After Bitcoin’s sudden, and, for many investors, scary drop to $33,000 on January 24, the crypto market has failed to recover its prices. While there’s been a slight price jump in the past week, things are still far off the mark. After a brief rally to almost $39,000 on January 26, Bitcoin couldn’t sustain that level. Since then, it’s constantly been attacking that mark and $40,000, gaining a tiny 1.6% in the past week.
What’s good is that during the recent price crashes the aggregate futures contracts liquidations remained relatively low. Buyers terminated $570 million in futures, while shorts had $690 million. Stats show that Bitcoin futures were 41% of the $1.25 billion liquidations, signaling that an upward price swing could be on its way.
Regulatory Changes May be Holding Bitcoin Back
Last week, US Congressman Ted Bubb submitted an amendment that aims to scrub the bill that allows the US Treasury to prohibit financial transactions without public input. If the Congress passes this bill, it will be a serious blow to the crypto industry. Of course, these kinds of news have scared investors away, and that’s one major reason for the continuing price drops.
If the America COMPETES Act of 2022 passes, the White House will essentially grant government agencies the right to conduct risk assessment on any financial transaction. Those include cryptocurrency transactions too. For example, if a government agency assesses that a Bitcoin transaction is a national security threat, it can block it and arrest the involved parties.
It’s obvious that this is one of the biggest reasons for the continuing price decrease, although experts are adamant that this too will pass. Even with the price down over 20% in 2022, the total crypto market capitalization showed a 12.5% bounce since the January 24 crash, which is positive indeed.
Of course, nothing’s stopping the market from bouncing back further if regulatory winds change. As soon as there’s a whiff of a positive development in terms of crypto regulation anywhere, the market will post a better price.
The Metaverse Has a Lot of Potential According to Apple
In an investors call last week, Apple CEO Tim Cook said that the Metaverse has a lot of potential. He also said that the company will invest in AR on its devices, sending all metaverse tokens up by 36%. The biggest gainers were FLOW, SAND, MANA, and ENJ.
The same news threw some altcoins out of range. For example, Terra’s LUNA suffered a drop after it was announced that TIME (Wonderland money) said that a pending proposal would determine if the project closes up. The MIM stablecoin immediately dropped under 1.00, knocking the LUNA and UST tokens both.
On the other hand, Tether premium and CME futures showed improvement. There was a 5% discount that indicates heavy selling activity. The Tether indicator showed that it stood over 99% for the past week, which is mightily different from previous weeks when panic selling in China resulted in a 4% discount.