Crypto Weekly 12 – 18 June 2023
Coinbase has officially been charged in a lawsuit by the US SEC on multiple charges, including unregistered securities trading and operating as an unauthorized staking service.
The Securities and Exchange Commission (SEC) of the United States has officially filed a lawsuit against Coinbase, accusing the company of various violations. The charges include allowing the trading of coins that qualify as securities without proper authorization, as well as offering stake-as-a-service without registration. Additionally, the SEC claims that Coinbase has failed to provide adequate investor protection measures.
Brian Armstrong, the CEO of Coinbase, has responded to these allegations, firmly denying the SEC’s claims. He asserts that Coinbase has not listed any securities and, prior to launching its services, sought continuous consultation from the SEC. Armstrong also argues that the regulatory framework has been unclear and lacking in clarity.
The SEC has petitioned the court for a temporary restraining order to freeze assets linked to Binance US, preventing the platform from facilitating dollar transactions due to the termination of banking services. However, Binance USA has reassured its users that their assets remain secure.
Gary Gensler, the chairman of the SEC, reiterated his belief in an interview with CNBC that the United States no longer needs additional digital currencies. Gensler believes that existing fiat currencies including the US dollar, Euro, Yen, etc. are sufficiently digital.
Following the SEC’s lawsuit against major exchanges Coinbase and Binance, decentralized exchanges (DEXs) have experienced a significant increase in average trading volume. Within 48 hours, DEX platforms such as Uniswap on Ethereum and Arbitrum, as well as Pancakeswap, witnessed a +444% surge in trading activity.
Investment management firm, ARK Invest, has increased its holdings in Coinbase after its stock prices substantially fell by over 20% following news of the SEC’s lawsuit. ARK Invest purchased an additional 419,324 shares, worth an approximate value of $21.6 million. As a prominent shareholder, ARK Invest remains confident in Coinbase.
A member of Hong Kong’s Legislative Council has taken to Twitter, urging Coinbase and global exchange operators to register and obtain cryptocurrency business licenses in Hong Kong. The member believes that Hong Kong, with its genuine support for the technology, can become a vital hub for the expansion of the cryptocurrency industry. This stands in stark contrast to the increasingly stringent regulatory measures being implemented by the United States.
Circle Internet Singapore, a subsidiary of Circle, has obtained a Major Payment Institution (MPI) license from the Monetary Authority of Singapore. This license allows Circle to provide digital payment token services, including both domestic and cross-border transfers. Circle sees Singapore as a crucial element in expanding its global business operations.
Optimism’s blockchain upgrade, Bedrock, has been successfully completed. This upgrade significantly reduces the deposit time from the Ethereum chain to Optimism, now taking only 1 minute on average compared to the previous 10 minutes. Furthermore, it lowers transaction fees and enhances overall security.
Weekly Technical Analysis: 12 – 18 June 2023
Bitcoin (BTC)
BTC experienced a significant decline throughout the week, reaching its support level at $25,200, also coinciding with its 200-day moving average. However, BTC price has managed to form a triple bottom pattern and seems to be holding its ground. Nevertheless, the short-term trend remains bearish, with a potential risk of dropping to the $24,000 mark. BTC’s relative strength index (RSI) is nearing oversold territory, suggesting a possible short-term rebound if it surpasses $28,000.
Ethereum (ETH)
ETH experienced a significant decline following worsening market conditions, dropping toward its crucial support level at the $1,700 mark. Although the support has remained intact thus far, ETH’s short-term trend has not yet recovered until it can break through resistance at $1,900. The market may engage in trading and profit-taking within the short-term support and resistance levels, as the buying pressure to support a long-term recovery is currently lacking.
Ripple (XRP)
XRP adjusted slightly upward by +1.4% over the past week. However, its trend continues to be influenced by the heavy selling pressure in the altcoin market. Caution is advised in trading, with the market potentially trading between the 16 THB and 19 THB support and resistance levels, respectively. If support cannot remain intact, XRP may stagnate. In contrast, profit-taking could occur around the 19 THB resistance level. Price remains highly volatile.
Wrapped NXM (wNXM)
WNXM experienced a slight decrease of -0.1% over the past week following the overall market trend. Traders could consider channel trading between the 900 THB and 1,000 THB support and resistance levels, respectively. Entering a WNXM position should be approached with caution.
Trading and Investment Considerations For The Week
Two major cryptocurrency exchanges, Binance USA and Coinbase, have been charged by the US SEC in lawsuits. The focus of these lawsuits is the allegation that several altcoins could be considered securities. The crackdown has contributed to a significant sell-off in altcoins, ranging from 10% to 20%. Meanwhile, Bitcoin experienced a decline of around 5%, resulting in the Bitcoin Dominance Index reaching a nearly two-year high, approaching the 50% level.
However, it should be noted that the increase in Bitcoin Dominance is primarily due to the sharp decline in altcoins, particularly those mentioned by the SEC. This indicates that altcoins are entering a clear bearish phase, while only Bitcoin and Ethereum remain above critical support levels. Therefore, it is not yet the ideal time to trade or invest in altcoins, and the focus should be on trading BTC and ETH within established support and resistance levels.
The key highlight of this week is the announcement of the US Consumer Price Index figures for May, scheduled for this Tuesday, June 13. The market expects the CPI to be lower than the previous month’s level of 4.9%.
Following that, on Wednesday, June 14, the Federal Reserve’s Federal Open Market Committee (FOMC) meeting will take place. According to the FED Watch Tool, there is a 70% chance of the FED keeping interest rates unchanged at 5.25%.
Disclaimer:
-Cryptocurrency and Digital tokens are highly risky; investors may lose all investment money. Investors should study information carefully and make investments according to own risk profile.
– Past Returns/Past Performance does not guarantee future returns/performance.
*Materials on Bitazza Weekly Newsletter are intended to be used and must be used for informational purposes only. The views, information, or opinions expressed are solely those of the individuals involved and do not necessarily represent those of Bitazza and its employees. The information contained herein is not intended to be a source of advice or financial analysis with respect to the material presented, and the information and/or documents contained in this website do not constitute investment advice.
Sources:
- https://watcher.guru/news/sec-sues-coinbase-citing-u-s-securities-law-violations
- https://cointelegraph.com/news/coinbase-reminds-world-it-tried-to-embrace-regulation-as-sec-sues-for-violations
- https://www.coindesk.com/policy/2023/06/06/sec-seeks-temporary-restraining-order-to-freeze-binanceus-assets/
- https://www.theblock.co/post/233295/gary-gensler-crypto-coinbase-binance
- https://cointelegraph.com/news/sec-coinbase-binance-lawsuits-surge-defi-trading-volumes
- https://cointelegraph.com/news/ark-invest-buys-coinbase-shares-the-same-day-sec-serves-lawsuit
- https://cointelegraph.com/news/hong-kong-legislator-invites-coinbase-to-the-region-amid-sec-scrutiny
- https://cointelegraph.com/news/circle-is-latest-recipient-of-major-payment-institution-license-in-singapore
- https://cointelegraph.com/news/optimism-successfully-completes-bedrock-hard-fork-reducing-deposit-times-layer-1-fees
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