Decentral Block Post

Bitcoin (BTC) is leading the cryptocurrency markets on the path to recovery. Although the United States Consumer Price Index (CPI) print for January was marginally higher than expectations, it did not dent the enthusiasm of bullish crypto trader.

A positive response to seemingly negative data is a sign that the sentiment is bullish and traders are looking for buying opportunities.

However, some analysts are cautious due to the strengthening of the U.S. dollar index (DXY). They believe that a sustained rally in the DXY could limit the upside in cryptocurrencies.

Usually, long-term downtrends are followed by a base formation. During this phase, several analysts remain skeptical about a rally but the price action continues to surprise them. Although data is important, short-term traders should focus more on price action and devise a suitable strategy.

What are the critical levels to keep an eye on? Let’s study the charts of the top-10 cryptocurrencies to find out.

The United States Securities and Exchange Commission (SEC) has started ramping up its crackdown on the crypto industry and recent enforcement actions had a negative impact on crypto prices last week and at the start of this week. 

The SEC is focusing on stablecoin issuers. The most recent SEC stablecoin crackdown was on Feb. 13 through the issuance of a Wells Notice to Paxos Trust Company, the issuer of Binance USD (BUSD). While Paxos denies that BUSD is a security, which would place it outside the SEC’s jurisdiction, some lawyers say the answer is not so simple, which creates fear that other top stablecoin issuers like Circle’s USD Coin (USDC) could be next.

The SEC is also putting crosshairs on centralized exchanges (CEX) by questioning how they can use customer funds as qualified custodians. On Feb. 15, a five-member SEC panel will vote on whether to make it more difficult for crypto firms to hold digital assets.

Centralized staking platforms have also come under the SEC’s microscope and because staking programs provide investors with yield, the SEC believes these offerings are securities. On Feb. 9 the SEC began its assault on these programs by reaching a $30 million settlement over Kraken’s earn program.

Interestingly, traders have not adopted a fully risk-off position to the recent SEC activity, and certain decentralized solutions like GMX (GMX), Lido (LDO) and Maker (MKR) are soaring.

The United States Securities and Exchange Commission (SEC) has started ramping up its crackdown on the crypto industry and recent enforcement actions had a negative impact on crypto prices last week and at the start of this week. 

The SEC is focusing on stablecoin issuers. The most recent SEC stablecoin crackdown was on Feb. 13 through the issuance of a Wells notice to Paxos Trust Company, the issuer of Binance USD (BUSD). While Paxos says that BUSD is not a security and thus outside the SEC’s jurisdiction, some lawyers say the answer is not so simple, which creates fear that other top stablecoin issuers like Circle’s USD Coin (USDC) could be next.

The SEC is also putting crosshairs on centralized exchanges (CEX) by questioning how they can use customer funds as qualified custodians. On Feb. 15, a five-member SEC panel will vote on whether to make it more difficult for crypto firms to hold digital assets.

Centralized staking platforms have also come under the SEC’s microscope and because staking programs provide investors with yield, the SEC believes these offerings are securities. On Feb. 9 the SEC began its assault on these programs by reaching a $30 million settlement over Kraken’s earn program.

Interestingly, traders have not adopted a fully risk-off position to the recent SEC activity, and certain decentralized solutions like GMX (GMX), Lido (LDO) and Maker (MKR) are soaring.

Matter Labs, the firm managing Polygon (MATIC), announced that the beta version of its zero-knowledge Ethereum Virtual Machine (zkEVM) would launch on March 27, 2023. It’s possible that Polygon will enjoy a first-mover advantage in this space by launching a public mainnet before zkSync and Scroll.

Zk-based roll-up technology is accepted as the gold standard for scaling. The existing optimistic-based roll-ups like Arbitrum and Optimism have EVM capability but are less secure because they are “fraud-proof.” Malicious transactions on an optimistic roll-up can stay valid for up to seven days or more before being reversed. Thus, giving an advantage to zk-technology.

Moreover, the Ethereum (ETH) community’s focus on Liquid Staking Derivatives may shift toward L2 networks after the anticipated Shanghai upgrade in March. This is because the update following Shanghai, EIP-4844, will reduce the cost of L2 roll-ups by 10 to100 fold. A working zk-based roll-up solution will likely attract new projects to its ecosystem.

Polygon has built a strong bullish narrative in the market with the upcoming zkEVM launch. The team’s efforts in the Web3 space are promising and show signs of increasing activity. The growth in its DeFi ecosystem has stalled, which could likely stay this way for more extended periods.

Technically, the market structure for Polygon looks bullish. However, the recent 78% increase in MATIC’s price since the start of 2023 could see a correction as speculative buying cools down. Such a situation could possibly provide an ideal entry in MATIC for a swing trade.

Matter Labs, the firm managing Polygon, announced that the beta version of its zero-knowledge Ethereum Virtual Machine (zkEVM) would launch on March 27, 2023. It’s possible that Polygon will enjoy a first-mover advantage in this space by launching a public mainnet before zkSync and Scroll.

Zk-based roll-up technology is accepted as the gold standard for scaling. The existing optimistic-based rollups like Arbitrum and Optimism have EVM capability but are less secure because they are “fraud-proof.” Malicious transactions on an Optimistic Rollup can stay valid for up to seven days or more before being reversed. Thus, giving an advantage to zk-technology.

Moreover, the Ethereum community’s focus on Liquid Staking Derivatives may shift toward layer-2 networks after the anticipated Shanghai upgrade in March. This is because the update following Shanghai, Ethereum Improvement Proposal 4844, will reduce the cost of L2 rollups by 10–100-fold. A working zk-based rollup solution will likely attract new projects to its ecosystem.

Polygon (MATIC) has built a strong bullish narrative in the market with the upcoming zkEVM launch. The team’s efforts in the Web3 space are promising and show signs of increasing activity. The growth in its decentralized finance (DeFi) ecosystem has stalled, which could likely stay this way for more extended periods.

Technically, the market structure for Polygon looks bullish. However, the recent 78% increase in MATIC’s price since the start of 2023 could see a correction as speculative buying cools down. Such a situation could possibly provide an ideal entry in MATIC for a swing trade.

Bitcoin (BTC) hit its highest in almost a week on Feb. 15 as “extremely positive” economic data boosted risk asset sentiment.

BTC’s price aims for $23,000

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD gaining 2.2% on the day to eye a reclaim of $23,000.

Analysts were already predicting volatility, with the latest economic numbers from the United States delivering a pleasant surprise.

Retail sales and the Empire State Manufacturing Index both surpassed market expectations, showing a more resilient economy despite restrictive policy at the Federal Reserve.

“Extremely positive numbers. Core Retail Sales and Retail Sales both smash expectations, while also Manufacturing Index more positive than expected,” Cointelegraph contributor Michaël van de Poppe, founder and CEO of trading firm Eight, reacted.