It was an uneventful day for Bitcoin on Wednesday, with Bitcoin gaining just 1.39% to end the day at $10,109.5, the only good news for Bitcoin investors being the fact that Bitcoin managed to recover from sub-$10,000 levels by the close.
With the negative sentiment towards the cryptomarkets now continuing for a 4th consecutive week, Bitcoin has seen its market cap fall from $200bn plus levels to $171.55bn at the time of writing, while investor appetite for Ethereum has seen some improvement, though Ethereum’s market cap is still some way off Bitcoin at the moment.
A lack of news has left the markets relatively flat, with the end of 2017 and first week of January euphoria that continued to drive the cryptocurrencies to record levels now absent, the only factor for investors to consider being possible negative news hitting the news wires on a daily basis.
Interestingly, following the news of the SEC issuing subpoenas, news hit the wires in the early hours of this morning of the SEC and CFTC Chairmen being called to give testimony to the Senate Committee on banking, housing and urban affairs.
With the cryptomarkets now in the spotlight, the number of fraud cases and thefts have been hitting the wires on a more frequent basis, so it comes little surprise that the U.S government will want to get a handle on things before the cryptomarket spirals out of control.
The cryptomarket has yet to balk at the prospects of the testimony, with both Chairmen unlikely to be too supportive of the cryptomarket as we know it today, while they will both likely concede that, with the current size, there’s no immediate risk to the financial system.
We will expect the Senate Committee to begin establishing regulations for the market however, with now being the time before the market grows to a level where it would be almost impossible to reign in.
That should be good news for the longer-term investor and other governments will likely take a leaf out of the Senate’s book and look to impose similar regulations once they are rolled out in the U.S.
At the time of writing, Bitcoin was down 0.88% to $10,059.38, recovering from an intraday low $9,836, though Bitcoin’s ranges have continued to fall, with $11,000 levels a distant memory Bitcoin investors.
Those on the side lines, and there are many, will be waiting for sentiment to shift and that may take some time, with investors having to wait until the 6th February to learn whether the SEC will begin rolling out regulations that can have a material impact on the U.S cryptomarket.
With Cboe’s Bitcoin futures February contract sitting at $10,030, there’s certainly no support coming from the futures market, which shouldn’t be a surprise, suggesting that Bitcoin will likely remain under pressure through the day, testing sub-$10,000support levels.
Bitcoin will need to close above $10,000 for any hopes of a move back to higher ranges, but it’s looking bearish for now.