Weekly Crypto Recap with NewsCrypto
Welcome back, NewsCrypto enthusiasts! It's time for another edition of the NewsCrypto newsletter.
Remember the days when credit cards were just for that fancy dinner or the occasional splurge? Those days seem like a distant memory now.
Join us as we unravel the intricate web of the US credit bubble and sprinkle in some Bitcoin wisdom for good measure.
Hold onto your wallets; it may be a bumpy ride!
What's on the menu today?
1. Breaking Crypto News
2. BTC TA Analysis
3. US Credit Bubble is About to Burst
4. Funniest Meme of the Week
· Coinbase is demanding that the SEC take action on its request for formal rules on which digital assets count as securities
· Tether, the leading stablecoin issuer, revealed it had frozen 32 addresses allegedly linked to activities involving war, terrorism, and crime.
· FTC has warned consumers that crypto deposits are not insured by the FDIC.
· Crypto exchange Binance US has suspended withdrawals in U.S. dollars.
· SEC has dropped all charges against Ripple’s executives, CEO Brad Garlinghouse and co-founder Chris Larsen.
· The U.S. Chamber of Digital Commerce, a leading crypto policymaking advocacy group, filed an amicus brief urging the U.S. SEC to dismiss its lawsuit against cryptocurrency giant Binance.
Do you want to read more about each piece of news?
Check out the News section on our educational platform here 👇🏼
Bitcoin TA Analysis
· Crypto Fear and Greed Index update
· Crypto Fear and Greed Index update
If you didn’t pay attention to the crypto market this chart may seem like nothing special, yes Bitcoin did indeed pump but it happens from time to time.
This time it’s different.
Cointelegraph released fake news about iShares Bitcoin ETF approval which caused a wick from ≈ $27.7k to $30.7k but quickly sold off down to $28k.
So why is the latest Bitcoin rally different?
Because people are now assigning the fair value of Bitcoin to at least $30.7k post ETF approvals. Pretty much BTC under this price is seen as discounted relatively to the future price expectations.
· Bitcoin Daily Time Frame
Let’s zoom in on the daily chart. Here you have to know we are using BTC/USD index chart and the wick didn’t go as high as it did on BTC/USDT perp futures.
We can see how Bitcoin respected the marked resistance and support zones. Some of them got front run but nevertheless, it respected all of them. It had a bit of a hard time breaking through the $30.1k resistance but it powered through it today.
The ideal scenario - BTC finds support above this resistance and consolidates for a bit so the RSI has time to come down from the overbought zone (above 80). But even if it dips down to $29.6k it wouldn’t be the end of the world. It would need to break through $30.1k once again but if the next move up is strong it won’t be a problem.
US Credit Bubble is About to Burst
The credit card debt situation in the US paints a rather alarming picture.
With the average credit card debt hovering around $6,000, it seems like many are on a shopping spree without an end in sight.
Ah, the joys of avocado toast and online shopping. But here's the kicker: the average monthly payment for this debt is a whopping $1,500, with current rates far above 20%.
Now, here's where it gets even more interesting (or should we say concerning).
Half of Americans are using their credit cards for basic living expenses. That's right, folks. It's not just for that vacation or the latest iPhone anymore. It's for groceries, bills, rent... This trend of maxed-out credit card balances is a glaring sign that many are using their cards as a makeshift emergency savings account. And as we all know, that's a recipe for a financial disaster.
The Domino Effect of Delinquency Rates
Delinquency rates for credit cards have been on the rise, especially among small and medium-sized banks. High credit card utilization rates coupled with these delinquencies have made swiping that piece of plastic a lot more expensive.
Higher delinquency rates mean banks will be more careful with whom they give the credit cards to and charge even higher interest rates to bear the risk of delinquencies. This will make it even harder for current credit card users to pay off the debt → even higher interest rates.
This will cause a domino effect of ever-higher interest rates and a number of people not being able to pay off their debt.
Risk Management and Financial Markets
In the grand scheme of things, managing risk is paramount to succeeding in the financial markets and the same is true with everyday life.
The current credit bubble is showing signs of bursting. Just look at the chart of personal savings and consumer loans from the last couple of years. It's so disturbing that we’d give it a PG18 rating.
The tightening standards for credit card loans, commercial loans, and industrial loans to large and middle-market firms indicate a broader credit slowdown. If Powell doesn’t cut the rates things will get even uglier!
Funniest Meme of the Week