In this week’s crypto highlights, we explore the price movements of BTC, MATIC, BNB, and XLM. Additionally, this recap includes other notable industry news items that occurred over the last seven days. Without further ado, let’s dive into the latest market developments.
Noteworthy market events
The SEC sent a Wells notice to Coinbase, and charged Tron founder Justin Sun
The U.S. Securities and Exchange Commission (SEC) again “rewarded” the crypto industry with its attention. Recent big moves include a Wells notice to Coinbase, and charges against Tron founder Justin Sun with regard to potential fraud and other securities law violations.
A Wells Notice is a warning from the SEC that it has identified violations of securities laws, and is typically followed by legal charges. Coinbase CEO Brian Armstrong said the notice relates to staking and asset listings — and on Twitter, he expressed frustration at the regulator’s actions. In its blog post, Coinbase highlighted that the company tried to ask for clear crypto rules, but received “legal threats” instead.
SEC’s charges against Justin Sun are related to the unregistered offer and sale of Tronix and BitTorrent. There are also allegations that secondary markets for TRX were manipulated through “extensive wash trading.” In a response to this news, Justin Sun said that the “complaint lacks merit.” He stated that the SEC’s regulatory framework for digital assets is still in its infancy, and needs to be developed.
Takes on crypto from the annual Economic Report of the President (U.S.)
The White House released its annual economic report, with a chapter dedicated to cryptocurrencies. Essentially, the 37-page reveal of the administration’s perspective on crypto ran from skeptical to negative. Here are a few statements from this report:
- According to the authors, Bitcoin is volatile, risky, speculative, and has no fundamental value. In addition, fiat is better than Bitcoin because it’s backed by the “trusted” central bank.
- Crypto assets are not exclusively securities. It depends. “Regardless of the label used, a crypto asset may be, among other things, a security, a commodity, a derivative, or another type of financial product, depending on the facts and circumstances,” as said in the report. Will the SEC read this?
- It was said that FedNow, the Federal Reserve’s new real-time payments system, and a proposed digital form of the U.S. dollar (CBDC), would bring the U.S. “into the digital era in a clear and simple way, without the risks or irrational exuberance brought by crypto assets.”
- Nevertheless, some crypto is here to stay and blockchain could be useful. “It is conceivable that some of their potential benefits may be realized in the future,” the report highlights.
Terra co-founder Do Kwon arrested in Montenegro
On March 23, Filip Adzic, Montenegro’s Minister of Interior, tweeted that police had detained Terra co-founder Do Kwon at an airport with falsified documents that included Costa Rican and Belgian passports. The next day, a court in Montenegro ordered Do Kwon to spend the next 30 days in detention. But local media reports suggest the Terra co-founder is planning to appeal this decision.
Hours after the founder of the collapsed UST stablecoin was arrested in Montenegro, federal prosecutors in New York charged him with eight counts of fraud and market manipulation. South Korea is expected to seek Do Kwon’s extradition as well. South Korea plans to “proceed with the extradition process in accordance with the law and international agreements,” the country’s Ministry of Justice said.
CFTC filed a lawsuit against Binance, and its founder Changpeng Zhao
The U.S. Commodity Futures Trading Commission (CFTC) sued Binance, its CEO Changpeng Zhao (CZ), and ex-Chief Compliance Officer Samuel Lim for allegedly breaking U.S. laws and offering unregistered futures and options trading. Here are some CFTC accusations from the 74-page lawsuit:
- Binance secretly let U.S. customers use its futures platform, despite its ban in July 2019.
- The platform used ~300 “house accounts” to trade against its customers.
- Binance alerted its VIP members if law enforcement officials requested a freeze of their accounts.
- Binance knew criminals used its platform, and didn’t try to prevent it.
- The platform faked its compliance audit.
Binance’s CEO described this lawsuit as “unexpected and disappointing,” stating that the complaint “appears to contain an incomplete recitation of facts.” Some crypto enthusiasts consider this move a “fatal blow to Binance,” while others think that a fine could follow, but it won’t have long-term effects. According to Nansen, $1.6 billion was withdrawn from Binance after the lawsuit’s announcement, but the platform’s on-chain balance still stands at $64 billion.
