Daily News | Markets Brace for US Inflation Data Release and SEC Crackdown on Stablecoins
Crypto Daily Digest: Global Markets Brace for US Inflation Data Release
Good morning traders! It’s CPI Tuesday. Watch out for volatility and let’s make the most of this day! 🚀
Asia’s shares are expected to increase due to the previous day’s rally on Wall Street as investors prepare for the release of US inflation data. The anticipated acceleration of US inflation in January and a report of crude oil sales from the Strategic Petroleum Reserve has led to a drop in oil prices. However, an analyst from JP Morgan & Chase recommends investing in bonds instead of equities as there is currently no indication of an impending recession in the stock market.
The market will be searching for indications of whether the slowdown in inflation is slowing down or reversing. If the annual rate comes in at around 6% or lower, the data will likely be seen as bullish, which could offset some of the selling related to regulation. However, regulatory developments have a greater impact in the short term compared to macro factors, but macro factors will play a larger role in the long run.
The S&P 500 and Nasdaq 100 both increased due to a survey indicating a decrease in household income growth expectations. Meanwhile, the crypto market was impacted by the New York Department of Financial Services ordering Paxos to stop issuing BUSD, causing Bitcoin to drop 1.95% before closing at -0.04%. Binance’s BNB also experienced a 9.5% drop before recovering some losses and ending the day at -5.83%.
Topic of the Day: SEC Steps Up Enforcement on Stablecoins with Paxos in Crosshairs
The US Securities and Exchange Commission (SEC) has taken notice of Paxos, a crypto infrastructure provider, over its involvement with the Binance USD stablecoin, alleging that it is an unregistered security. The New York Department of Financial Services has also issued a consumer alert and ordered Paxos to stop producing the BUSD stablEcoin due to several unresolved issues with its relationship with Binance.
The recent regulatory crackdown on stablecoins by the U.S. Securities and Exchange Commission (SEC) implies that the regulatory body is taking a closer look at the crypto industry and stablecoins in particular. The SEC’s move against crypto infrastructure provider Paxos over its involvement in the Binance USD stablecoin, alleging that it is an unregistered security, could indicate that the SEC is trying to enforce existing statutes, rules, and court decisions that apply to cryptocurrency.
The purpose of the crackdown may be to prevent potential financial stability risks that could result from the rapid growth of stablecoins. The Financial Stability Oversight Council, a supercommittee of U.S. regulators, has included stablecoins in a report on digital assets, warning that financial stability risks could result if stablecoins grow without appropriate regulation.
By targeting Paxos, the SEC is also signaling to other stablecoin issuers that they could face similar scrutiny, and that it will take a closer look at stablecoins and whether they comply with the regulatory framework. This could potentially help the SEC protect investors and ensure stability in the financial system. However, without adequate regulatory guidance and clarity, this increased crackdown could be challenging for crypto projects and the industry as a whole.
Further Reading:
Will 2023 Be the First Year of The Stablecoins?
BNB (BNB) $291.51 (-0.97%) - Neutral Outlook
Overview:
- Closest Daily support zone: 292.45 - 287.24
- Closest Daily resistance zone: 297.65 - 302.10
- Key Level: 302.10 (Monthly Close of Feb. 2021)
BNB saw a 9.5% drop before recovering some losses and ending the day at -5.83% on Monday. On Jan. 25, like most coins, BNB also broke above a descending trendline, although the candle was too weak to sustain an uptrend momentum in hindsight. The move up following the breakout did not reach a previous supply zone [349.09 - 397.98] and on Feb. 09, a bearish engulfing candle was spotted, implying there are now more sellers than buyers. Based on the volume profile indicator, BNB is currently experiencing a price struggle at the monthly level of 302.1 [Monthly Closing Price of Feb. 2021] with the winning side tilting to the bears. If BNB breaks below the trendline, it is likely it will find support above a previous demand zone [241.57 - 220]. On the contrary, if it rebounds from the trendline and closes above the monthly level, then it is likely it will retest the supply zone.
Daily Resistance zones
- 297.65 - 302.10
- 304.08 - 314.49
- 323.54 - 332.03
Daily Support zones
- 292.45 - 287.24
- 279.84 - 270.40
- 259.77 - 250.00
