Bitcoin still holds potential for recovery

[Ben Graham]

The recent decision by the US Federal Reserve to lower interest rates by a quarter point and adjust its more dovish expectations for the coming year to a more conservative approach has weakened the positions of Bitcoin and Ethereum, leading to sell-offs of many altcoins in the cryptocurrency market.

However, there is a ray of hope that the market can weather these developments. Yesterday, US Senator Cynthia Lummis announced her intention to release a draft bill outlining the structure of the crypto market by the end of this week. This will allow industry representatives and both parties to review the bill before consideration next week.

Senator Lummis's statement is undoubtedly an important step toward establishing clear rules for the cryptocurrency market in the US. The absence of structured regulation has long been a significant barrier to the industry's further development, creating uncertainty for investors and firms dealing with digital assets. Defining the status of cryptocurrencies—whether as securities or commodities—will be a cornerstone for subsequent regulatory decisions. The upcoming Senate vote could be a turning point for the US crypto market. If the bill is passed, it will not only attract new investments to the country but also enable American companies to compete more confidently on the global stage. Additionally, clear regulations will reduce the risks of fraud and other abuses, positively influencing consumer trust in cryptocurrencies.

A thorough review of the bill's text by industry representatives and both parties is critical for ensuring its effectiveness and balance. Only through collaborative efforts can a regulatory framework be established that fosters healthy and sustainable development of the cryptocurrency market in the US.

As mentioned earlier, the US Senate is expected to vote on the cryptocurrency market structure bill in December. The most significant aspect of this bill is that it will determine whether cryptocurrencies are classified as securities or commodities, thereby aiming to eliminate much of the uncertainty surrounding crypto regulation in the US.

Trading recommendations:

In terms of the technical outlook for Bitcoin, buyers are currently aiming to reclaim the $90,800 level, which would open a direct path to $93,000, and from there, it would not be far to $95,000. The ultimate target will be around the peak at $97,300, and a breakthrough above this level would indicate attempts to return to a bullish market. Should Bitcoin decline, I expect buyers at the $88,100 level. A return of the trading instrument below this area could quickly push BTC down to around $85,800, with the furthest target being the $83,200 region.

For Ethereum, clear consolidation above the $3,233 level opens a direct path to $3,349. The ultimate target will be around the peak at $3,474, and surpassing this level would indicate a strengthening of bullish market sentiments and a renewed interest from buyers. If Ethereum declines, I expect buyers at the $3,126 level. A drop below this area could swiftly send ETH down to around $3,023, with the furthest target being the $2,924 region.

What we see on the chart:

- Red lines indicate support and resistance levels where either a price slowdown or active growth is expected;

- Green lines indicate the 50-day moving average;

- Blue lines indicate the 100-day moving average;

- Light green lines indicate the 200-day moving average.

Typically, a crossover or price test of these moving averages either halts market momentum or sets a new directional impulse.

The material has been provided by InstaForex Company - www.instaforex.com