Fed Chairman Calls for Proper Regulation of Cryptocurrency as Bitcoin Price Surpasses $20,000
- Bitcoin price breaks above $20,000 after breaking out of a symmetrical triangle.
- Fed Chairman Jerome Powell believes that a lot of thought needs to be given to the regulation of cryptocurrencies.
- Crypto assets require the same risk and regulation to level the playing field and avoid the disadvantages of regulatory evasion.
- The price of bitcoin could reach $20,900 if investors avoid early profit taking for the sake of a long-term bullish outlook.
Bitcoin price is trying highs above $20,000 on Tuesday after holding support at $18,800 for almost four days. Green shoots are visible across the market, led by Uniswap’s price rising 16.70% to $6.60. The price of Ethereum is trading around $1,400 while XRP managed to climb just 1.30% to $0.47.
The rise in the crypto market coincides with a speech by Federal Reserve Chairman Jerome Powell “on the opportunities and challenges of financial tokenization” at the Louvre in Paris, France.
Cryptocurrency is a new technology that needs proper regulation – Jerome Powell
This year, central banks around the world have been tested for the impact of the COVID-19 pandemic, dynamic geopolitics, and the war between Ukraine and Russia. Addressing the Paris conference, Powell said that the normalization of monetary policy has exposed key structural problems within the decentralized financial system (DeFi).
The US Fed chairman added that all governments should approach DeFi regulation with caution and thought. In other words, the appropriate rules must be implemented to deal with the new technology.
“There should be the same risk for crypto assets, the same regulation,” Jerome Powell.
Regulation is a means to level the playing field and avoid the dangers of regulation evasion. Powell felt there was still a lot of work to be done on traditional and digital assets, especially when it comes to stablecoins. Stablecoin issuers have shown interest in reaching a wider audience. However, this raises the question of whether there is sufficient regulatory oversight for wider use.
Bitcoin Rewards Patient Investors
Cryptocurrency investors have been forced this year to muster up the courage to endure frequent setbacks and little to no growth. The price of the largest cryptocurrency recently fell to $18,200 and then returned to $19,500.
However, profit taking, investor skepticism, and external forces related to inflation and geopolitical shifts have pushed the price of bitcoin to $18,800. On the other hand, the price of bitcoin has finally priced in a potential breakout of the symmetrical triangle, rising to $20,350.
Bitcoin (BTC/USD) 4-hour chart
Source: Tradingview, FXStreet.
This could be a big momentum if higher support, preferably at the 200-day SMA, continues. The OBV (On Balance Volume) claims that the bulls have the upper hand and could easily push the Bitcoin price to complete the 9.54% triangle breakout at $20,900.
On the other hand, the risk of a pullback is always obvious in overbought conditions, as shown by the stochastic oscillator. Short-term Bitcoin traders should consider taking profits at $20,900 to avoid a possible trend correction to $19,500 and $18,800 respectively.
Article by John Isige, FXStreet
The opinions expressed here are solely those of the author and do not necessarily reflect the views of Forex Quebec. Every investment and trading move involves risk, so you should do your own research when making a decision.
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