BTC & ETH : Trading at a crypto discount?


ETH& BTCUSD, Daily

Cryptocurrencies traded in the red on Monday, with Bitcoin falling below the $40,000 mark. United States Securities and Exchange Commission (SEC) Chairman Gary Gensler said in an interview for CNBC that crypto tokens collect money from the public and should therefore be regulated by securities laws and their anti-fraud provisions. He also argued they should be more transparent in their public disclosures.

The crypto benchmark has been in a downtrend since late 2021 and has the potential to fall further due to macroeconomic factors. At least, the above seems to be in line with the general sentiment in the market. The Fed turned more hawkish as the inflation metric rose, hitting a new high for the first time in 40 years and thus turning potential price expectations for Bitcoin to bearish, as many believe risk assets will suffer in the short term from the FED’s monetary policy changes. A while ago , the US financial institution changed its position from no rate hikes to multiple rate hikes planned for 2022, a reduced asset purchase program, and balance sheet normalization.

In general, crypto assets are at the farthest end of the risk curve. Just as they benefit from a very loose monetary policy, they suffer from an unexpectedly tight monetary policy, as money shifts to a safer asset class.

ETHUSD, D1

Ethereum extended its recent downtrend and hit a low of $2927, just above the 61.8% retracement and below the 200-day EMA. Further declines are expected as long as the $3,456 resistance holds, with the possibility to catch up to the $2,650 bottom. Meanwhile on the upside, a move above $3,456 would turn the bias back to the upside for $3,890.

Bitcoin took another sweep of lows, revisiting the $39,000 level before quickly bouncing back to $42,000. It remains to be seen if this price action will continue or if Bitcoin will return to lower levels; after all, 2022 will likely be a year full of surprises.

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Ady Phangestu

Market Analyst

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