Looking to the Futures

January Bitcoin Futures (/BTCF26) attempted to extend its 3-day bounce on Thursday but was met with resistance as price action began to fizzle out. The contract settled at 95,355 on Thursday, down from Wednesday's settlement of 97,965. /BTC has had an encouraging week thus far for long traders, reclaiming the 50-day Simple Moving Average and the $95k price level. Momentum was stalled on Thursday however, potentially due to a vote on a key crypto legislation bill being rescheduled unexpectedly. 

Late Wednesday, the Senate Banking Committee announced they would be postponing a vote on the crypto market structure legislation due to controversy over some of the latest additions to the bill that were released on Monday. 

This bill known as the Clarity Act, is intended to finally establish a clear, comprehensive federal regulatory framework for digital assets in the United States. The Clarity Act was passed last July by the U.S. House of Representatives, and since then has been working its way to through the Senate. 

Despite largely bipartisan support on the need for this regulation and clarity, one of the main points of contention has been between crypto industry and bank leaders over Stablecoin rewards and interest. After the amended release on Monday, crypto industry leaders argued that the changes tilted the legislation further to benefit traditional finance and banks. Banks have long opposed holders of Stablecoins being eligible to receive interest, so crypto companies could circumvent these rules by offering crypto rewards instead of interest for holding these products. This recent change on Monday limits that ability, however. 

Traditional financial firms are worried that if crypto exchanges can offer these rewards, it could lead to large scale bank withdrawals and a potential credit squeeze. One Fed report suggested that there could be a credit squeeze of hundreds of billions to as much as $1.2 trillion if exchanges could offer stablecoin interest to investors. On the other hand, crypto firm leaders argue that if some kind of reward cannot be offered, investors will look towards offshore platforms and innovation will ultimately be stifled. 

Despite this newfound roadblock, political and industry leaders are confident that a resolution can be made as Senate Banking Committee Chairman Tim Scott stated, "everyone remains at the table working in good faith". No new date has been set for the rescheduling of the vote as negotiations will continue over the next couple weeks and potentially months. 

Bitcoin and precious metals have taken off this week in response to the recent uncertainty over the Fed's independence with Fed Chair Jerome Powell's criminal investigation and slightly cooler than expected CPI numbers which have added some pressure on the dollar. After a rather disappointing year for Bitcoin, which saw its price drop roughly 33% after reaching all-time highs in early October, the largest cryptocurrency will look to continue its recent day trend as it tries to stabilize around $95k and potentially push back towards $100k if momentum can endure. 


 

Looking at the daily chart for /BTCF26, prices declined on Thursday settling at 95,355, still comfortably above the 20 and 50-day Simple Moving Averages at 90,217 and 92,164. Prices continue to remain well below the 100 and 200-day Simple Moving Averages which sit around the 103-104k levels. The 14-day RSI closed at 57.0191, indicating moderate bullish momentum but not in overbought conditions yet. Volume has increased so far this week but was slightly lower on Thursday with 7,883 contracts traded, below the 50-day average of 9,197.72. 

20-Day SMA:          90,217

50-Day SMA:          92,164

100-Day SMA:        102,974

200-Day SMA:        104,221

14-Day RSI:             57.0191

Volume Avg (50-day):       9,197.72

9:15 AM ET - Industrial Production

9:15 AM ET - Capacity Utilization

10:00 AM ET - Home Builder Confidence Index

10:50 AM ET - Boston Fed President Susan Collins Opening Remarks

11:00 AM ET- Richmond Fed President Tom Barkin Speaks

11:00 AM ET - Fed Vice Chair for Bank Supervision Michelle Bowman Speaks

3:30 PM ET - Federal Reserve Vice Chair Philip Jefferson Speaks

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