ and show some strength. Need big push up to gain 0.4$. Still big sell off XRP is still on.
LINK now 7$ support act as resistance and retest of 6.45$ is just matter of time. Still not looking good for next leg up.
SOL drop to 20$ support and now holds above. Slowly coming to my short target of 17$. Trade with small leverage. Still show no strength for next leg up.
DXY drop under 104.6 and show weakness. Only big push up will give strength to 105.
Crypto/stock daily news:
BIG NEWS UPDATE
5 MAJOR HEADWINDS IN CRYPTO
Crypto is battling a 5-headed monster right now. Each one of those “heads” represents a narrative that could affect the industry in the near term.
Today, we’re gonna give you a quick rundown of each narrative and why people are so worried.
Let’s get into it…
1. Mt. Gox Repayments
What’s happening: Mt. Gox is set to return 142,000 BTC back to its creditors. That’s ~$3B+ worth of tokens set to return to the crypto market.
Mt. Gox was a Japanese crypto exchange that handled over 70% of all Bitcoin trading at its peak. Then, customer funds got hacked and it was forced to file for bankruptcy back in 2014.
After a long legal journey, Mt. Gox creditors will start getting repaid on March 10th.
Why people are worried: It’s a red pill vs. blue pill moment for Mt. Gox creditors.
Red pill: Sell for a big profit. When Mt. Gox went down, BTC was worth ~$600. Today, BTC is ~$22.5k (a 37.5x increase).
Many people fear creditors could be tempted to sell, lowering the BTC price.
Blue Pill: HODL. Mt. Gox customers have been waiting 8+ YEARS to get their funds back, so some people might just keep on holding.
We aren’t too worried about this because…
Crypto investment funds have bought many creditor’s claims. Investment funds are more likely to hold onto the BTC because their returns won’t be as juicy (they bought creditor claims closer to the current market value of BTC).
There won’t be any second order effects from Mt. Gox creditors selling. This isn’t an FTX or 3 Arrows Capital contagion situation. Mt. Gox creditors are insulated to Mt. Gox creditors.
2. Ethereum’s Shanghai Upgrade
What’s happening: Ethereum’s next big upgrade (Shanghai) is scheduled for later in April. This means stakers will finally be able to unstake their ETH.
Why people are worried: There is currently 17.5M ETH staked, worth ~$27B at today’s prices. That’s a lot of stakes.
Many think that the Shanghai upgrade could lead to a big sell-off, as some people have been waiting as long as 2 years to access their staked ETH.
We aren’t too worried because only ~16% of ETH stakers are in profit positions. That means that most people are underwater on their investments since they first staked their ETH.
If most people are in the red on their investments, will they be rushing to sell? Unlikely.
3. Silvergate Goes Down in Flames
What’s happening: One of the largest crypto banks, Silvergate, is on fire. (and not in a good way).
Turns out, everything is not fine…
Told investors it needs to delay the filing of its annual financial report
Revealed a ~$1B loss for Q4
Major customers like Coinbase, Galaxy Digital, Gemini, Circle, Crypto.com, and Paxos have cut ties with the bank
Why people are worried: Silvergate was a major “bridge” for crypto. It set up the “Silvergate Exchange Network” (SEN) – a network that enabled institutional investors to move fiat to digital currency exchanges and trading partners 24/7 in real-time, at no extra cost.
The crypto bank had ~1,600 clients that handled ~80% of all funds that flowed into and out of the crypto markets. Now…
🎵Silvergate is falling down,
falling down, falling down.
This is… sh*tty.🎵
The companies connected with Silvergates are the big dogs of crypto:
USDC ($43B market cap)
Coinbase (largest exchange in the U.S.)
Tether (largest stablecoin in the world)
and many others
Now, they’ve all cut ties with Silvergate and will need to find new banks to help with on-ramping & off-ramping client funds.
Plus, banks might second guess getting into business with crypto companies after what’s happened with FTX, Celsius, etc. Too many stinky farts and people leave the room.
4. Macroeconomic Outlook
What’s happening: Last week, CPI (Core Price Inflation) and PCE (Personal Consumption Expenditures) data came in above expectations. This means…
People are still spending money
Inflation is not going down fast enough
Why people are worried: That means the Fed’s interest rate hikes are not working as quickly as intended, and they may have to increase interest rates again.
We’re a little worried about this because the possibility of additional rate hikes continues to increase.
And higher interest rates are a bad thing for growth stocks and crypto.
Why? Higher interest rates make it more expensive to borrow money to invest into speculative assets like crypto.
Also, government bonds end up paying a higher “risk-free” yield, which makes crypto look worse by comparison. Are you as likely to dump your net worth into Dogecoin when US Treasuries are paying 6% yields? Probably not.
Even so, we aren’t pushing the panic button just yet. Things tend to change fast, and next week we will get a new jobs report and a Jerome Powell speech. We’ll know more about the Fed’s thinking and strategy then.
What’s happening: Regulators around the world are cracking down on crypto. The SEC, NYDFS, CFTC, etc., all came after crypto last month.
Krakens staking service was shut down (they were also fined $30M)
Paxos was forced to shut down its issuance of BUSD tokens (the 3rd largest stablecoin)
Binance.US is being probed for operating an “unregistered security exchange”
February is now FEDruary.
Why people are worried: Unnecessary and uneducated regulation will stifle innovation and handcuff projects and investors.
When the top players in the space are forced to pay 8 figure fines, withdraw from markets, and suspend projects, it’ll cause companies and VCs to invest less money into crypto and/or flee the U.S markets entirely.
We need regulation and clear rules to invest in digital assets, but Gary Gensler and the rest of the SEC are stricter than my 5th grade hall monitors.
If the regulators make it their mission to kill crypto, it could get ugly out there. Out of all the threats on the list, this is our biggest worry.
We aren’t hitting the panic button on everything yet though. We think a few events like Mt Gox & Ethereum’s Shanghai upgrade are just noise & won’t actually affect price in the near term. But, investors should keep a close eye on some of the others like the Silvergate fallout and future regulatory crackdowns.
And of course, keep your eyes peeled on emails from Milk Road – we’ll always give you the rundown on the latest news & what regulators do next. Stay thirsty, my friends.
I write about 5 dangers in crypto space and that is what we can expect for this and next months to bring price down. Please be on watch it can explode any moment.
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Sentiment Is now BULLISH and real test for bulls are this week.
Not Financial Advice!
Good luck with trades!