Bitcoin Breakthrough, But Crypto Needs a Breather Says Analyst

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The crypto market experienced another surge, gaining 3.9% within the past 24 hours and reaching a capitalization of $1.18 trillion.

While stock indices faced a sharp decline due to expectations of a rate hike, the crypto market diverged from this trend.

Bitcoin, in particular, witnessed a remarkable 15% surge in just two days, revisiting the area of April highs above $30,000.

However, the current recovery has paused, and experts believe Bitcoin needs to consolidate before resuming its upward movement.

According to Alex Kuptsikevich, senior market analyst at FxPro, there are concerns about the sustainability of the cryptocurrency rally in the near term.

Above: Bitcoin in USD at daily intervals.

The challenging environment created by falling stock indices poses a potential obstacle for risk-sensitive assets. Kuptsikevich explains, "Bitcoin needs to consolidate a bit before it can resume its ascent."

He also highlights the technical targets for a potential BTCUSD correction, stating, "The 29.3 and 28.5 levels, 76.4% and 61.8% of the latest rally, respectively, are the areas to watch. If the decline is halted at either of these levels, we could expect new multi-month highs soon."

Meanwhile, significant developments in the crypto market have contributed to the positive sentiment.

The official launch of the new crypto exchange, EDX Markets, played a crucial role in boosting Bitcoin's rise. Notably, the project is backed by renowned financial giants such as Citadel Securities, Fidelity Investments, and Charles Schwab. Additionally, BlackRock's recent application to the SEC for a spot Bitcoin ETF garnered favourable market reactions.

Grayscale Investments' GBTC Bitcoin fund also experienced a substantial increase in trading volume, surging five-fold to $80 million following BlackRock's filing with the SEC.

Building on this momentum, other major investment firms, including WisdomTree, Invesco, and Bitwise, have followed suit and applied for their own spot Bitcoin ETFs.

Federal Reserve chief Jerome Powell emphasized the need for regulatory oversight in the crypto space. Powell stated that payment stablecoins are considered money and, therefore, require proper regulation. He highlighted the risks associated with allowing large amounts of private funds to be created without oversight, calling it a "grave error."

In line with Powell's remarks, investment bank Berenberg suggests that stablecoins and decentralized finance (DeFi) projects could be the next targets of the Securities and Exchange Commission's (SEC) crackdown. Following its actions against major exchanges, the SEC may now focus on the issuers of the two largest stablecoins, Tether (USDT) and USD Coin (USDC).