Monday, 27 March 2023

Crypto News

Bitcoin bulls ignore the recent regulatory FUD by aiming to flip $25K to support

Bitcoin bulls ignore the recent regulatory FUD by aiming to flip $25K to support

It might seem like forever and a day ago when the Bitcoin (BTC) price was trading below $18,000, but in reality, it was 40 days ago. Generally, cryptocurrency traders tend to have a short-term memory and, more importantly, they attribute less importance to negative news during bull runs. A great example of this behavior is BTC’s 15% gain since Feb. 13, despite a steady flow of bad news in the crypto market.

For instance, on Feb. 13, the New York State Department of Financial Services (NYDFS) ordered Paxos to “cease minting” the Paxos-issued Binance USD (BUSD) dollar-pegged stablecoin. Similarly, Reuters reported on Feb. 16 that a bank account controlled by Binance.US moved over $400 million to the trading firm Merit Peak — which is supposedly an independent entity also controlled by Binance CEO Changpeng Zhao.

The regulatory pressure wave continued on Feb. 17 as The United States Securities and Exchange Commission (SEC) announced a $1.4-million settlement with former NBA player Paul Pierce for allegedly promoting “false and misleading statements” regarding EthereumMax tokens on social media.

None of those adverse events were able to break investors’ optimism after weak economic data signaled that the U.S. Federal Reserve (FED) has less room to keep raising interest rates. The Philadelphia FED Manufacturing Survey displayed a 24% decrease on Feb. 16 and U.S. housing starts increased by 1.31 million versus the previous month, which is softer than the 1.36 million expectation.

Let’s take a look at Bitcoin derivatives metrics to better understand how professional traders are positioned in the current market conditions.

Asia-based stablecoin demand remains ‘modest’

Traders should refer to the USD Coin (USDC) premium to measure the demand for cryptocurrency in Asia. The index measures the difference between China-based peer-to-peer stablecoin trades and the United States dollar.

Excessive cryptocurrency buying demand can pressure the indicator above fair value at 104%. On the other hand, the stablecoin’s market offer is flooded during bearish markets, causing a 4% or higher discount.

USDC peer-to-peer vs. USD/CNY. Source: OKX

Currently, the USDC premium stands at 2.7%, which is flat versus the previous week on Feb. 13 andindicates modest demand for stablecoin buying in Asia. However, the positive indicator shows retail traders were not frightened by the recent newsflow or Bitcoin’s rejecection at $25,000.

The futures premium shows bullish momentum


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