Daily News | Wall Street Warns Consolidation Ahead, Liquid Staking Protocols on the Rise as SEC Crackdown Rumor Spreads
Crypto Daily Digest: Wall Street Warns Consolidation Ahead, Crypto Market Drops as Rumors of US Government Restrictions Circulate
Good morning, traders. Thank Gawd it’s Friday, amirite? Like always, let’s get after it relentlessly, and have a good weekend! 🚀
The stock market is currently facing various challenges, such as rising bond yields, hawkish behavior by Fed officials, and increasing bullishness among retail investors, which is often viewed as a contrary signal. The S&P 500 index has decreased, and options traders are increasing their bets on a 6% peak in Federal Reserve interest rates, which is higher than current expectations. The yield on the two-year note has reached 4.5% and surpassed the 10-year rate by the largest margin since the 1980s, indicating a lack of confidence in the economy’s ability to withstand further tightening.
Thomas Barkin, President of the Richmond Fed, has stressed the significance of raising interest rates to control inflation. Data on US jobless claims supports the idea of a robust labor market, while mortgage rates have increased for the first time in more than a month. Market analysts predict a period of consolidation, particularly following the recent surge in equity prices, with the primary challenge being excessive Optimism among retail investors. Some market observers anticipate that disinflation trades may soon be reversed as price increases prove to be more persistent than expected.
The cryptocurrency market, on the other hand, has seen a drop as rumors circulate about potential restrictions on crypto staking by the US government. Bitcoin‘s value has fallen by 5% in the past day and was trading at $21,765 by 23:00 UTC, according to TradingView data. Other cryptocurrencies, such as Ether, BNB, and ADA, have also seen a decrease, with ETH down 6.4%, BNB down 6.5%, and ADA down 8.9%. MemEcoins such as Dogecoin (DOGE) and Shiba Inu (SHIB) have also experienced sharp declines, with DOGE down 11.3% and SHIB down 11.5%.
The decline in the cryptocurrency market has also affected crypto stocks, such as Coinbase, which was down 14% on the day. This drop is attributed to comments made by Coinbase CEO Brian ArmsTRONg, who said that restrictions on crypto staking would be a “terrible path” for the US.
Among headlines, Kraken has agreed to pay $30 million to settle SEC charges over unregistered securities provided through its crypto staking platform to US customers. The SEC announced that Payward Ventures and Payward Trading, the registered companies that make up Kraken, will shut down their staking services. The SEC complaint alleges that Kraken marketed its staking program as a platform with benefits and returns from its efforts. Kraken stated that it will unstake assets held by US clients, except for staked ether, which will be unstaked after the Ethereum Network’s Shanghai upgrade. The SEC lawsuit characterized Kraken’s staking as high-risk with limited protection and SEC Chair Gary Gensler said crypto intermediaries must provide necessary disclosures and safeguards as required by securities laws.
Topic of the Day: Decentralized Dream: - SEC Settlement Paves Way for New Staking Players
A major shake-up in the world of cryptocurrency staking has sent shockWaves through the market, causing a sudden surge in the value of governance tokens for some of the biggest liquid staking protocols. Following the announcement that US-based cryptocurrency exchange Kraken would be ending its staking services after reaching a settlement with the SEC, the Lido Finance token experienced a 10.4% increase in value within JUST an hour. Other players in the market, such as Rocket Pool and Persistence, saw similar boosts in the value of their tokens.
Staking, which is a mechanism used to validate transactions on proof-of-stake blockchains like Ethereum, has become a popular way for investors to earn yields on their digital assets. However, the SEC has raised concerns that these staking services may be considered unregistered securities, putting the future of these centralized providers in doubt.
But this latest development could be a golden opportunity for decentralized platforms to step up and take over. With the value of staked ether in the hands of centralized exchanges making up around 28% of the total, according to Dune Analytics data, there’s a huge opportunity for decentralized platforms to make their mark.
Despite the initial surge in token values, the gains were later reduced, highlighting the volatile nature of the cryptocurrency market. Nevertheless, this recent development is sure to be a talking point in the world of staking for some time to come.
Rocket Pool (RPL) $51.222 (+4.83%) - Bullish Outlook
Overview:
- Closest Daily support zone: 47.292 - 46.184
- Closest Daily resistance zone: 49.321 - 50.894
- Key Level: 39.910 (Weekly Close of Jan. 23 - 30, 2022)
In the past 32 hours, RPL has risen to a height of 28.92% gains (51.996). We’re now seeing a second leg up with minimal signs of slowing down. Zooming in on the 4hr timeframe, the first leg up saw a retracement to the golden ratio, a.k.a. the 61.8% Fibonacci Retracement level (42.884), which also corresponded with an upper trendline. Based on the Fibonacci Extension tool, provided the second leg up is able to retrace back to anywhere above the 61.8% level (46.181), we can project a target range between 57.811 - 60.842.
Hourly Resistance zones
- 49.321 - 50.894
- 52.654 - 54.178
- 57.811 - 60.842
Hourly Support zones
- 47.292 - 46.184
- 45.339 - 44.000
- 42.858 - 41.648
