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The total crypto market capitalization rejected at $1.13 trillion on Feb. 16, but there was no change in the month-long ascending channel structure. More importantly, this level represents a 43% gain in 2023, which is far from the $3 trillion level achieved in Nov. 2021. Still, the current recovery is notable. 

As shown above, the ascending channel initiated in mid-January has left some room for a 10% correction down to $1 trillion without breaking the bullish formation.

Investors reacted positively to the 5.6% year-on-year U.S. CPI inflation increase on Feb. 14 and the 3% retail sales monthly growth on Feb. 15. Bitcoin (BTC) had the biggest positive impact on the total crypto capitalization as its price gained 12.5% on the week.

One area of concern is a Feb. 16 story on Binance.US financial transactions to Merit Peak, a trading firm managed by CEO Changpeng Zhao. Interestingly, Reuters reported that a Binance.US spokesperson said Merit Peak was "neither trading nor providing any kind of services on the Binance.US platform."

The 10.1% weekly increase in total market capitalization was held back by the modest 1.8% gains from BNB and the XRP 2.5% price increase. On the other hand, only 3 out of the top 80 cryptocurrencies finished the week with negative performances.

The United States Securities and Exchange Commission’s (SEC's) lawsuit against Terraform Labs and its co-founder Do Kwon could be seen as an SEC “roadmap” to taking down other stablecoins, according to a lawyer.

Gabriel Shapiro, general counsel at investment firm Delphi Labs, explained to his 33,800 Twitter followers on Feb. 16 that the SEC’s arguments in its complaint against Kwon and Terraform were “more thorough than usual.”

Shapiro’s analysis follows the SEC’s Feb. 16 lawsuit against Kwon and Terraform alleging they “orchestrat[ed] a multi-billion dollar crypto asset securities fraud involving an algorithmic stablecoin and other crypto asset securities.”

Shapiro suggested the case could serve as a “roadmap” for how the regulator may sue other stablecoin issuers in the future. He acknowledged the SEC made the case that Terra’s algorithmic stablecoin, TerraClassicUSD (USTC), constitutes a security:

“[The SEC] will allege that integration, promotion, marketing, commercial deals etc building the stablecoin ecosystems are ‘efforts of others’ that are ‘reasonably expected’ and can lead to profits in connection with the stables.”

Only days after reports of United States regulatory scrutiny of Paxos and Binance USD (BUSD), cryptocurrency exchange Binance has minted nearly $50 million worth of TrueUSD (TUSD).

The transaction took place on Feb. 16, according to data from Etherscan, and also comes two days after Binance CEO Chanpeng 'CZ' Zhao said in a Feb. 14 Twitter Spaces that Binance would look to “diversify” its stablecoin holdings away from BUSD.

Despite minting nearly $50 million in TUSD from the TrustToken platform’s smart contract on Feb. 16, CZ had earlier said the recent regulatory action by the United States Securities Exchange Commission (SEC) and the New York Department of Financial Services (NYDFS) over the long term may lead to a fall in the dominance of U.S. dollar-backed stablecoins.

“I think with the current stances taken by the regulators on the U.S. Dollar-based stablecoin, the industry will probably move away to a non-U.S. Dollar-based stablecoin, back to algorithmic stablecoins.”

“There’s multiple agencies putting applied pressure there. It is just going to shrink the U.S. Dollar-based stablecoin market,” he added.

In this week’s episode of Market Talks, Cointelegraph welcomes Michaël van de Poppe, a full-time day/swing trader in cryptocurrencies based at the Amsterdam Stock Exchange who’s interested in everything related to blockchain in combination with the current financial system. He is also the CEO and founder of Eight Global, a cryptocurrency education and consultancy platform.

We kick things off by getting van de Poppe’s take on the current market and how he’s feeling about things at the moment. 

Generally, everyone’s views on external macro factors that impact crypto prices are mostly United States-centric. Since van de Poppe is based in Amsterdam, we find out what other macro and geopolitical factors he regularly considers when assessing the markets.

After the news about the U.S. Securities and Exchange Commission cracking down on stablecoins and exchanges and also the not-so-hot Consumer Price Index (CPI) report, Bitcoin (BTC) made a move that was opposite to what many market participants were expecting. Van de Poppe shares hi thoughts and reasoning for this. 

We get into the nitty-gritty about van de Poppe’s approach to investing in altcoins and how the two large-cap cryptocurrencies, Bitcoin and Ether (ETH), impact his decisions, if at all. 

The U.S. Securities and Exchange Commission (SEC) wants to sue Paxos for issuing and listing stablecoin Binance USD (BUSD) to the benefit of its top-rival stablecoin Tether (USDT), whose market capitalization has risen to multi-month highs. 

BUSD market cap drops by $2 billion

The SEC asserts that BUSD, a U.S. dollar-backed stablecoin, is a security, noting that Paxos has violated investor protection laws by white-labeling it.

