Highlights:
- BTC is currently rangebound between the $58,489 resistance and $55,819 support
- Positive news from the SEC is likely to trigger an increase in buying volumes soon
- Rally through $58,489 could see Bitcoin make a full recovery and rally back to $70k
In the last 24 hours, Bitcoin (BTC) has exhibited some weaknesses, reflecting the turbulence in the regulatory landscape in the United States. The leading cryptocurrency experienced a decline of 1.62%, bringing its price to $57,298.14 at the reporting time. This drop in BTC’s price can be primarily attributed to significant events unfolding in the US Congress.
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Congress Fails to Override Biden’s Veto
Yesterday, investors closely monitored the US Congress, anticipating a crucial vote that could override President Joe Biden’s veto of a proposal to revoke Staff Accounting Bulletin 121. This bulletin has posed challenges for banks in managing cryptocurrencies, impacting their ability to handle crypto assets effectively. However, Congress failed to gather the necessary majority to overturn the veto, leaving the restrictive rule in place. This outcome contributed to Bitcoin’s weakness in the market yesterday.
Positive Regulatory News from the SEC
Despite this setback, there are signs that the bearish momentum might be losing steam. Positive news from Bloomberg has provided a glimmer of hope for BTC investors. According to Bloomberg, the SEC is easing the rules concerning the reporting of client crypto holdings by banks. This development marks a significant shift in the regulatory environment and could have substantial implications for the cryptocurrency market.
Implications of Eased Reporting Rules
The Bloomberg report indicates that the SEC has opened a path for banks and brokerages to avoid reporting their customers’ crypto holdings on their balance sheets. However, these institutions must mitigate the risks these assets pose to bypass the controversial crypto accounting guidance that has been a target of Congressional scrutiny.
SEC staff have begun issuing guidance that specific arrangements may not necessitate reporting liabilities on balance sheets under the staff guidance issued two years ago. This move is a positive step for the crypto market, potentially alleviating regulatory pressures on banks and brokerages.
Potential for BTC Rebound
As this news filters into the market, BTC could see a rebound. The rebound could build on the recovery after last week’s price correction triggered by a significant Bitcoin selloff by Germany.
🇩🇪 While Germany is selling their #Bitcoin, El Salvador is buying more Bitcoin every day 🇸🇻 pic.twitter.com/XKnscuxwBA
— Bitcoin Magazine (@BitcoinMagazine) July 11, 2024
Analyzing the charts, Bitcoin is rangebound between the $58,489 resistance level and the $55,819 support level. The impact of the SEC’s easing rules could push BTC through the $58,489 resistance, setting the stage for a potential rally toward $62,823 in the short term.
A Possible Retest of Support
However, if BTC fails to maintain momentum, mainly due to the typically low trading volumes over the weekend, the $55,819 support level could come into focus. A breach of this support could lead to a further decline, with Bitcoin price possibly testing the July 8 low of $54,291. Another scenario to consider is Bitcoin continuing to trade within the current range of $58,489 resistance and $55,819 support for the better part of the weekend.
Outlook: Bullish Breakout on the Horizon?
Among these scenarios, the odds favor a bullish breakout through the $58,489 resistance, especially given the significant implications of the SEC’s decision to ease bank reporting rules. This regulatory shift could enhance institutional confidence and participation in the crypto market, boosting Bitcoin’s price.
A Recap on BTC
While Bitcoin has shown some weakness in the past 24 hours, the easing of regulatory pressures by the SEC offers a positive outlook. Should BTC break through the current resistance level at $58,489, it could pave the way for a solid rally to $60k. This highlights the importance of staying attuned to regulatory changes and their impact on the market.
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