Coinbase, the SEC, and the Ruling Making Petition

On Monday (Mar 11), Coinbase (COIN) Chief Legal Officer Paul Grewal provided updates on the rejected SEC rulemaking petition. Significantly, Coinbase filed an opening brief in the 3d Circuit challenging the denial of the rulemaking petition.

Coinbase took the opportunity to question the SEC’s authority over the US digital asset space.

In Aug 2023, Coinbase filed a Motion to Dismiss (MTD), arguing the SEC lacks the statutory authority to regulate crypto exchanges. If Judge Katherine Failla grants the MTD, the SEC may have to end its reign of regulation through enforcement.

Judge Failla could rule on the MTD at any time. Coinbase and the SEC delivered oral arguments on Jan 17. Legal experts believed Coinbase delivered a better explanation of an investment contract, raising the chances of a positive outcome for the crypto industry.

However, Coinbase shares stumbled in the week ending Mar 15, sliding 5.56% to $242.36. The losses aligned with the crypto market pullback through the second half of the week. From Monday (Mar 11) to Sunday Mar 17, the total crypto market cap was down 3.88% to $2,434 billion.

“Another week, another loss for Gensler’s SEC.”

The loss was unrelated to the Ripple case. Nonetheless, the SEC win rate remains relevant. Investors expect the SEC to appeal against the Programmatic Sales of XRP ruling. In July 2023, Judge Torres ruled that programmatic sales of XRP do not satisfy the third prong of the Howey Test.

Investors remain hopeful of the appellate courts upholding the Programmatic Sales ruling. However, a December 2023 court ruling in the SEC v Terraform Labs case created more uncertainty. In December, Judge Rakoff ruled that TerraUSD and Luna are securities.

Since the ruling, the SEC has notified Judges presiding over cases against crypto firms of the Judge Rakoff ruling. The Terraform Labs ruling will likely form part of the appeal against the Programmatic Sales of XRP ruling.

While the lingering threat of an SEC appeal remains an XRP headwind, the ongoing SEC v Ripple case needs consideration.

SEC v Ripple: SEC Opening Reply Brief Due on March 22, 2024

There were no SEC v Ripple case-related updates for investors to consider on Saturday. Nonetheless, it could be an important week ahead for Ripple and XRP.

On Friday, UK retail sales will also draw investor interest. A continued rise in spending could fuel demand-driven inflation and support sentiment toward a BoE hold in 2024. Economists forecast retail sales to decrease by 0.3% in February after surging 3.4% in January.

Beyond the numbers, investors must also monitor Bank of England commentary.

US Economic Calendar:  The Fed and the Services Sector

On Tuesday, the US housing sector will be in the spotlight. Housing sector data are leading indicators of the US economy. A deteriorating housing sector environment could impact consumer confidence and spending. Downward trends in consumer spending could raise the threat of a hard landing. Private consumption contributes over 60% to the US economy.

Economists forecast housing starts to surge 7% in February after sliding 14.8% in January. However, economists expect building permits to fall by 0.2% after a 0.3% decline in January.

On Wednesday, the Fed interest rate decision, FOMC Economic Projections, and Fed Press Conference warrant investor attention.

Recent inflation numbers have reduced bets on an H1 2024 Fed rate cut. The Economic Projections and Fed Press Conference could dictate near-term trends for the US dollar. Economists expect the Fed to leave interest rates at 5.5%.

Philly Fed Manufacturing, private sector PMIs, and weekly jobless claims will garner investor interest on Thursday. Barring a spike in jobless claims, the Services PMI will likely impact the GBP/USD more. The Services sector accounts for over 70% of the US economy and remains the main contributor to inflation.

A pickup in service sector activity could delay the timeline for a Fed rate cut. Beyond the headline PMI, investors must consider the sub-components, including prices, employment, and new orders.

Short-Term Forecast:

The near-term trend for the GBP/USD will hinge on the Fed and BoE policy decisions and forward guidance. However, the Services PMIs and UK retail sales figures will also dictate trends. A resilient UK economy and cracks in the US economy could bring the $1.29 handle into play.

GBP/USD Price Action

Daily Chart

The GBP/USD hovered above the 50-day and 200-day EMAs, sending bullish price signals.

A GBP/USD break above the $1.28013 resistance level would support a move to the $1.30 handle.

The Fed and the BoE warrant consideration alongside economic data from the UK and the US.

Conversely, a break below the 50-day EMA would bring the 200-day into play.

The 14-period Daily RSI at 52.70 indicates a GBP/USD return to the $1.30 handle before entering overbought territory.

Beyond the numbers, investors must track ECB member commentary.

The Pound

On Wednesday, UK inflation numbers for February will influence buyer demand for the Pound. Sticky inflation figures could signal a higher-for-longer Bank of England rate path.

Preliminary private sector PMIs for the UK will kickstart an important Thursday session. The focus will be on the Services PMI, accounting for over 70% of the UK economy.

Beyond the headline PMI, investors must consider employment, new orders, and prices. An upward trend in wages and output prices could influence the BoE rate path.

However, later in the Thursday session, the Bank of England Interest rate decision and MPC Meeting Minutes will have more impact. The markets expect the BoE to leave interest rates at 5.25%. A hold would shift the focus to the vote count and Meeting Minutes.