Related: Paxos ‘categorically disagrees’ with the SEC that BUSD is a security

Since Feb. 13 when the news broke, the BUSD market cap has lost roughly $2 billion, down to around $14 billion as of Feb. 16 — the lowest since January 2022. 

As Cointelegraph reported, Binance has seen its withdrawals and BUSD redemptions surge post-Paxos crackdown.

The Bitcoin (BTC) price rose to a new six-month high of $24,800 on February 16, registering a double-digit surge of 15%. 

The prolific single-day Bitcoin price surge took many by surprise, given February has been historically bearish for the top cryptocurrency. BTC price rose by $1,820 in a single day, making it the biggest green day for the top cryptocurrency in six months.

Many people attributed the BTC price surge to a number of factors, including a rise in dollar value and declining inflation. On-chain data indicates the current price momentum can be traced back to a mysterious fund that started pouring money into the crypto market on Feb. 10.

According to data shared by Lookonchain, nearly $1.6 billion in institutional funds have flowed into the crypto market over the past six days. The majority of the $1.6 billion fund flowed in the form of stablecoins, especially Circle-issued USD Coin (USDC). The owner of the funds first withdrew their USDC from Circle and then sent it to various exchanges.

There were three notable wallets whose funds were traced from Circle to various exchanges. First, a wallet address starting with “0x308F" withdrew 155 million USDC from Circle and transferred to exchanges since Feb 10. The second wallet address starting with "0xad6e" withdrew 397 million USDC from Circle and sent it to various exchanges, and a third wallet starting with “0x3356” withdrew 953.6 million USDC from Circle and transferred to exchanges in the same time frame.

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.

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.

On Feb. 13, Binance's native token, BNB, recorded its worst daily performance since November 2022, falling 8.5% to below $285. BNB price has since recovered to over $298, but its possibility of facing another selloff remains high. Let's take a look at a few reasons why. 

BNB price rising wedge breakdown

The ongoing decline in BNB's price came as a part of a broader rising wedge breakdown.

Notably, on Feb. 9, BNB broke out of its rising wedge pattern, a bearish reversal setup that forms as the price trends upward inside a range defined by two ascending, converging trendlines.

As a rule of technical analysts, a rising wedge's profit target is measured after subtracting the maximum distance between the pattern's upper and lower trendline from the breakdown point.

Therefore, BNB's rising wedge target comes to be near $250, down about 15% from current prices. Interestingly, the $250 level has also served as support in May, September and November 2022.

Ether (ETH), the second-largest cryptocurrency by market capitalization, has seen a constant decline in the exchange supply over the past six months post-Merge. Ethereum network went under a major network upgrade in September last year, moving from a proof-of-work (PoW) to a proof-of-stake (PoS) network and the event was called the Merge.

According to on-chain data shared by the crypto analytic group Santiment, the amount of available ETH sitting on exchanges continues to fall. Since the Merge, there is 37% fewer ETH on exchanges. A constant decline in supply on exchanges is considered a bullish sign as there is less ETH available to trade or sell.

There were a total of 19.12 million ETH worth $31.3 billion on exchanges in September before the Merge. The number has now declined to 13.36 million ETH worth $19.7 billion in the second week of February.

A major chunk of the ETH supply is being moved into self custody while many traders also prefer staking with the Shanghai upgrade just around the corner. Shanghai, Ethereum's upcoming significant update, is scheduled to launch in March. The Shanghai hard fork will integrate more improvement proposals for network enhancements and allow stakers and validators to withdraw their holdings from the Beacon Chain.

Currently, 16 million ETH, or 14% of the total supply, are staked in the Beacon chain. At the current price of ETH, it amounts to approximately $25 billion, a sizable amount that will gradually become liquid after the Shanghai hard fork.

The decentralized autonomous organization (DAO) behind Lido — the largest Ethereum staking pool — is deliberating whether it should sell or stake the $30 million in Ether (ETH) from its treasury.

A proposal was submitted on Feb. 14 by the DAO’s financial unit, Steakhouse Financial that considers four choices, one of which contemplates staking part or all of its ETH on Lido in the form of Lido Staked ETH (stETH).

Another would see LidoDAO selling a part or all of its 20,304 ETH for a stablecoin, with the purpose being to extend the DAO’s runway.

The proposal comes as ETH staking withdrawals will soon be enabled through Ethereum’s Shanghai and Capella upgrades expected to take place sometime in earl 2023 according to the Ethereum Foundation.

While converting the ETH to Staked ETH may lead to more protocol rewards, the DAO is wary that too much staking may risk it not having enough Ether on hand “in case of need.”

The crypto industry will “probably” start using euro, yen, or Singapore dollar based stablecoins in the future, reducing its reliance on US dollar based stablecoins, according to a Feb. 14 statement on Twitter Spaces by Binance CEO Changpeng Zhao, also known as “CZ.”

