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As the weekend unfolds, Bitcoin (BTC) has seen a notable uptick, trading at $41,700 with nearly 1.40% increase on Saturday. Despite this positive momentum, skepticism remains as The New York Times maintains a cautious stance on Bitcoin’s prospects. Adding to the wary outlook, the RBI Governor has flagged cryptocurrencies as a risk to the stability of the Indian Rupee, urging investors to proceed with caution.
Meanwhile, the Commodity Futures Trading Commission (CFTC) has reported a loss of $2.3 million by the cryptocurrency exchange Debiex due to alleged romance scams, highlighting the vulnerabilities within the crypto space. Furthermore, the strength of the US Dollar Index (DXY) is seen as a potential threat to Bitcoin’s recovery, compounded by the selling pressure from Grayscale Bitcoin Trust (GBTC).
With such diverse factors at play, investors are pondering whether it’s the opportune moment to buy into Bitcoin and Ethereum as the latter taps the $2,500 mark.
RBI Governor Cautions: Cryptocurrency Threatens Rupee Stability
Governor of the Reserve Bank of India (RBI), Shaktikanta Das, has spoken about the serious risks that come with cryptocurrencies, particularly for developing nations. Das underlined the possible effects on the monetary system, currency stability, and financial stability. He voiced worries about cryptocurrencies’ lack of underlying assets and their ability to replace money in payment systems and banking.
Das highlights the speculative nature of cryptocurrencies and sees considerable risks, even in spite of the U.S. Securities and Exchange Commission having approved spot Bitcoin exchange-traded funds (ETFs). The governor’s cautious approach increases the regulatory obstacles that cryptocurrencies must overcome and may lead to more volatility in the market.
CFTC Reports: Debiex Exchange Hit by $2.3M Romance Scams
The Commodity Futures Trading Commission (CFTC) has labeled cryptocurrency exchange Debiex as a “fraudulent digital asset platform,” accusing its senior staff of orchestrating romantic deceptions to defraud money.
CFTC Charges Bogus Digital Asset Platform with Fraud and Misappropriation in an Online Romance Scam: https://t.co/RpskNapy7i
— CFTC (@CFTC) January 19, 2024
The CFTC’s report alleges that Debiex representatives engaged in forming intimate relationships with potential clients, gaining their trust, and subsequently persuading them to open and fund trading accounts. This scheme reportedly siphoned over $2 million, with five victims currently identified over two years.
These romance scam allegations add to a series of challenges within the cryptocurrency industry, potentially impacting investor sentiment and activity by undermining the trust and credibility of crypto exchanges.
US Dollar Rally and GBTC Sell-Off Endanger Bitcoin’s Recovery
The U.S. Dollar Index’s (DXY) rally, up 2.71% from its December 27 low, poses a challenge to Bitcoin’s price recovery. Bolstered by robust retail sales and positive economic data, the DXY has seen significant gains. Concurrently, Grayscale’s Bitcoin Trust (GBTC) has experienced substantial outflows, with around 38,000 BTC withdrawn since January 11, when spot Bitcoin ETFs were introduced.
Economist Peter Schiff attributes these GBTC outflows as a key factor preventing Bitcoin’s price rise. Technical analysis suggests Bitcoin could potentially fall back to around $34,000, having been repelled at the $48,000 level, which aligns with the upper limit of an ascending parallel channel.
FINAL Day 5 Update for 1/17 #Bitcoin ETF Holdings$GBTC finally posted their data, showing 10,824 $BTC outflow.
On a net basis, ETFs bought 10,667 #Bitcoin on Day 5.
Ready for 1/18 reports $IBIT $FBTC $ARKB $BITB $BRRR $BTCO $HODL $EZBC $BTCW $DEFI $GBTC pic.twitter.com/WFEkvStjBc
— CC15Capital (@Capital15C) January 18, 2024
Bitcoin Price Prediction
Bitcoin has recently exited the narrow corridor where it had been confined, ranging between $43,400 and $41,600. The fall beneath this bracket indicates a bearish shift away from the previously observed lateral trading pattern.
At present, Bitcoin is hovering around $41,500, falling short of the 50 EMA mark set at $42,883, potentially acting as a hurdle to upward movement. The current descent reflects a rise in selling activity, with Bitcoin approaching a critical juncture of support near the $41,600 threshold.
Bitcoin Price Chart – Source: Tradingview
Should Bitcoin fail to maintain this support, attention may turn to the next significant support near the range’s lower edge. Market participants are keeping a watchful eye on these levels to determine Bitcoin’s forthcoming trajectory.
Ethereum Price Prediction
Ethereum (ETH) finds itself within a descending channel, trading close to $2,464, just shy of the 50-day Exponential Moving Average (EMA) at $2,495, which could serve as an immediate resistance point. The Relative Strength Index (RSI) is at 44, indicating a neutral position and allowing for possible price swings in both directions. Ethereum’s support is established at $2,475 by key Fibonacci levels, with a more decisive support at $2,417. A drop below this could precipitate further losses.
Ethereum Price Chart – Source: Tradingview
On the flip side, resistance looms at $2,605 and the upper limit of the current channel may further resist upward price movements. Traders should approach the market with caution, closely monitoring the identified support and resistance levels for signals of either a reversal or continuation of the current trend.
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