Last week, U.K. lawmakers characterized crypto trading as gambling. The regulatory overhang on Bitcoin (BTC-USD) and ethereum (ETH-USD) failed to hurt prices in the last week. But it does indicate the regulation of crypto trading looms.
Bitcoin’s monster rally from $16,500 in Jan. to over $30,000 is stalling. This month, BTC settled at around $27,100. Crypto is ready to tackle government regulations ahead. Similarly, Coinbase (COIN) held the $60 support zone since Feb. Investors are bracing for the SEC’s restrictions on the platform to play out.
In the weeks ahead, interest rates are the biggest influence on BTC prices. Interest rates have a direct impact on stock market trading action. Stock prices indicate market sentiment for risk. S&P 500 (SPY) rose by 1.71% in the last week. More impressive is Nasdaq’s (QQQ) 3.53% weekly gain.
If markets hold their levels as profit-taking looms, the stock index will give Bitcoin the confirmation it needs to resume its rally.
Risk
Bitcoin may trade at lower lows in the months ahead. This pattern will depend on markets moving money out of stocks into money market funds. Some funds pay nearly 5% risk-free. This will deter investors from the stock market. Crypto investors may park their funds in Bitcoin and ethereum. They will continue to hold digital currency as a hedge against fiat currencies.