On Friday, UK retail sales numbers for February will end a busy week. Upward trends in consumer spending could fuel demand-driven inflation and delay the timeline for a BoE rate cut.

Away from the economic data, Bank of England commentary also needs monitoring.

The Loonie

On Tuesday, inflation numbers from Canada will impact the buyer demand for the Loonie. Softer-than-expected numbers may raise bets on a Bank of Canada interest rate cut.

However, retail sales also warrant consideration on Friday. Weaker-than-forecast numbers could further support bets on a BoC interest rate cut.

Other stats include RMPI and New Housing Price Index numbers. However, these will likely play second fiddle to the inflation and retail sales data.

The Australian Dollar

On Tuesday, the RBA interest rate decision, rate statement, and press conference will influence trends for the  Aussie dollar. In February, the RBA left an interest rate hike on the table. With the markets expecting the RBA to leave the cash rate at 4.35%, the press conference will have more impact. Views on inflation, the economic outlook, and interest rate cuts need consideration.

Employment numbers on Thursday also warrant investor attention. Tighter labor market conditions could support wage growth and fuel consumer spending. Higher consumer spending trends could pressure the RBA to hike rates to dampen demand-driven inflation.

On Friday, the RBA will be in the spotlight again. The RBA Financial Stability Report will draw investor interest.

The Kiwi Dollar

Q4 GDP and consumer sentiment numbers for New Zealand will impact the Kiwi dollar. A pickup in consumer sentiment could fuel consumer spending and demand-driven inflation.

However, a contraction in the New Zealand economy could force the RBNZ to leave the cash rate steady over the near term.

The Japanese Yen

On Tuesday, the heavily anticipated Bank of Japan monetary policy decision will influence the Japanese Yen. An exit from negative rates would drive buyer demand for the Yen. However, forward guidance on monetary policy would also need consideration.

Trade data and private sector PMIs from Japan will garner investor interest on Thursday ahead of inflation numbers on Friday.

The impact of the numbers on the Yen will likely hinge on the monetary policy decision and forward guidance. While considering a pivot from negative rates, the BoJ remains concerned about the economy. Nonetheless, the services sector is a focal point, with the BoJ wanting services to fuel demand-driven inflation.

Out of China

Industrial production, retail sales, unemployment, and fixed asset investment numbers will affect market risk sentiment on Monday.

Beijing withheld fiscal stimulus measures to bolster the economy during the National People’s Congress. We expect increasing sensitivity to the numbers from China. A pickup in industrial production and domestic consumer demand could be a boon for riskier assets and commodity currencies.

On Wednesday, the PBoC will be under the spotlight after leaving the one-year MLF rate unchanged. The PBoC will set Loan Prime Rates on Wednesday.

A cut to Loan Prime Rates could boost demand for riskier assets before the Fed interest rate decision.

In a recent development within the cryptocurrency sphere, Panos Mekras, a renowned blockchain advisor specializing in the XRP Ledger (XRPL), has sparked discussions regarding the integration of USDC onto the XRPL. Mekras, known for his insights into blockchain technologies, took to social media to shed light on the absence of USDC on this ledger.

Addressing the issue, Mekras emphasized the significance of USDC and EURC (Euro Coin) integration for the progress of projects like Anodos on the XRPL platform. He disclosed his proactive approach by reaching out directly to Circle, the company behind USDC, to inquire about the delay in issuing a stablecoin on XRP Ledger.

Mekras’s observations underscore a broader concern within the XRP community regarding Ripple’s role in facilitating integrations and developments on the XRPL. While acknowledging Ripple as a pivotal entity in the XRPL ecosystem, Mekras hinted at the need for diversification and independence from Ripple’s influence to foster growth and innovation.

Independence for XRP?

Moreover, Mekras hinted at a potential bottleneck in XRPL’s development, attributing it to the prevalent perception of Ripple as the sole driving force behind the platform. He highlighted the need for greater awareness within the XRP community and beyond, regarding the broader ecosystem and functionalities of XRPL.

Mekras’s insights shed light on the intricacies surrounding XRPL’s evolution and the imperative for collaborative efforts to broaden its utility. As discussions continue to unfold, stakeholders await Ripple’s response and potential interventions to expedite the integration of USDC into XRPL, signaling a pivotal moment for the XRP ecosystem.

With the recent launch of its native decentralized exchanges, Jupiter (JUP) and Raydium, Solana has witnessed a significant boost if DeFi volumes, outpacing the likes of Arbitrum (ARB), Optimisim (OP) and Polygon (MATIC)

Solana Price Prediction: The $200 resistance could cave any moment

After 4-years of trading, SOL, the native cryptocurrency and gas asset of the Solana blockchain, has reached a market cap over $85.5 billion, to become 5th ranked crypto asset globally, ahead of the likes of Ripple (XRP) and Cardano (ADA)

On March 16, SOL price broke out towards $197 as the anniversary celebrations kicked off. But the Bollinger band technical indicator suggests that the price could swing further above $200 in the coming days.

As seen below, after 68% gains in March 2024, Solana price now sits above the upper-limit of the Bollinger band indicators. This rare market alignment is often a signal of overwhelming bullish momentum.