Crypto News Today: Bitcoin Gets a Food Boost While S&P Flags USDT Concerns

Key Insights:

• BTC rallied 3.47% on Wednesday, ending the session at $42,954.
• Dovish FOMC Projections drove buyer demand for BTC and the broader market.
• On Thursday, crypto-spot ETF-related updates and regulatory scrutiny remain focal points.

Bitcoin Strikes a Wednesday High of $43,554 on Dovish Fed Projections

Bitcoin (BTC) rallied 3.47% on Wednesday. Following a 0.55% gain on Tuesday, BTC ended the session at $42,954.

On Wednesday, the US Fed left interest rates unchanged at 5.50%. The FOMC projections revealed a less hawkish 2024 Fed rate path than the September forecasts. The Fed also revised 2024 growth forecasts, down modestly from 1.5% to 1.4%. A less hawkish Fed rate path and expectations of avoiding a soft landing were a boon for riskier assets.

Notably, BTC reached a session high of $43,554 before experiencing a partial retracement.

Crypto Spot ETF Approval Window Approaching

On Wednesday, crypto-spot ETF-related updates warranted investor attention. Cash Creates was the focal point. Blackrock (BLK), Fidelity, and others previously met with the SEC to push for In-Kind Creates. However, recent updates suggest issuers may need to file amendments to adopt Cash Creates.

In-kind Creates means payments are in BTC rather than US dollars.

Bloomberg Intelligence ETF Analyst Eric Balchunas shared updates relating to the Invesco filing, saying,

“Invesco is committing to cash creates only, as per their just-updated S-1. Pretty big clue that SEC is dug in on only letting cash create ETFs out in first run (which is what we hearing back channel as well). Still, many were waiting to see if BlackRock could sway SEC on in-kind.”

Bloomberg Intelligence ETF Analyst James Seyffart responded to the Invesco news, saying,

“I think everyone is gonna have to bend the knee to cash creates and redeems.”

With the January 5-10 approval window approaching, a flurry of application amendments is likely.

There were also updates relating to ETH-spot ETF applications. Overnight, James Seyffart shared the latest on ETH-spot ETFs, saying,

“Update: SEC delayed Invesco/Galaxy Ethereum ETF application. This was early but completely expected. (Wasn’t due until Dec 23rd I think).”

Other News

S&P Global Ratings announced the launch of a stablecoin stability assessment on Tuesday. The ratings agency assessed eight stablecoins: DAI, FDUSD, FRAX, GUSD, USDP, USDT, TUSD, and USDC. Assessments relate to the ability to maintain its peg to a fiat currency, ranging from 2 (strong) to 5 (weak).

S&P assessed three stablecoins as strong: USDC, USDP, and GUSD. However, the agency also rated three stablecoins constrained: DAI, FDUSD, and USDT. Significantly, S&P assessed FRAX and TUSD as weak.

Technical Analysis

Bitcoin Analysis

BTC held above the 50-day and 200-day EMAs, sending bullish price signals.

A BTC break above the Wednesday high of $43,554 would support a move to the December high of $44,747 and the $45,000 handle.

The focal points include SEC activity, regulatory chatter, US lawmaker scrutiny, and BTC-spot ETF-related news.

However, a fall through the $42,900 support level would bring the 200-day EMA into play.

The 14-Daily RSI reading, 69.26, shows BTC on the overbought border. Selling pressure could intensify at the $43,000 handle.

Ethereum Analysis

ETH remained above the 50-day and 200-day EMAs, affirming bullish price signals.

An ETH break above the $2,300 resistance level would support a move to the December high of $2,403.

However, a drop below the $2,200 handle would bring the $2,143 support level into play.

The 14-period Daily RSI at 58.16 indicates an ETH move to the $2,300 resistance level before entering overbought territory.