The global economy has revealed new investment trends over three weeks of Russia's military invasion of Ukraine. Apart from traditional investments in precious metals, real estate and the US dollar, major market players increased their investments in stablecoins. For example, investors tried to preserve capital with bitcoin in the last week of February, However, they resisted these attempts due to BTC meager security guarantees.
A major event subsequently occurred that significantly strengthened the position of the cryptocurrency market. US President Joe Biden signed an executive order to develop a strategy to regulate digital assets. Ripple CEO Brad Garlinghouse noted that it was extremely significant for the crypto industry. The entrepreneur believes that the US cryptocurrency strategy will make significant progress in protecting investors from potential risks, as well as simplify the operation of cryptocurrency companies and their interaction with regulators.
The development of clear regulatory rules for cryptocurrency activities in the US will greatly simplify and secure investments in digital assets. The key reason why bitcoin lost to gold as a safe haven asset was lack of security guarantees for investors. Investors opted for a less profitable, but safer asset. However, the situation will change. Investment appetites for bitcoin will continue to grow as an appropriate strategy is developed.
Biden's executive order on crypto is even more significant for cryptocurrency companies. Clear regulatory rules will allow firms to develop and market new cryptocurrency-based investment products. Moreover, development of digital assets regulatory strategy would markedly reduce the power of the SEC over cryptocurrency investment products. Gary Gensler stated that his agency was not willing to approve spot bitcoin ETF due to insufficient investor protection. Therefore, investments will diversify and such products as spot ETFs will be approved. Many members of the US Congress are critical of the SEC. Consequently, development of cryptocurrency regulatory strategy would deny the regulator many privileges.
The development and implementation of this strategy will require some time. The majority of investors will await the outcome of government regulation of digital assets. However, the rhetoric of the authorities and investors' stance on digital assets will become more constructive and positive. Therefore, a reorientation of institutional investors and a shift in priority from gold and real estate to cryptocurrencies, mainly BTC and ETH is likely.
As for Bitcoin, investors adhere to passive accumulation and hodling. After a slight rise, the asset will continue to maintain a sideways movement. Major market players will not make sharp moves due to increased volatility and upcoming March 18 expiration. Taking this into account, I expect the cryptocurrency to move within the narrowing range of $38,000-$41,000 and further exit beyond its limits. Technical indicators also highlight a sideways trend after a 4% impulse growth. At the same time, it is advisable to open long positions on BTC/USD only if the pair consolidates above $41,600.
A similar situation is observed on Ethereum trading charts. ETH followed a bullish trend for three days in a row. A triangle with a subsequent breakout in either direction is also forming on the charts. Despite a series of green candles, the volume of purchases is small. Therefore, as of March 17, there is no reason to assume that the altcoin will be able to break through the level of $3,000. It is recommended opening short positions in case of a bearish breakout of the support at $2,800. The asset is fluctuating near that level. Therefore, ETH/USD will likely retest the support zone at $2,5000. If this level is broken, the formation of the next local bottom near $2,200-$2,300 is possible.