17.12.202107:15 Forex Analysis & Reviews: US Senator calls on regulators to "clamp down" on stablecoins and DeFi

Ether settled above the support level of $3,680 and broke through $3,910, heading towards the key resistance level of $4,140. Bitcoin is still hovering around $46,900.

Senator Elizabeth Warren

Before we proceed with technical analysis of these two trading instruments, I'd like to say a few words about Senator Elizabeth Warren's recent statement. She called on regulators to crack down on decentralized finance (DeFi) and stablecoins "before it's too late."

"DeFi is the most dangerous part of the crypto world. This is where the regulation is effectively absent and — no surprise — it's where the scammers, the cheats, and the swindlers mix among the part-time investors and first-time crypto traders," Warren said in a statement. During a hearing of the Senate Banking, Housing, and Urban Affairs Committee, the senator brought up stablecoins, claiming their spread "could ultimately crash our whole economy." Based on Tether's report, Warren pointed out that "only about 10% of the assets backing its stablecoin are real dollars in the bank. 90% is something else — not real dollars." In addition, she stressed that the report "is not actually verified by a comprehensive audited financial statement or verified by any government regulator."

The senator suggested that stablecoins are not as stable as they seem. "In troubled economic times, people are most likely to cash out of risky financial products and move into real dollars. Stablecoins will take a nosedive precisely when people most need stability."

She summarized: "Stablecoins provide the lifeblood of the DeFi ecosystem. In DeFi, people need stablecoins to trade between different coins, to trade derivatives, to lend and borrow money – all outside the regulated banking system. Without stablecoins, DeFi comes to a halt."

Solana Ventures

Meanwhile, Solana Ventures, the investment arm of Solana Labs, announced the creation of a new investment fund to support Web 3 game builders. Partnering with Forte, a company that provides tools for blockchain integration into games, and Griffin Gaming, a venture capital firm that invests in the global gaming market, Solana Ventures will launch a $150 million funding initiative.

As a result, the SOL token skyrocketed. However, it is important to understand that the creation of such funds is a time-consuming process that could last for decades. Anyway, this is good news.

The fund seeks to bring more gaming-related developments to Solana after the rise in such applications over the past few months, attracting a wider audience to the concept of the metaverse.

Notably, this is not the first fund dedicated to gaming and Web3 that Solana Ventures has launched. The firm has already funded similar metaverses-related initiatives. The first one was launched in November, in partnership with FTX and Lightspeed, and allocated $100 million for the same purpose.

Technical analysis of BTC

The flagship cryptocurrency is still traded in a sideways channel. Buyers should push the price to $51,660 and break through it. If so, the coin may head towards $55,730 and even to $59,400. In such a case, the downtrend as of December 3 may end. Alternatively, BTC is likely to come under pressure after a breakout at $46,900, with the target seen at $42,300. However, an increase in long positions at around $46,900 and consolidation in this area could attract new investors to the market – a bullish signal.

Technical analysis of ETH

Bulls regained control over the level of $3,912. Their task now is to consolidate above this range. Demand for the token should increase every time the price approaches this level so that bulls could go above $4,140. If there is a lack of bull activity at $3,912, ether may return to $3,680. If so, the uptrend is highly likely to end. In such a case, bulls should protect the level of $3,680. Otherwise, it will be a bad sign for bulls at the end of the year. At the same time, if the price breaks through $4,140, the targets are seen at $4,404 and $4,647.