Bullish Potential Hidden in Biden’s Executive Order
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| By Alex Benfield |
We've been warning of the higher-than-average volatility in the crypto markets recently, and with good reason.
On Feb. 24, Bitcoin (BTC, Tech/Adoption Grade "A-") dropped from $37,000 all the way to $34,500 before climbing back to $38,500 before the day closed.
Four days later, on Feb. 28, BTC shot from $37,600 all the way to $44,000, before it slowly trickled back under $38,000 again on Monday.
The latest go on this merry-go-round came late last night as BTC shot back up to the current price of $42,000 again after comments from Biden's new crypto executive order leaked early.
That is some major volatility, even for crypto markets. And it goes to show that until either the upper or lower end of the current trading range ($35,000 - $45,000) gives, things will remain volatile and shaky.
Price spikes like what we've seen recently can shake out even the most seasoned traders, so once again we remind you to not trade with any leverage unless you are willing to risk your entire position.
Now, today's price jump in Bitcoin and the wider market stems from the news of President Biden's executive order — which is nowhere near as bearish as many had speculated. While the order didn't outline any action other than conducting more research into the space, the overall message was that the Biden administration wants to maintain the United States' position as a leader in the industry while pushing out smart regulation that protects the average investor.
Now, what constitutes "protecting the average investor," is certainly up for interpretation. But it does seem like the administration is finally recognizing its opportunity for the country to position itself as a leader and innovator in this emerging industry … and all the financial benefits that come with that.
Better now than later for the United States, since we're already seeing the early stages of international competition to innovate and adopt cryptocurrencies.
On the same day Biden released his executive order, Dubai introduced a law to regulate and promote cryptocurrencies.
This is obviously very bullish for cryptocurrencies and the industry at large, and it'll be interesting to see how things develop.
How has Bitcoin reacted to all this news?
Well, BTC is trading up over 9% on the day, at the time of writing, jumping back above the $42,000 resistance line. The next hurdle to the upside is the $45,000 resistance level, which has held strong since early January.
If Bitcoin fails once again to break through that barrier, we'll likely continue to see prolonged range trading and volatility across the entire market.
Let's hope the third try is the charm.
Here's BTC in U.S. dollar terms via Coinbase Global (COIN):
With all the publicity squarely focused on Bitcoin lately, Ethereum (ETH, Tech/Adoption Grade "A") and other altcoins are now mostly dependent on Bitcoin breaking out of its current range. Until then, we're likely to see some bleeding and volatility in the altcoin market.
There will be a few exceptions to this, of course. Terra (LUNA, Tech/Adoption Grade "D"), for example, has been trending upward for roughly two weeks now and hit a new all-time high just over the $100 mark earlier today before retreating slightly.
But that's an outlier. While the market remains undecided on its short-term direction, Bitcoin is the asset to watch.
In the meantime, however, it appears ETH has set a pattern of some lower highs and lower lows.
If ETH can break through and hold $3,000, it should reverse that trend.
Here's ETH in U.S. dollar terms via Coinbase:
Notable News, Notes, and Tweets:
What's Next
President Biden's executive order was a long time in the making, as it has been weeks since it was announced to be "coming soon." In time since its announcement, there has been plenty of fear, uncertainty and doubt (FUD) about what it might contain … and the position the U.S. would take on this issue.
After weeks of waiting — and pricing in some of that FUD — the executive order is nowhere near as bearish and scary as some had thought it might be. Yes, regulation will be coming to this industry, not all of which will be good. However, it's clear the government sees the benefits of a thriving cryptocurrency industry and what that could mean for the country.
We expect some trials and tribulations — and plenty of mistakes — along the way. But the U.S. government has opened up its doors to hear from industry leaders. Hopefully, those who can provide a good voice for this community and industry. If they can, we may be able to avoid overbearing regulation while allowing for smart laws and regulations to bring in more market participants in the future.
If it can pull this off, the U.S. will position itself as a big winner in the crypto space with the right attitude and thoughtful regulations.
This is the first step in the right direction.
Best,
Alex
