Bitcoin rebound halted – will the downtrend resume?

Bitcoin rebound halted – will the downtrend resume?
Crypto
Ara Zohrabyan
Author:
Ara Zohrabyan
Published on: 19.09.2022 14:57 (UTC)
Post reading time: 2.06 min
358

Bitcoin price is below $18,500 currently. A glance at the daily chart reveals the price retreated four out of seven sessions last week – giving back all of the previous week’s gains! The downward trend reversal was completed last week – but it looks the trend will reverse again this week!             



Markets switched to risk off trading last week ahead of Federal Reserve meeting on September 20-21 where a 75 basis point rate hike is widely expected to be announced. Investors’ sentiment was undermined significantly by FedEx ‘s withdrawing of its fiscal year 2023 earnings forecast last Thursday citing adverse impact of global volume softness. Meanwhile US banks continue evaluating the attractiveness of  crypto custody projects after US Securities and Exchange Commission (SEC) crypto guidance makes them costly for banks, crypto lender Celsius filed for permission to sell its stablecoin holdings and Ethereum is showing signs of increased centralization after the Merge.

 

The SEC’s March guidance said all US-listed public companies that function as crypto custodians should account for their crypto exposure as liabilities instead of assets on their balance sheets. And banks are required to hold cash to match liabilities on their balance sheets, according to the report published on Friday. U.S. Bancorp (USB) is pausing the intake of new crypto clients until it evaluates the "evolving regulatory environment," according to Reuters report.

 

 Crypto lending firm Celsius Network, which filed for bankruptcy in July, has asked the court for authorization to sell its stablecoin holdings in order to fund its operation by the sales proceeds. Celsius currently owns 11 forms of stablecoins totaling approximately $23 million.  A hearing is scheduled for October 6 in New York to discuss the proposed stablecoin sale.

 

Ethereum's Merge to Proof of Stake (PoS) was successfully completed at 6:42 UTC on Thursday morning last week. The new standard requires so-called validators to stake 32 ETH - about $50,000, with the platform, granting them ability to write and confirm transactions to the Ethereum ledger. That high capital requirement together with the technical difficulty of setting up a validator system has resulted in ETH flow to services offered by Coinbase, Lido, and other staking pools that allow users to become validators – and earn rewards for doing so – without much difficulty. And In the hours following Ethereum Merge over 40% of the network’s blocks were added by just two entities - Coinbase and Lido - increasing centralization.



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