U.S. Financial Institutions Could Soon Offer Crypto Services

Week of February 4-10, 2025

Jerome Powell, Chairman of the U.S. Federal Reserve (Fed), stated that banks can fully provide cryptocurrency services to customers if they can manage the risks involved. He emphasized that he is not opposed to innovation, but that regulations need to be clear.

However, Christine Lagarde, President of the European Central Bank, commented that it is unlikely that the Central Bank of the Czech Republic will use Bitcoin as part of its reserves, as she had previously suggested. She believes that central bank reserves should be liquid, safe, and stable.

El Salvador purchased an additional 2 BTC on February 1st, bringing its total holdings to 6,055 BTC, currently valued at over $612 million. This is in addition to its usual daily purchases of 1 BTC. Earlier, the country had also repealed a law that required businesses to accept BTC payments as part of requirements for securing loans from the International Monetary Fund (IMF).

MicroStrategy plans to issue 2.5 million units of Perpetual Strike Preferred Stock, which will pay fixed quarterly dividends, and shareholders will have the option to convert them into common stock of the company. A portion of the net proceeds from the offering will be used to purchase additional Bitcoin.

Tesla reported a $600 million profit from its Bitcoin holdings in Q4 2024, including an evaluation of its Bitcoin holdings to be worth over $1 billion, up $184 million since Q3. This increase is a result of new accounting rules that allow companies to record profits from holding Bitcoin in their financial statements.

Technical Analysis

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Bitcoin (BTC)

Bitcoin (BTC) saw a sharp decline over the weekend, with the key support level at $89,000 to watch closely. If it falls below this price, the trend could shift towards a bear market. In the short term, it’s advisable to pause investments for now. However, if it holds above this level and the price recovers, then breaking through resistance at $106,000 could signal a bullish outlook.

Support: 3,100,000 THB / 89,000 USD
Resistance: 3,600,000 THB / 106,000 USD

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Ethereum (ETH)

Ether (ETH) has experienced a significant drop, with short-term and medium-term trends looking bearish. The key support level is $2,000. If it falls below this price, the chances of a recovery will become slim. However, if it manages to hold above this support, the next resistance target will be at $2,745. It’s only after breaking through this level that ETH could potentially return to its previous highs.

Support: 72,000 THB / 2,000 USD
Resistance: 92,000 THB / 2,745 USD

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Stella (ALPHA)

Stella (ALPHA) posted 33.88% returns last week, but the overall trend remains bearish. The key support is at $0.0335, which is the previous low. If it falls below this level, there may be little chance of recovery. However, if it manages to stay above this support, the short-term resistance target will be $0.0563.

Support: 1.20 THB / 0.0335 USD
Resistance: 2.20 THB / 0.0563 USD

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Lido DAO (LIDO)

Lido DAO (LIDO) posted a 1.65% return last week, with the trend moving sideways. The key support is at $1.40. If it falls below this level, the trend could turn bearish. The short-term resistance target is at $1.945. If it breaks through this level, there’s a chance the trend could reverse and turn bullish again.

Support: 47.50 THB / 1.40 USD
Resistance: 67.50 THB / 1.945 USD

Investment Trends

The U.S. Federal Open Market Committee (FOMC) meeting outcome kept interest rates unchanged as expected. However, Chairman Jerome Powell indicated that if upcoming economic data does not raise concerns about inflation, the Fed might consider cutting interest rates in March 2025, instead of June as previously expected.

Bitcoin (BTC) experienced a sharp decline following President Donald Trump’s announcement of additional import tariffs on three countries—China, Canada, and Mexico. This fueled concerns about rising inflation, which strengthened the U.S. dollar and pushed U.S. government bond yields higher, putting pressure on riskier assets like cryptocurrencies and the stock market.

The market is currently more focused on macroeconomic factors impacting Bitcoin rather than the support policies for Bitcoin and cryptocurrencies announced by Donald Trump. Although such policies have been declared, their real-world implementation is yet to be seen. As a result, the market remains volatile in the short term. However, the medium-term outlook remains positive if these policies are implemented.

On Friday, February 7, 2025, the U.S. Non-Farm Payroll (NFP) data will be released, with an expected increase of 154,000 jobs, down from 256,000 the previous month. The unemployment rate is expected to remain at 4.1%, the same as the previous month. If job growth slows down, macroeconomic factors might again turn favorable for Bitcoin, with the possibility of the FOMC lowering interest rates in the upcoming meeting.

The investment strategy should focus primarily on Bitcoin. Overall, altcoins remain weaker than the broader market. It’s advisable to wait for reduced volatility in the market before considering gradual accumulation again.

References

Disclaimers

Cryptocurrencies and digital tokens are highly risky; investors may lose all investment money. Investors should study information carefully and make investments according to their own risk profile.
Past returns or performance of digital assets do not guarantee future returns or performance.

Remark: views, information, knowledge, and opinions are considered as content that come from individuals involved. They do not constitute an expression of Bitazza and its employees. Neither the email nor the content presented constitute investment advice.

Topics: Crypto Weekly

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