The crypto sphere is bound to experience a deeper downturn after reports that the US Securities and Exchange Commission (SEC) has sent Paxos a Wells Notice, claiming that the Binance USD, which is tied to the US Dollar, failed to meet regulatory requirements.
This news comes at a particularly unfortunate time for Bitcoin, as the holiday of love, Valentine’s Day, was expected to bring some much-needed bullish sentiment to the market. However, it seems that this could not be further from the truth.
BUSD stablecoin is not a legally registered security. To make matters worse, the NYDFS has issued an order to Paxos to cease issuing any more of the currency.
The SEC’s action against Paxos has unsurprisingly caused a lot of fear and market volatility, with Bitcoin and major altcoins taking a dive in the market as investors are fearful of more regulatory interference.
Last week’s sanctions on Kraken and Paxos could be causing crypto investors to become uneasy. According to Eleanor Terrett, a FOX Business journalist who tweeted earlier this month that “more Wells notices will be sent out in the succeeding weeks,” uneasiness is only expected to continue rising over the coming days.
In the upcoming days, market watchers may expect to see unsteadiness persist as investors await the consumer price index information that will be revealed on Feb. 14. Interestingly, Bitcoin has registered a golden cross in its day-to-day chart and a death cross on its weekly graph.
Overall Market Analysis
The outlook appears to be bearish in the long term, but a recent upswing may signal an imminent reversal. Bitcoin’s new week candle closed with a bullish engulfing candle pattern, which could be a sign of recovery; however, the current market situation is still highly uncertain.
Bitcoin is consolidating above $21,700, while ETH is trading above the $1,500 support level. Major altcoins such as XRP, BCH, and LTC are also facing some difficult trading conditions, while Cardano and Polkadot have seen major gains over the past few days.
Bitcoin’s technical analysis reveals BTC is trading in a triangle pattern, and there’s no clear indication of where the price will head next. Bullish candlesticks are forming on the 4-hour chart, which could indicate an impending upswing. However, the RSI line is in the negative region, which suggests that there is still a long way to go before the bulls take over.
Ethereum price analysis reveals ETH fell sharply on the opening of today’s trading session, falling to a low of $1,470.02, and has been rising continuously in the last 4 hours.
Despite the overall bearish outlook, ETH is still trading above the $1,500 support level and is likely to remain within this range for some time. Additionally, there’s also a chance that ETH might break out of the triangle pattern in the near future.
Most of the altcoins have shed off most of their January gains, while select altcoins continue to hold above the support levels. Select altcoins like GMX tokens are still in firm bullish action.GMX is up by over 14%, Curve DAO Token is up by 12%, and Fantom gained over 11%, which are the top gainers of the day.
Overall, the cryptocurrency might be at the onset of another bearish period, but the bulls could still make a comeback in the near future. With Valentine’s Day bringing no love to the crypto market, it will be interesting to see how this situation develops over the coming days.
