Bitazza Crypto Weekly: Bitcoin Under Pressure From Regulators Around The World -

Crypto Weekly: 31 January – 6 February 2022

Following the explosive growth of the Crypto industry in 2021, regulators and governing bodies are expected to pay closer attention than ever regarding how digital assets can be used moving forward. The introduction of stricter laws and regulations towards Crypto could hamper the growth of the sector, with projects forced to devote resources towards compliance rather than focusing on technological innovation.

The Biden administration is widely expected to release an executive order on Crypto within the next month that is expected to help outline a comprehensive government-wide strategy towards regulating digital assets. Federal agencies are anticipated to cooperate in evaluating risk and opportunities in the sector to propose clear regulatory guidelines and policies for Crypto. While the US government purportedly has no intention of banning Crypto, they have shown concerns in the past towards some areas such as NFTs and Stablecoins before and could be an area that sees greater regulatory legislation after the executive order.

Interestingly, a bill has been introduced to the Arizona Legislature by Sen. Wendy Rodgers that seeks to make Bitcoin legal tender in the state. It is questionable whether such a law could be successfully passed at the state level, considering that the US Constitution does not allow individual states to create their own legal tender or currencies.

Russian President Vladimir Putin has taken an opposing stance from Russia’s central bank, which has proposed a total country-wide Crypto ban in Russia. Putin cited the country’s electricity surplus, and the number of highly-trained/experienced Crypto mining professionals domestically as competitive advantages that the central bank should not be so quick to ignore. As of this time, Russia is the third-biggest Cryptocurrency mining county behind the US and Kazakhstan.

According to The Wall Street Journal, the Diem Association, Meta’s Cryptocurrency consortium, is selling its underlying technology and other assets to small California-based bank Silvergate Capital for $200 million. The crypto-focused bank has worked with Diem in the past, with the two partnering last year to issue a dollar-backed stablecoin together. If true, this would be a strong sign that rumors that Meta is looking to wind down operations for their much-maligned Crypto project are true.

Based on Tesla’s quarterly earnings report, the value of Tesla’s Bitcoin holdings at the close of Q4 remains unchanged from the previous quarter. Between Q3 and Q4, the EV and clean energy company have seemingly not purchased or sold any of their BTC according to company balance sheets. Tesla has not reported any gains or losses on Bitcoin as BTC prices were essentially flat from the end of the third quarter to the end of the fourth quarter.

Tim Cook addressed the growing Metaverse trend in an earnings call with analysts and investors last week. The Apple CEO claimed that they see the potential of the emerging Metaverse space and are exploring and investing accordingly in the underlying technologies. Following the call, Apple’s share prices jumped by 8%.

Finally, the Ethereum Foundation has removed all terminology that references “Eth1” and “Eth2” in favor of rebranding the highly anticipated upgraded proof-of-stake chain Ethereum’s “Consensus Layer” and the original blockchain the “Execution Layer” instead. The foundation cites greater clarity towards helping people understand how the Ethereum model will function, as well as avoiding potential scams as Ethereum looks to complete its transition to a PoS consensus mechanism this year.

Weekly Technical Analysis: 31 January – 6 February 2022

Bitcoin (BTC)

BTC is showing signs of a recovery by lifting lows and creating higher highs. However, an uptrend cannot be confirmed if BTC cannot break through resistance at $40,000. Support remains at $33,000 this week. Traders are advised to see if the support can remain intact before entering a position.

Ethereum (ETH)

ETH rallied alongside Bitcoin, but the trend will remain bearish until ETH can successfully break through resistance at the $3,000 level. Entering on dips if support at $2,300 looks strong is a lower-risk trading strategy that can be adopted this week.

Synthetix (SNX)

SNX outperformed the rest of the market, managing to be up by 29.5% from last week. If SNX has enough momentum to break through the 185 Baht level, the DeFi token will next look to challenge resistance at 200 Baht. Support is set at 150 Baht for this week, which could make an excellent entry point for investors looking to enter an SNX position this week.

The Sandbox (SAND)

SAND is up by 26.3% from last week and has the opportunity to reverse into an uptrend this week. An uptrend can be confirmed if the GameFi token can successfully challenge resistance at 150 Baht. Support is set at 110 Baht this week, which could make a good entry point if prices dip. However, if support cannot remain intact, traders may have to sell and cut their losses if the GameFi trend loses its momentum.

Trading and Investment Considerations For The Week

Bitcoin is showing signs of a gradual recovery, but the risk of further corrections remains, particularly if BTC is unable to break through resistance at the $40,000 level. Macroeconomic factors that could affect Bitcoin’s recovery moving forward include the US Consumer Price Index report (next release date: February 10) and how inflation rates develop over the coming weeks.

A sharp increase in CPI could put pressure on the FED to accelerate the rate at which they raise interest rates this year, which could negatively impact ALL markets, including Bitcoin prices. However, if CPI doesn’t increase dramatically or remains stable, that could give the digital asset market the space it needs to recover properly.

GameFi tokens like SAND, MANA, and GALA are beginning to capture investor interest again. If this rally can be sustained, GameFi tokens could see an upwards reversal soon, making them interest assets to consider for medium/long-term investing.

GameFi and Metaverse-related tokens look like they are gaining momentum this year. With more and more businesses and brands looking to explore opportunities on the Metaverse, prices for the tokens that power the underlying infrastructure of the Metaverse are sure to increase as adoption grows. While the buzz seems to have faded from Smart Contract platforms and DeFi 2.0 tokens, with the Metaverse capturing investors’ attention instead, the fundamentals of these projects remain solid.

While GameFi tokens seem to be rallying, traders and investors are advised to keep an eye on industry sentiment. Despite CertiK’s report of Crypto Cars being a “Rug Pull” being a false alarm, if the sector continues to see similar news that breeds mistrustful sentiments within the community towards GameFi projects, prices of GameFi tokens could be temporarily affected as well.

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