Bitcoin fails to sustain rebound and could drop at least 7% to test support; altcoins retreat up to 17%

After trying to recover the $ 22,000 level on Sunday (12), Bitcoin (BTC) lost strength again in the early hours of this Monday (13) following the performance of Asian stock exchanges and future US stock indexes. At 7:10 am, the cryptocurrency is trading at $21,600, down 1.3% over the last 24 hours. Ethereum (ETH) is down 3.3% to $1,486.

Joe DiPasquale of BitBull Capital says that Bitcoin is now making a “downside test” after losing the $23,000 and $22,000 levels, and that it is close to defining the next move: whether it will “regain $23,000 mark or it will drop to $20,000 quickly.”

Investors take a step back and start weighing a possible stronger rate adjustment on the horizon after US jobs data came in stronger than expected just over a week ago. For analysts, the inflation data for January, which will be released tomorrow (14), should set the tone for risk asset markets this week.

“The market [de criptomoedas] also depends on macroeconomic developments and given that December consumer prices were higher than previously expected, the market may start to consider a higher rate hike [de juros] at the next Fomc,” he told CoinDesk in a note.

In search of support, Bitcoin is also digesting regulatory news. Last week, Kraken was fined $30 million by the US Securities and Exchange Commission (the SEC) for its staking service. The Wall Street Journal also reported in a report that Paxos is next on the SEC’s hit list, targeting stablecoin Binance USD (BUSD).

“Regulation is also a concern for the crypto industry, especially after the $30 million fine the SEC imposed on exchange Kraken,” commented DiPasquale. “That said, we believe it’s better to get regulatory clarity in a down market versus tougher changes during a bull market.”

Despite the challenging backdrop, DiPasquale claims he remains bullish on Bitcoin – even if it breaks through support levels.

“[Nós] we will look to accumulate more if prices fall below $20,000”.

While Bitcoin continues without a clear definition, investors step on the brakes when buying riskier assets, making the so-called altcoins (crypto alternatives to Bitcoin) suffer more this Monday, with emphasis on Hedera (HBAR), which retreats almost 17% in the last 24 hours.

Among the most valuable cryptos, BNB Chain (BNB), XRP and Cardano (ADA) are down close to 5% compared to Sunday morning.

Check out the performance of the main cryptocurrencies at 7:10 am:

Cryptocurrencies with the biggest increases in the last 24 hours:

Cryptocurrencies with the biggest losses in the last 24 hours:

Check out how cryptocurrency ETFs closed in the last trading session:

SEC Will Sue Paxos Over Binance Crypto, Says WSJ

The US Securities and Exchange Commission (the SEC) intends to sue Paxos over the issuance of Binance USD (BUSD), Binance’s branded stablecoin, the Wall Street Journal reported on Sunday (12).

The SEC is reportedly claiming that BUSD is an unregistered security, according to the WSJ. An SEC spokesperson told Coinesk that the Commission does not comment on the existence or non-existence of a possible investigation.

The news comes days after CoinDesk reported that Paxos is under investigation by the New York Department of Financial Services, although the scope of the investigation remains unclear.

BUSD is a Binance-branded stablecoin issued by Paxos, a New York-regulated company that also holds a provisional authorization from the Office of the Comptroller of the Currency, a federal banking regulator.

A Binance spokesperson told CoinDesk, “BUSD is a stablecoin wholly owned and managed by Paxos. As a result, the market value of BUSD will only decrease with time. Paxos will continue to service the product, manage redemptions and will follow up with additional information as needed. Paxos has also ensured that the funds are safe and fully covered by reserves in their banks.”

EU wants to tighten crypto rules for banks

A new bill submitted to the European Parliament on Friday (10) could oblige EU banks to put the maximum possible risk weight on crypto assets.

Under the proposal, banks would have to disclose their direct and indirect exposure to cryptos, while the European Commission prepares more refined rules for the sector.

“The potentially growing involvement of institutions [financeiras] in activities related to crypto-assets must be broadly reflected in the Union’s prudential framework, in order to adequately mitigate the risks of these instruments to the financial stability of institutions,” said a text from the Committee on Economic and Monetary Affairs of Parliament.

“This is all the more urgent in light of recent adverse developments in the crypto markets,” added the explanatory material.

Nexo to stop paying crypto account in the US

Cryptocurrency platform Nexo said it will stop its remunerated account service for all customers, US residents and citizens starting April 1.

Nexo’s decision comes after the company paid a $22.5 million fine to the SEC for failing to register the offer and sale of the product.

The company also said at the time that it would be discontinuing offerings in eight states and stopped accepting new US customers.

However, Nexo also said that its other loan offer will continue as normal and that customers will continue to earn the same interest as the crypto-earning account until April 1, 2023.

PayPal suspends own stablecoin plan

Payments giant PayPal is putting work on hold around creating its own stablecoin, according to Bloomberg.

The news came shortly after Paxos, seen as a kind of PayPal of the crypto world, became the subject of an investigation by the New York Department of Financial Services (NYDFS).

“We are exploring a stablecoin,” Amanda Miller, a spokeswoman for PayPal, said in an emailed statement to Bloomberg. “If and when we seek to move forward, we will, of course, work closely with relevant regulators.”