30.01.202611:28 Forex Analysis & Reviews: Crypto market plunges

The cryptocurrency market has collapsed. Bitcoin has already fallen to $81,000, and that is far from the limit of the current bear market. The SEC yesterday clarified rules indicating that tokenized stocks and bonds will be treated as securities.

The SEC said that if an asset is, in substance, a security, it remains a security regardless of whether its record is kept on-chain or in a traditional database. The on?chain or off?chain recording format does not change registration requirements or investor?protection obligations. Tokenized shares and bonds are subject to the same rules as conventional instruments.

The announcement was a cold shower for many firms developing and deploying tokenized assets. There had been some legal uncertainty about the status of such instruments, and many had hoped that the decentralized nature of blockchain would allow them to avoid strict regulation. The SEC has made clear it is prepared to apply existing securities laws to tokenized assets.

The implications may be sizable. Firms issuing and trading tokenized stocks and bonds will have to comply with stringent registration, disclosure, and investor?protection rules. That could materially increase costs and reduce the profitability of projects. It may also trigger capital outflows from the tokenized asset sector as investors shy away from regulatory risk. Many investors had counted on tokenized assets this year as the next leap forward in decentralized finance and innovation.

In the crypto market, the sell-off began after a sharp rout in US equities, triggered by a weak quarterly report from Microsoft and investors' rapid reassessment of artificial intelligence prospects. Microsoft shares fell about 12% in a single session, while Bitcoin fell roughly 6%.

Trading recommendations:

On the technical front, buyers of BTC are now targeting a return to $83,200, which would open a direct path to $85,600 and then $87,900. The farthest target is the peak around $9,000, a breach of which would signal attempts to restore the bull market. On a downside move, I expect buyers to appear at $81,200. A break below that area could quickly push BTC down toward $78,200, with a further target near $75,100.

As for Ethereum, a clear consolidation above $2,789 would open a direct route to $2,887. The farthest target is the peak near $2,970. A break above that level would strengthen bullish sentiment and renew buyer interest. If ETH falls, buyers are expected at $2,684. A drop below that area could rapidly send ETH down to about $2,585. The far downside target would be around $2,466.

What we see on the chart:

- Red lines indicate support and resistance levels where either a price slowdown or active growth is expected;

- Green lines indicate the 50-day moving average;

- Blue lines indicate the 100-day moving average;

- Light green lines indicate the 200-day moving average.

Typically, a crossover or price test of these moving averages either halts market momentum or sets a new directional impulse.