Key Insights:
- BTC ended an eight-week winning streak, falling by 5.64%, in the week ending December 17.
- Increasing regulatory risk impacted buyer demand for BTC and the broader crypto market.
- On Monday, focal points include BTC-spot ETF-related news, US lawmakers, and SEC activity.
Bitcoin Drops Below $41,000 as Regulatory Risk Resurfaces
Bitcoin (BTC) slid by 2.01% on Sunday. After a 0.60% gain on Saturday, BTC ended the week down 5.64% to $41,362. Significantly, BTC ended an eight-week winning streak.
On Monday, BTC was down 1.22% to $40,857.
Increasing regulatory risk impacted buyer demand for BTC and the broader crypto market.
The increasing support for Senator Warren’s Digital Asset Anti-Money Laundering Act raised concerns, likely contributing to the drop below $41,000.
On Sunday, CryptoLaw US founder and amicus Curiae attorney John E. Deaton shared his views about the Senator Warren bill. Deaton highlighted that 20% of the US Senate has agreed to support the bill targeting the US digital asset space. However, Deaton viewed the outcome of the 2024 US Presidential Election as a deciding factor on whether the bill progresses.
A Democrat clean sweep, gaining control of the House and the Senate, could give the bill safe passage through Congress. Nonetheless, Deaton did not expect the bill to progress in Election Year.
Significantly, Senator Warren’s bill would impose banking-style regulations on crypto-related firms. The SEC would likely receive statutory authority to regulate the US digital asset space.
The increased support for Senator Warren’s bill puts the spotlight on the SEC v Coinbase (COIN) case.
SEC v Coinbase: Motion to Dismiss Ruling Pivotal for US Crypto Market
Coinbase filed a motion to dismiss (MTD) in its ongoing case against the SEC in August. Coinbase argued the SEC lacked the statutory authority to regulate crypto exchanges.
If Judge Katherine Failla grants the MTD, the SEC could lose its freedom to regulate by enforcement. The timing could prove pivotal for the US digital asset space. On January 17, 2024, the SEC and Coinbase must present oral arguments relating to the MTD. Notably, a ruling would likely come before the 2024 US Presidential Election.
However, legislation and statutory authority for the SEC to regulate crypto exchanges could affect a ruling for Coinbase. The outcome of the US Presidential Election could decide the fate of the US digital asset space. Congress could override Supreme Court rulings.
Bitcoin Price Forecast
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See all Bitcoin forecastsFocal points include US regulatory chatter, SEC activity, and BTC-spot ETF-related news.
However, a fall through the $40,800 support level would give the bears a run at the $39,600 support level.
The 14-Daily RSI reading, 51.01, indicates a BTC move to the $42,900 resistance level before entering overbought territory.
Ethereum Analysis
ETH remained above the 50-day and 200-day EMAs, affirming bullish price signals.
An ETH return to $2,250 would support a move to the $2,300 resistance level.
However, a drop below the $2,150 handle would bring the $2,143 support level and sub-$2,100 into play.
The 14-period Daily RSI at 49.58 suggests an ETH fall through the $2,100 handle before entering oversold territory.
