Ethereum is trying to break above $1,265 and settle at the new weekly high. It remains unclear whether ETH would perform this breakthrough or not, but it seems likely at this point. In the meantime, Fed chairman Jerome Powell commented on the extreme swings in the crypto market, stating that the US central bank sees no significant macroeconomic implications from crypto's volatility. Powell also stressed the need for a better crypto regulatory framework.
The Fed chairman testified before the Senate Committee on Banking, Housing, and Urban Affairs on monetary policy and economic growth prospects. Senator Kyrsten Sinema asked Powell whether the Fed was tracking the situation in the crypto market, given the recent volatility. Sinema also inquired what implications crypto has on the broader economic outlook and monetary policy. "We are tracking those events very carefully, of course. The principal implication is really what we've been saying, and others have been saying for some time, which is that in this very innovative new space, really, there is a need for a better regulatory framework," Powell replied.
In the meantime, the European Parliament, the European Commission, and the Council of the European Union are set to hold a final meeting on MiCA, the EU's crypto regulation bill, on June 30. While most issues have already been agreed upon, EU member states disagree on several key aspects of MiCA, such as regulation of NFTs and stablecoins.
In March 2022, Fed chairman Powell stated that the existing regulatory framework was not built "with a digital world in mind." "Stablecoins, central bank digital currencies, and digital finance more generally, will require changes to existing laws and regulation or even entirely new rules and frameworks," Powell said.
The chairman of the Federal Reserve told the Senate Banking Committee that the US regulator is determined to bring high inflation under control. Regarding the US economy possibly sliding into a recession, Powell said: "It's not our intended outcome at all, but it's certainly a possibility, and frankly the events of the last few months around the world have made it more difficult for us to achieve what we want, which is 2% inflation and still a strong labor market."
This weekend, bitcoin moved towards key resistance levels - BTC would need to settle above $21,700 for bulls to maintain the initiative. This would send the cryptocurrency towards $22,850, easing investor anxiety following bitcoin's earlier dive below $18,000. If bitcoin breaks below the closest support at $20,760 and settles below $19,800, it could then slump towards the low at $18,500, as well as $17,540 further below.
Ethereum is now facing a new resistance level - ETH must return to $1,265 to maintain bullish momentum. From there, the cryptocurrency could reach $1,385 and $1,544, which could be challenging for traders. ETH would enter an uptrend if it settles above these levels. Then, Ethereum could test the high at $1,746. Renewed bearish pressure would send ETH downwards to the closest support at $1,177. A breakout below this level would push the cryptocurrency downwards to $1,117 and the new lows at $1,041 and $934, where major market players would come into play once again.
