The Crypto market is drifting along calmly as Bitcoin is hovering around $19,000 per coin. Altcoins are following without any significant signs of activity. The same description of drifting along could be applied to traditional financial markets that remain under pressure. Investors have gotten tired of being afraid and are inspired by any minor positive news.
The Federal Reserve (Fed) interest rates are expected to be raised by 75 basis points in November and 50 bp in December 2022. These jumbo hikes are now treated as a positive sign of a possible slowdown of monetary tightening by the American monetary watchdog. But even as this is the case, the Fed is unlikely to perform a U-turn as inflation must slow down from 8.2% to 4.4% at least for tactics to change. A poor performance of consumer prices was the outcome of the Fed’s anti-inflation measures. So, several months would need to pass until inflation can be brought down to this level.
Crypto assets which, along with stocks, are high-risk assets are reacting in a similar manner to the stock market. U.S. stock indexes are in rebound amid the Fed’s possible tightening monetary strategy review that could be put into motion at the start of a possible recession. But the Fed has said several times that it is literally ready to sacrifice economic growth in order to bring inflation under control. The same inflation troubles are spotted across the globe and prices are rising dramatically in Europe. So, the demand for safe haven assets is expected to last for a long time.
Bitcoin prices are charting a downside wedge with the upper margin at $69,000 (a peak of 2021), down to $48,000 and $19,000. The lower margin is at $32,800 down to 17,600. For the moment a bullish trap has emerged, where prices are spiking above the upper margin and cryptoenthusiasts are doomed to lose their money because they are not able to defend important support levels. If prices go below $18,000, Bitcoin may accelerate down with the final target at $4,000. This is a long-term target and goes beyond the current crypto winter season. Nevertheless, Bitcoin may lose half of the current values quickly if the risk-off mode in the market continues to direct investors.
Apple has introduced new rules on cryptocurrencies and Non-fungible tokens (NFT). It seems that the tech giant is willing to monopolise the NFT market. According to new Apple regulations the app can only be offered in countries or regions where it is licensed and where It has permission to operate a crypto exchange. The guidelines say that apps may use in-app purchases to sell NFTs and sell services related to them but any sort of trading service for NFTs must use Apple’s in-app payment mechanism. Apple takes an up to 30% cut of in-app payments. Any third-party payment solutions, including redirecting to such solutions, are prohibited. NFT’s acquired from third-party ecosystems cannot enjoy the same privileged regime as the App Store tokens.
New regulations are severely limiting decentralised protocols, such as OpenSea and Moonpay, as they cannot fairly compete with such giants as Apple. Developers are likely to find ways in which other apps can communicate with the Apple ecosystem and thing could be better than they are right now. Crypto exchanges are the major beneficiaries of the new regulation as they have received clear guidance not to cooperate with the App Store.