Synopsis

• Market chaos persists, but technicals suggest a potential relief rally.
• The Federal Reserve’s decision to pause interest rate hikes is expected to calm the volatility in the crypto market.
• Regulatory crackdowns continue to influence the market, with possible expansion into the DeFi sector.
• Blackrock’s application for the Bitcoin ETF could indicate brewing troubles for Grayscale.
• Tether (USDT) is under renewed regulatory scrutiny. If any regulatory concerns take shape, it could pose a potential risk to the market.

Key Observations

Technicals suggest that the market is prepared to make a move higher. The total market cap seems to be breaking out of a trendline on the daily timeframe. On a closer look, the weekly timeframe presents a more bullish picture.

Analysis

Regulatory Measures and Crypto Market:

The Securities and Exchange Commission has come up with a proposal to change the legal definition of an ‘exchange.’ This is facing substantial criticism from the crypto community. The proposed change could bring decentralized exchanges (DEXes) under the legal purview of the SEC.

•  With regulatory measures on centralized crypto exchanges and projects, the market is demonstrating a degree of uncertainty. A potential expansion of these regulatory crackdowns into the DeFi sector is something to watch out for.

Federal Reserve puts rate hike on a pause

The current target for the interest rate has been kept unchanged at 5%-5.25%. But the Federal Reserve suggested that rates may go up to 5.6% by year-end if the inflation does not come under control.

• The decision to put a halt to interest rate hikes has proven to be a breather for the entire market. The total market cap has been able to hold the $1 Trillion mark.

Bankruptcy Processes and Market Impact

The aftermath of the Terra and FTX fallout has led to several crypto platforms and exchanges navigating bankruptcy processes. Despite this, these processes have not yet had a significant impact on the crypto prices. 

• This situation is expected to evolve as Voyager is reportedly set to allow withdrawals from Tuesday. 
• It is interesting to note that currently the correlation between the stock market and the crypto market is also pretty less.
• The overall sentiment in both the markets are different. Crypto participants are currently watchful, whereas stock market participants are displaying ‘extreme greed.’

Grayscale and Blackrock:

The recent news of Blackrock’s filing for a Bitcoin Trust raises questions about the financial stability of Grayscale, the largest Bitcoin Trust operator. It suggests that Grayscale might be encountering financial troubles, as their parent company, DCG, is known to be strapped for cash.

• Interestingly, Blackrock’s ETF filing has led to a rally in the price of Grayscale Bitcoin Trust (GBTC) shares, which were earlier trading at a 40% discount.

Potential Issue for USDT:

Tether (USDT) is attracting renewed scrutiny due to fears of a significant deviation from its peg. Given USDT’s role in leveraged trading, any issues could cause unwanted liquidations and serious market damage.

Deep Dive into the Top Gainer and Loser:

We closely analyze the performance of the top 50 coins by market capitalization, and take a closer look at the best and the worst performers of the week.

Top gainer of the week: Aptos (APT) up by 10.22% ⬆️

Aptos is one project which has received some serious funding from some of the most renowned investors, including venture capital firm Andreessen Horowitz (a16z), Tiger Global, Multicoin Capital and Binance Labs.

Opinion:

Fundamental analysis: For investors who have a strong belief in the promising future of the Aptos project and intend to hold their positions for medium to long-term durations, or even for those who align with both categories simultaneously, the buying zone of $6 to $7 appears favorable.

Technical analysis: The low trading volumes do not match the steadily rising price. It indicates that some large buyers might be pulling the price higher. Therefore, one should wait for the consolidation phase to get over and then make a move.

Oscillator indicators: 1 bearish, 9 neutral, 1 bullish 

Moving Average indicators: 10 bearish, 1 neutral, 4 bullish

Biggest loser of the week: Toncoin (TON) down by 8.44% ⬇️

The surprising classification of the Toncoin to be a security by the SEC has brought attention and sellers to this token. The classification considers it as investment contracts, subjecting it to securities regulations.

Opinion:

Fundamental analysis: It is a good time to take a pause and let the market make its move. Once the SEC ‘security classification’ dust settles, it would be a good time to re-look at Toncoin.

Technical analysis: After a retest of the trendline, the price has once again declined into the support zone provided by the weekly 50 Moving Averages (MAs). If it breaks down the 50 SMA line, a further decline toward the support level of $1.47 can be expected. 

Conclusion

• Technical indicators suggest a potential relief rally in the crypto market, with the total market cap showing signs of breaking out of a trendline.
• Regulatory measures continue to impact the market, with the proposed change in the legal definition of an ‘exchange’ potentially bringing decentralized exchanges (DEXes) under the SEC’s purview. Expansion of regulatory crackdowns into the DeFi sector remains a possibility.
• The Federal Reserve’s decision to pause interest rate hikes has provided a breather for the market, with the total market cap holding the $1 Trillion mark.
• Bankruptcy processes for platforms affected by Terra and FTX are underway, and the market impact is yet to be fully realized. The upcoming ability to withdraw funds from Voyager will be closely monitored.
• Blackrock’s filing for a Bitcoin Trust raises concerns about Grayscale’s financial stability, as their parent company, DCG, is reportedly facing financial constraints.
• Tether (USDT) is under renewed regulatory scrutiny, and any issues with USDT’s peg could lead to market damage and unwanted liquidations.