31. January 2023

• US regulatory agencies have issued their first ever warning to banks about cryptocurrencies, citing risks such as fraud, volatility, contagion, and consumer protection.
• Despite this news, Bitcoin is off to a steady start in the new year, currently trading at $16,844, and is retesting the range high of $16,900.
• With the help of leading indicators RSI and MACD, Bitcoin needs to close above the significant level of RSI 50 in order to indicate a change of momentum.

The crypto-asset sector has seen a lot of action in the past year, and US regulatory agencies have been monitoring the space closely. On 4 January 2021, the Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) released a joint statement addressing the risks associated with cryptocurrencies. The statement highlighted the significant volatility and the exposure of vulnerabilities that cryptocurrency assets pose to financial institutions.

The statement warned of risks such as fraud, volatility, contagion, and problems related to consumer protection, noting that these risks must be managed or controlled to prevent them from impacting the financial system as a whole. The agencies also cautioned that issuing or holding crypto assets is likely not in line with safe banking practices.

Despite the news, Bitcoin is off to a steady start in the new year. As of writing, Bitcoin is trading at $16,844, up by 1.13% for the day and 1.42% for the week. Bitcoin’s price is once again retesting the range high of $16,900 in confluence with its FIB 0.5 level resistance. The leading indicators RSI and MACD are also showing positive signs for Bitcoin. MACD has recently formed a bullish crossover caused by four consecutive days of green candle closes. On the other hand, RSI is looking to break the significant level of RSI 50 in order to indicate a change of momentum.

Overall, while the US regulatory warning might have a short-term impact on crypto prices, the general sentiment in the crypto space is still positive. With the help of leading indicators RSI and MACD, Bitcoin needs to close above the significant level of RSI 50 in order to indicate a change of momentum. If this happens, Bitcoin might be able to recover in 2023, making it a potentially profitable investment in the coming year.