Bitcoin continues to consolidate near $28,250
Evaluating the news items detailed above, one could be forgiven for thinking that they sound like bearish triggers that pushed the Bitcoin price down. However, this didn’t happen. Yes, Bitcoin temporarily moved below $27,000 amid the CFTC lawsuit against Binance, but then it rapidly rebounded to $28,250.
In fact, Bitcoin is approaching its best quarterly gain in two years, showing an over 60% price increase this year. This has allowed Bitcoin to outperform almost all S&P 500 stocks, as well as gold. Some of these gains are assumed to be related to the banking crisis in the U.S, and across the globe. The Fed continues increasing its balance sheet, while the Bitcoin narrative as a hedge against inflation grew louder.
As an example of activity that potentially supports the argument, digital asset funds saw inflows instead of outflows for the first time in six weeks. According to CoinShares, this could pose challenges for traditional finance, as it was the largest funds inflow since July 2022. However, there are still concerns about liquidity in crypto following the banking unrest, which could lead to increased volatility in the longer term.
Over the last seven days, Bitcoin was predominantly consolidating near $28,250, indicating that the market is growing used to new prices. The asset made several attempts to sustain above this level, but failed. At the same time, the Bitcoin trading volume more than halved compared to the previous week, hinting that bullish momentum may be fading away.
Bitcoin formed a bearish divergence with RSI on a daily chart, while MACD lines are on the verge of a bearish crossover (blue circle). This means the asset still has the potential for a price correction to $25,500, where 0.236 Fibonacci is located.
Looking at the four-hour chart, the situation is more in favor of the bulls. Bitcoin broke RSI’s descending trend (white line) and moved to positive territory. In addition, the asset is far from the overbought zone, meaning there is room for upside movement. If Bitcoin manages to sustain above $28,250 for a longer period of time, it could open the gate to $30,000.
MATIC may retest the $1 level
MATIC has been trading inside an ascending channel for almost a year, showing more than a 300% price gain throughout this period. On March 27, Polygon’s zkEVM was deployed on the Ethereum mainnet to introduce zk-rollups. This event helped the MATIC price bounce off the $1.03 support level, and return to the $1.15 resistance area.
However, on-chain data shows that MATIC whales are not convinced of a prolonged rebound. MATIC high-rollers have been taking profits since late February, while the number of whale transactions has dropped by more than 50% since mid-February. Historically, such market behavior precedes price drops.
If MATIC fails to sustain above $1.15, the next targets for the bulls could be $1.03 and $0.95, near the lower border of the ascending channel. If successful, this can push the asset to the middle of the established channel.
BNB rejected the $336 resistance level again
BNB experienced increased bearish pressure amid the news of the CFTC lawsuit against Binance. As a result, bears managed to protect a major $336 resistance area. The asset has been trying to sustain above it since May 2022.
Daily RSI moved the neutral zone, while MACD lines made a bearish crossover. In addition, the BNB price moved below the middle of the Bollinger channel, indicating that the path of least resistance is to the downside. The next potential targets for the bears could be near the $288 and $267 levels.
However, if the asset managed to recover above the 20-day EMA, and the middle of the Bollinger channel, bulls could make another attempt to break the $336 level.
XLM broke the 200-day SMA
For the first time since October 2021, the XLM price managed to break the 200-day SMA on a daily chart, indicating a potential change in market trend. As a result, the asset jumped above the $0.1 resistance area. But the further upward movement could be more difficult.
XLM approached the overbought zone, and higher-volume area, according to RSI and VPVR indicators, respectively. This suggests that the asset may experience a correction to the 200-day SMA, or consolidation near $0.1.
If the XLM price drops below the 200-day SMA, it could reestablish bearish momentum, pushing the asset to the $0.09 area.
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Disclaimer: For information purposes only. Not investment or financial advice. Seek professional advice. Digital assets involve risk. Do your own research.