Bitcoin closed up three out of seven sessions last week and maintained the upward bias! Bitcoin price is below $22,000 currently. A glance at the daily chart reveals Bitcoin has reversed its climbing after coming close to testing the Fibonacci 23.6 resistance level. The price is declining currently toward the resistance line it breached above last week, returning to the recent trading range. Continuing uptrend momentum will take it again to Fibonacci 23.6 resistance!
Bitcoin is retracing lower after Wednesday news Tesla sold most of its Bitcoin holding. And as traders are expecting the Federal Reserve will raise rates by 75 basis points at its policy meeting this Wednesday after the US reported inflation at a new four-decade high of 9.1% last week, US legislators are close to finalizing legislation on cryptos that includes stringent capital requirements while UK Markets Bill proposes extending banking rules to crypto assets.
Tesla sold $936 million worth of bitcoin, or 75% of its holdings in the second quarter, according to the company earnings report. Tesla ended the second quarter with just $218 million in bitcoin, down from $1.26 billion in the previous three quarters. Elon Musk however said during the company conference call he remains open to adding to the company’s bitcoin holdings again in the future.
US legislation still being negotiated will require that companies issuing stablecoins be subject to bank-like regulations and back their tokens with conservative assets. Stablecoins should be directly backed with assets such as cash and US Treasury bonds while firms issuing them would also have to maintain capital, liquidity and open themselves to agency supervision. short-term repurchase agreements – highly liquid transactions in government securities – may be used as backing for stablecoins in the stringent new reserve requirements.
The UK introduced markets bill last week which extends and modifies existing rules for banking and payment systems to cover digital assets. Cryptocurrencies are referred to as “digital settlement assets” in the bill and the rules will largely apply to stablecoins – cryptocurrencies whose prices are pegged to another asset, such as the US dollar.