Ripple will use US legal precedent to argue for a reduced penalty considering the lack of fraud. In contrast, the SEC wants a punitive penalty as a deterrent. Another reason could be to salvage credibility after the ruling on Programmatic Sales of XRP. In the July rulings, Judge Torres ruled programmatic sales of XRP did not satisfy the third prong of the Howey Test.

Notably, the Terraform Labs ruling may have incentivized the SEC to pursue an appeal against the Programmatic Sales ruling. Judge Rakoff ruled that Luna and TerraUSD are securities. The lingering SEC threat to appeal against the Programmatic Sales ruling remains an XRP headwind.

However, rulings from other SEC cases against crypto firms could pour cold water on plans to appeal.

SEC v Coinbase: Motion to Dismiss Ruling on the Horizon

Coinbase (COIN) filed a Motion to Dismiss (MTD) in August 2023, arguing the SEC lacked the statutory authority to regulate crypto exchanges.

The Motion to Dismiss relates to SEC charges alleging Coinbase operated as an unregistered securities exchange, broker, and clearing agency. Additionally, the SEC charged Coinbase for the unregistered offering and selling of securities in connection with its staking-as-a-service program.

Significantly, if Judge Katherine Failla grants the MTD, the courts could force the SEC to step back from regulating crypto exchanges through enforcement. It could also set a precedent for the listed cryptos in the case that the SEC alleges are securities.

According to a series of recent tweets published by the prominent cryptocurrency tracker Whale Alert, Ripple giant has made a series of large XRP transfers to escrow, locking those funds.

This has taken place today, March 2, after a regular unlock of 1 billion XRP a day before. Besides, less than a week ago, there was another major transaction associated with the Ripple escrow, which set the Ripple community abuzz as a large XRP chunk was released.

In the meantime, the sixth largest cryptocurrency in terms of market capitalization value, XRP, has demonstrated an impressive price increase within the last 24 hours.

Ripple locks up 800 million XRP

Even though the above-mentioned cryptocurrency tracking platform did not post any tweets about Ripple unlocking 1 billion XRP on March 1, the release of the funds from escrow most likely did take place since it happens on the first day of each month on a regular basis, it has been so since 2017.

Now, Whale Alert has reported that almost all that massive XRP sum was put back in escrow, sending there 500 million, 200 million and 100 million XRP. Cumulatively, this amount of XRP is equal to almost $476 million in fiat. Curiously, some commentators stated that the XRP community is looking forward to a major XRP burn, rather than movements from and to Ripple escrow.

However, despite the likely release of 1 billion XRP on Friday, Ripple has recently puzzled the XRP community by unlocking a massive 400-million XRP chunk on Feb. 25 evaluated at $427 million at the time when the transaction was made.

The timing was totally unexpected by the Ripple community, therefore that escrow transaction sparked massive intrigue among XRP holders around the world. However, some in the XRP army seemed to conclude that this was part of the planned February escrow XRP release, which supposedly did not take place.

XRP major price increase

Within the last 24 hours, XRP has conducted a major price increase, rising by more than 9%, reaching the $0.6400 level.

Since the start of the week, the increase comprised a staggering 20.68% as XRP surged from the $0.52993 price mark.

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Finance Magnates CY Limited

Beyond the numbers, China remains a focal point. The National People’s Congress begins on Tuesday.

US Economic Calendar: Fed Speakers in the Spotlight

On Monday, investors must monitor FOMC member speeches throughout the session. FOMC member Patrick Harker is on the calendar to speak.

Reactions to the recent inflation numbers and consumer sentiment report warrant investor attention. Softer Core PCE Price Index and consumer sentiment numbers supported bets on a June Fed rate hike.

However, FOMC members remain concerned about inflation and need confidence inflation will sustainably fall toward the target. Hawkish comments about inflation and the timeline for rate cuts could move the dial.

In February, Harker said interest rates would decrease in 2024. Harker also cautioned against expecting rate cuts around the corner. He needed a couple of meetings to be confident about inflation trends, signaling a May/June rate cut.

Short-Term Forecast

Near-term AUD/USD trends will hinge on US services PMI numbers, the US Jobs Report, and Fed Chair Powell. A pickup in US service sector activity and a tighter US labor market could impact investor bets on a June Fed rate cut. A hotter-than-expected US Jobs Report may also tilt monetary policy divergence toward the US dollar.

AUD/USD Price Action

Daily Chart

The AUD/USD hovered below the 50-day and 200-day EMAs, affirming bearish price signals.

An Aussie dollar breakout from the $0.65500 handle would support a move to the 50-day EMA. A break above the 50-day EMA would bring the 200-day EMA and the $0.66162 resistance level into view.

Australian corporate profits, building approvals, Fed chatter, and China need consideration.

