Bitcoin fell in Wednesday morning trading in Asia, remaining stuck under the US$26,000 resistance line. Ether also lost ground, while other top 10 non-stablecoin cryptocurrencies by market capitalization were mixed. The BNB token of the Binance crypto exchange marked the biggest gains among the top 10 after a U.S. court denied the financial regulator’s request to freeze the assets of the Binance.US exchange.

Fear & Greed

Bitcoin fell 0.38% over the last 24 hours to US$25,835.15 at 7:00 a.m. in Hong Kong, losing 4.87% in the last week and repeatedly failing to break through resistance at US$26,000 following the lawsuits filed last week against U.S. crypto trading platforms by the Securities and Exchange Commission (SEC). 

Ether dipped 0.49% to US$1,734.63, posting a 7.87%% loss for the week.

Bitcoin is struggling to move above $26,000 because of the fear in the crypto market and despite the optimism in equities, Alex Kuptsikevich, senior market analyst at online brokerage firm FxPro said in emailed comments.

“The cryptocurrency Fear & Greed Index is in the Fear territory at 45 (-2 points overnight), whereas the Fear & Greed index for the stock market is at 79 (extreme greed),” Kuptsikevich noted. “Technically, to break the downtrend, Bitcoin needs to overcome $27K, and a drop below $26.5K is required to confirm the downtrend. The second scenario seems more likely.”  

Other top 10 cryptocurrencies were mixed. Binance’s BNB token led winners with 4.67% rise to US$241.36, reducing its weekly loss to 14.41%. 

The BNB gains came after a U.S. federal judge on Tuesday denied the SEC request for a temporary restraining order that would have frozen the assets of Binance.US, the U.S. arm of the world’s largest cryptocurrency exchange.

The judge’s decision allows Binance.US to continue operating while it negotiates with the SEC over its compliance with securities laws. Last week, the federal agency accused Binance.US of failing to register as a securities exchange and of offering and selling unregistered securities. The SEC also filed a lawsuit against the U.S.-based Coinbase exchange. Both exchanges have rejected the allegations.

 “According to CryptoQuant, bitcoin reserves on US crypto exchanges have fallen below the 50% – levels last seen in 2017. Assets are flowing to overseas exchanges due to regulatory uncertainty and recent SEC actions against Binance and Coinbase,” said Kuptsikevich.

In other developments involving the SEC and crypto, Ripple’s XRP token lost 0.87% to US$0.5197 for a weekly decline of 2.25% after Tuesday’s long-awaited unveiling of the so-called “Hinman documents,” named after former SEC corporate finance director William Hinman. 

Ripple Labs Inc. was sued by the SEC in December 2020, which alleged XRP was offered and sold as an unregistered security. The company had sought the unsealing of the documents which reveal that Hinman said Bitcoin and Ether should not be categorized as financial securities. The comments are a major point of argument between the SEC and Ripple as Ripple seeks to bolster its fair notice defense.

Ripple’s chief legal officer Stuart Alderoty wrote on Twitter Tuesday that the documents show: “Hinman ignored multiple warnings that his speech contained made-up analysis with no basis in law” and showed the SEC flip-flopped and overstepped the boundaries of its jurisdiction. 

“Unelected bureaucrats must faithfully apply the law within the constraints of their jurisdiction. They can’t – as Hinman tried – create new law,” Alderoty said.

The total cryptocurrency market cap lost 0.12% to US$1.054 trillion in the last 24 hours, while daily trading volume increased by 10.62% to US$33.75 billion, according to CoinMarketCap data.

NFT market on downtrend

The indexes are proxy measures of the performance of the global NFT market. They are managed by CryptoSlam, a sister company of Forkast.News under the Forkast.Labs umbrella.

In the non-fungible token (NFT) market, the Forkast 500 NFT index lost 1.76% to 2,919.17 in the 24 hours to 7:30 a.m. in Hong Kong. The index is down 10.92% for the week.

“The Forkast 500 NFT index is now down nearly 11% in seven days as we continue to find new lows,” said Yehudah Petscher, NFT Strategist at Forkast Labs, the parent company of Forkast.News.  

“Thinking about what it will take to recover seems pretty daunting, as traders are pretty unsure that a recovery will even mean existing assets regain value. History tells us that it’s new projects that a majority of investors’ funds will go into.” 

Total NFT buy/sell transactions rose 3.42% to US$22.1 million, but sales on Ethereum, the leading blockchain by volume, fell 3.94% over the last 24 hours to US$12.87 million, according to CryptoSlam data.

The Bitcoin network was the second largest NFT network in terms of buy/sell transactions, jumping 76.67% to US$3.8 million in the last 24 hours.

Transactions of Uncategorized Ordinals — unique digital assets on the Bitcoin network that are not identified as part of one established collection — rose 69.42% to US$1.39 million. 

Bored Ape Yacht Club sales gained 25.14% to US$1.3 million.

“Art is still hot, with multiple Fidenzas selling for six figures recently and plenty of hype leading up to the Sotheby’s grails auctions coming this week,” Petscher added. Fidenza refers to a collection of 999 NFTs created by the artist Tyler Hobbs using computer algorithms.

Sotheby’s is auctioning the Grails digital art collection on Wednesday. The collection consists of NFT artwork that belongs to the bankrupt crypto hedge fund Three Arrows Capital and its NFT-purchasing fund Starry Night Capital.

U.S. stock futures mixed

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Federal Reserve Board Chairman Jerome Powell (Left), Securities and Exchange Commission Chair Gary Gensler (Right) | Image: Getty Images

U.S. stock futures were mixed as of 9:30 a.m. in Hong Kong after equities gained for the fourth consecutive day during regular trading on Tuesday. Dow Jones Industrial Average futures fell 0.24%, S&P 500 futures edged 0.034% lower while Nasdaq Futures gained 0.028%.

During Monday’s regular trading, the Dow climbed 0.43%. The S&P 500 added 0.69%, and the Nasdaq Composite gained 0.83%. 

Tuesday’s U.S. Consumer Price Index (CPI) report showed that inflation grew at a 4% annual rate in May, compared to 4.9% in April. The CPI was the lowest yearly inflation rate since March 2021, leaving investors hopeful for a pause in the Federal Reserve’s run of interest rate hikes to curb price inflation. 

“It’s a feel-good headline figure that will cheer investors as it will add further pressure on the Fed to pause its interest rate hike agenda,” said Nigel Green, founder and chief executive officer of financial management group deVere, in an email statement. 

“The U.S. central bank is now 15 months and 10 consecutive rate increases into its battle to cool red-hot inflation, but markets will be expecting that the latest CPI report will now be enough to convince officials to hit the pause button,” Green said.

The U.S. central bank is expected to leave interest rates unchanged when it meets on Wednesday, according to TradingEconomics. U.S. rates are at 5% to 5.25%, the highest since 2006 after ten consecutive hikes that started in March 2022 to slow the pace of inflation that surged to 40-year highs at one stage. 

The CME FedWatch Tool predicts a 94.2% chance the Fed will leave rates as is at this week’s meeting, up from 80.4% the previous day.

However, Green of deVere Group warned of more hikes this year — “Inflation is certainly coming down so far, but it is very, very gradual. It remains sticky and a long way from the 2% target, largely due to a tight labor market.”

Former Fed vice chair Roger Ferguson also told CNBC last Friday that the central bank may raise rates later in the year even if it skips this time. 

(Updates with equities section)