CZ gave the statement in answer to a question about the crypto industry using gold as a standard of value instead of the US Dollar. CZ agreed that it “makes sense” to use gold. However, “most people’s costs are still in fiat currencies.” For this reason, most people calculate their investment returns in dollars, which is why US Dollar backed stablecoins are “still important.”

However, CZ argued that the US government’s recent actions against US dollar stablecoins will probably lead the global crypto industry to rely on other currencies such as the Euro, Yen, and Singapore Dollar to back stablecoins, as he explained:

“I think given the current pressure and current stances taken by the regulators on the US Dollar based stablecoins, I think that as you said the industry will probably move away to non US dollar based stablecoins[...]as a result of this we probably will see more euro based or other Japanese yen, Singapore dollar based stablecoins, so it's actually prompted us to look for more options in different places.”

Related: SEC Lawsuit against Paxos over BUSD baffles crypto community

The price of Ether (ETH) declined 10.2% between Jan. 8 and Jan. 10, and has since been range trading near the $1,500 level. More importantly, on a broader time frame, Ether is down 52.5% in twelve months, which partially explains why derivatives metrics were somewhat neutral after Ether’s failed attempt to break $1,700 on Feb. 8.

Currently, investors' biggest concerns are the U.S. Securities and Exchange Commission's (SEC) lawsuits and enforcement actions against crypto firms, which included Kraken’s tanking of its-as-a-service program and PayPal reportedly pausing its stablecoin project due to regulatory concerns.

A crackdown by the SEC on crypto staking is expected to have unintended consequences for decentralized finance (DeFi), according to Jacob Blish, the head of business development at Lido DAO. Blish joined a growing number of people in the crypto industry calling for transparency in crypto sector regulation.

On the bright side, Ethereum developers announced the pre-launch of the Shanghai upgrade on the Zhejiang testnet. According to a blog post on Feb. 10, the transition is required to enable withdrawals from validators' staking positions. The Zhejiang test network is the first of three testnets that simulate Shanghai, which is expected to go live in March 2023, although a specific date has not been released.

Let's look at Ether derivatives data to understand if the $1,700 price rejection has impacted crypto investors' sentiment.

Cumulative NFT trading volume trended higher in January and data from a recent Delphi Digital report showed monthly volumes reaching an eight-month high above $1 billion.

The key factor that influenced NFT trading was Blur token airdrop on Feb. 14. Since its launch last year in Q3 2022, Blur has rewarded users with “care packages,” which can be redeemed for tokens starting Feb. 14 at 12 p.m. EST.

Many users have tried to farm these airdrops, increasing the platform's trading volume. Since the start of 2023, Blur’s trading volume has surpassed that of OpenSea, the market leader in the NFT trading space.

Airdrops often create excitement in the market of thrilled users who receive free money and FOMO from those who missed out. It’s likely that the next step for the Blur team will be to launch new liquidity mining campaigns, similar to Optimism, to retain its volume and users. Moreover, users will also move onto other opportunities in the space, similar to Blur. 

On-chain data shows whales are accumulating NFT tokens 

The top NFT trading platforms on Ethereum with a native token are LooksRare and X2Y2. The year-to-date increase in the price of their tokens is 100% and 260%, respectively. The tokens have outperformed the market’s average gain, suggesting buyers are paying more attention to these tokens.

Crypto financial services Matrixport's head of research believes the recent scrutiny of Paxos and its Binance USD (BUSD) token is not a direct attack on stablecoins themselves. 

In a Feb. 14 analysis, Matrixport's Markus Thielen suggested that Paxos Trust Company, the issuer of the Binance USD (BUSD), may not have been stringent enough with its oversight of the token.

He added that the issue "does not appear to be around stablecoins" in itself.

"Paxos had violated its obligation to conduct tailored, periodic risk assessment and due diligence of Binance and Paxos-issued BUSD customers," Thielen argued.

On Feb. 13, the New York Department of Financial Services (NYDFS) ordered Paxos to halt the issuance of BUSD "as a result of several unresolved issues related to Paxos’ oversight of its relationship with Binance"

For readers looking for unique, meaningful gifts for their valentine this Valentine’s Day, consider giving a cryptocurrency-related gift. Here are nine options:

A cryptocurrency gift card 

Give your significant other the gift of choice by giving them a cryptocurrency gift card. They can use it to buy food or any digital asset they want, whether that’s Bitcoin (BTC), Ether (ETH) or a stablecoin like USD Coin (USDC).

Virtual real estate

Readers can buy virtual real estate in the metaverse, such as in Decentraland or The Sandbox, as a unique, romantic gift. Their significant other can build and customize their own virtual world, and couples can explore new dimensions together.

Related: Why real estate investors are going crazy over virtual lands

NFT artwork

Surprise your loved one with a nonfungible token (NFT) artwork they can cherish forever. There are numerous talented artists creating digital art that can be purchased and collected as NFTs.