Cryptocurrencies test support after pessimism peaked

Market picture

Bitcoin stuck to support near $24K on Thursday. Cryptocurrencies balance gains and losses while waiting for meaningful signals from traditional financial markets. This consolidation could prove beneficial, confirming cryptocurrency's total capitalisation of over $1 trillion and paving the way for another leg higher.

In our view, the crypto market has passed its peak of fear, and we should expect an uneven but still upward movement with periodic corrections.

Local significant support has formed at $23.7K, but local reversals to the downside are coming from lower levels: $25K on Tuesday, $24.5K on Thursday and $24.1K on Friday morning.

A step back to a broader picture shows that the observed pullback remains within a typical correction following the rally from mid-February, which left bitcoin above January's highs. The real threat to our bullish view on bitcoin is a break below $21.5K, which would update local lows and break below the 50-day moving average, now acting as a trend indicator.

News background

The New York Attorney General's office has sued crypto exchange CoinEx, alleging that the site violates the Martin Act and is not registered with the SEC or CFTC.

The Canadian regulator has banned trading in algorithmic stablecoins. The Canadian Securities Administrators Association (CSA) has unveiled new rules prohibiting local traders from buying and selling stablecoins that the agency does not approve.

The Bank of Israel has published a set of requirements for stablecoin issuers. The guidelines include banning algorithmic stablecoins if they are widely used for payments.

Circle, the issuer of USDC's second largest stablecoin, plans to increase its headcount by 15-25% by the end of the year, despite a trend of widespread layoffs in the crypto industry.

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