Smart Money Remains Indifferent to Price Swings; New Legislation Proposed

Chart of the Day





On Tuesday, the broader crypto market took a plunge alongside major U.S. stock indices after the U.S. Federal Reserve hinted at the possibility of reducing its balance sheet at an accelerated pace. BTC dropped by 3% after the news first broke, but has since moved to consolidate its losses near the $45k handle. A key bearish trendline with an upper bound near the $46.6k level is taking shape on BTC's hourly chart. The largest crypto by market cap must stay above the $45k support to prevent any further downside corrections. On a separate but related note, analyst Alex Thorn observes that, for the first time in history, a BTC bull run has not been accompanied by a corresponding spike in transaction fees. He attributes the current low-fee environment to the high adoption rates of Segwit, as well as the development of the Lightning Network.

Moving away from BTC, ETH has retraced to the $3,300 level after shedding 4.5% of its market value in a matter of hours. Many major altcoins are also deep in the red, with most top L1 tokens posting 4% losses on average within the past 24 hours. However, it appears that smart money are remaining indifferent to these price swings. For one, MicroStrategy just recently bought another $190 million worth of BTC at an average cost of $45,714. With this purchase, the software firm now owns a total of more than 129k BTC. Based on the latest BTC spot price, the value of the BTC they own is now worth more than the company's entire market cap. Within the NFT market, the daily NFT trading volume looks to be staging a comeback after suffering a disappointing month of March, with the total NFT trading volume for Q1 2022 now crossing into the $12 billion mark. 





Talk of the Town





The U.S. House of Representatives are mulling over the introduction of legislation that aims to shield the U.S. financial system and investors from exposure to excessive risk due to El Salvador's rapid adoption of BTC as legal tender. The bi-partisan House bill, titled the Accountability for Cryptocurrency in El Salvador Act, will accompany another senate bill of a similar name and nature that was introduced in February (and that has recently passed committee) to safeguard the U.S. financial system against El Salvador's "careless gamble that is destabilizing the country".