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Bitcoin has recently found support in the $16,300 area, but has not been able to cross the psychological level of $17,000.
This consolidation in the middle of the $15600-18150 range is likely to continue. We need a fundamental driver in order to leave this range. There is some hope in this regard since we have the FOMC minutes, although the document should contain very bright hints of a slowdown in the Federal Reserve's rate hike.
Today, the crypto community is discussing both local preconditions for the bear to bull transition, as well as criticism of Bitcoin combined with legitimate warnings from regulators. But first things first.
Cryptocurrency analyst Kevin Svenson draws attention to the fact that the weekly relative strength index (RSI) of Bitcoin is close to taking out its diagonal resistance. This fact indicates that BTC bulls are starting to gather some momentum.
"Bitcoin is very close to a possible bullish weekly RSI breakout that would end the two-year-long RSI resistance downtrend. Are green candles coming sooner than we think?"
Svenson explains the importance of a potential RSI breakout by saying that perhaps this is one of the most pivotal moments for Bitcoin in the entire bear market.
According to the analyst, a weekly RSI breakout could signal a big trend shift for BTC.
"This RSI signal, if we do get it in the next couple of weeks, could actually change the entire trend moving forward."
Svenson adds that a weekly RSI breakout also took place toward the end of BTC's bear market in 2018. He emphasizes that with the weekly growth of the RSI, Bitcoin is "positioned for a possible major move up."
Should the RSI take out its long-term resistance, the crypto analyst predicts that BTC could rally to as high as $21,000.
While some analysts are looking for local reversal signals, debates concerning Bitcoin's actual purpose have persisted.
A well-known critic of cryptocurrencies, Peter Schiff, believes that Bitcoin failed as any form of asset, including a safe haven asset, a store of value, or a risk-on investment instrument.
According to the economist and gold advocate, Bitcoin does not bring the same value compared to the risk that investors have to take every time they expose themselves to cryptocurrencies.
Schiff believes that instead of being exposed to the risks of the cryptocurrency industry, investors should select "better" substitutes. He does not see a recovery in the industry in the foreseeable future.
Bitcoin enthusiasts and fans were quick to disagree with the well-known crypto critic and said that the main cryptocurrency is much more valuable than a tool for influencing risks.
According to some pro-Bitcoin specialists and researchers, the main cryptocurrency will eventually replace fiat currencies that are constantly losing value.
In response, Schiff stated that Bitcoin cannot act as a safe haven because people lose more money on BTC than on any other category of assets.
It is worth noting that although he is technically correct when he discusses the performance of Bitcoin over the past year, it's vital to remember that over the next five to ten years, Bitcoin and a number of other cryptocurrencies would be significantly more rewarding than any other type of investment.
The Federal Reserve, the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) warned banks about the risks involved with crypto in a joint statement.
Regulators have highlighted several red flags for those who want to delve into cryptocurrency-related activities, even though the statement notes that banks are not prohibited from doing business with organizations operating within the law.
The statement was sent after a turbulent year for cryptocurrencies, which, according to detractors, revealed potential systemic flaws.
The federal prosecutor's office claims that the defunct FTX website was corrupt from the very beginning and advertised as an entry point for cryptocurrency. These widely publicized failures, together with falling prices and lingering concerns about the security of decentralized financial platforms, have led cryptocurrencies to what the market calls a "crypto winter."
The list of dangers highlighted the possibility of fraud and dishonest business practices, as well as the vulnerability of stablecoins to banking transactions. The factors mentioned in the statement include ambiguous foreclosure rights and unclear storage procedures for cryptocurrency businesses.
"Given the significant risks highlighted by recent failures of several large crypto-asset companies, the agencies continue to take a careful and cautious approach related to current or proposed crypto-asset-related activities and exposures at each banking organization," the agencies said in a statement.
Recently, regulators have tried to impose investor protection measures through actions such as President Joe Biden's March executive order and the recommendations of the federal agency to stop unauthorized use of digital assets.
The US Financial Stability Oversight Council, which consists of the heads of all major federal financial regulatory agencies and is headed by Treasury Secretary Janet Yellen, unanimously approved a report in October stating that activities related to crypto assets pose stability risks if trading in them expands without additional regulation.
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