However, a break below the $0.64900 support level could signal a drop to the $0.63853 support level.

A 14-period Daily RSI reading of 45.68 suggests an AUD/USD fall to the trend line before entering oversold territory.

High risk warning:

Foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all your initial investment; do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading and seek advice from an independent financial or tax advisor if you have any questions.

Advisory warning:

FOREXLIVE™ is not an investment advisor, FOREXLIVE™ provides references and links to selected news, blogs and other sources of economic and market information for informational purposes and as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the blogs or other sources of information. Clients and prospects are advised to carefully consider the opinions and analysis offered in the blogs or other information sources in the context of the client or prospect’s individual analysis and decision making. None of the blogs or other sources of information is to be considered as constituting a track record. Past performance is no guarantee of future results and FOREXLIVE™ specifically hereby acknowledges clients and prospects to carefully review all claims and representations made by advisors, bloggers, money managers and system vendors before investing any funds or opening an account with any Forex dealer. Any news, opinions, research, data, or other information contained within this website is provided on an “as-is” basis as a general market commentary and does not constitute investment or trading advice, and we do not purport to present the entire relevant or available public information with respect to a specific market or security. FOREXLIVE™ expressly disclaims any liability for any lost principal or profits which may arise directly or indirectly from the use of or reliance on such information, or with respect to any of the content presented within its website, nor its editorial choices.

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Finance Magnates CY Limited

Federal Reserve Chair Powell is heading to Congress on Wednesday and Thursday to present one of his twice-a-year testimonies.

First up will be his appearance before the House Financial Services Committee on March 7:

• at 10 am Washinton time (US Eastern time)
• 1500 GMT

This is colloquially known as the Humphrey-Hawkins testimony. It’s a biannual report delivered by the Fed Chair to the Congress.

In it the Fed reports on its monetary policy and economic goals to the Congress.

Powell will:

• provide an overview of current economic conditions, and give an update of the Fed’s outlook for the economy, centring on an assessment of the inflation and employment outlook
• will discuss the Fed’s monetary policy position currently, including its changes in interest rates
• take questions from the geniuses in members of Congress, which will cover a range of topics across areas such as how specific economic sectors are faring, regulatory policies, and global economic issues

The recent messaging from Fed officials has been a watering down of rate cut expectations. At the turn into the new year these had reached insane calls for six, and even seven, FOMC rate cuts in 2024. The Fed hosed that down pretty quickly and has reiterated the message in recent weeks. Powell chimed in recently in a TV interview with comments on the danger of moving too soon, and too fast, saying the job of driving inflation down was not necessarily complete.

Crypto data tracker Whale Alert has spotted a large Shiba Inu move within the last 24 hours. A Robinhood-named address received a large transfer of 3 trillion SHIB tokens worth about $50 million from an unknown wallet.

Whale Alert reported, “3,023,255,579,400 SHIB ($49,933,096) was transferred from an unknown wallet to an unknown wallet.” 

Robinhood’s SHIB acquisition coincides with a remarkable rally for the token, which has soared by over 70% in the last 24 hours, reaching highs of $0.00002888 in early Saturday trading.

SHIB has outperformed many other major cryptocurrencies, including Bitcoin, Ethereum and Dogecoin, and has climbed to the 11th spot in the market capitalization ranking, with a valuation of over $12.8 billion.

At the time of writing, SHIB was up 62.20% in the last 24 hours to $0.00002149. The dog token is also set to post its best weekly close since October 2021, currently up 129%, according to CoinMarketCap data.

What happened on-chain ahead of SHIB’s massive pump?

As Shiba Inu’s price skyrocketed by about 70% in the last 24 hours, the on-chain analytics platform Spot On Chain reports what happened on-chain in the past three days leading to the pump.

Spot On Chain highlights three occurrences that might have contributed to SHIB’s price pump. First, a “smart trader” bought 75.91 billion SHIB, now worth $1.51 million, from Binance two days before the pump. This trader has now netted over $614,000 in gains on his Shiba Inu buy.

Second, MakerDAO co-founder Rune is reported to have bought 7.41 billion SHIB with 100,000 USDC for the first time and has netted about $47.1 billion on his SHIB purchase.

Third, an UPbit-named wallet has accumulated 2.13 trillion SHIB, now worth $42.3 million, in the last 24 hours. Currently, this wallet is the seventh largest-holding wallet of SHIB, with 12.45 trillion SHIB worth $247 million.

Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria and Oman have basically extended the November 2023 output cut decision.

• Saudi Arabia will keep its 1mn barrel per day voluntary crude production cut until the end of June — something it first began implementing in July 2023.

Russia said it’ll implement a mix of crude production and export cuts totalling 471,000 b/d

• for April it’ll cut crude output by 350,000 b/d and exports by 121,000 b/d
• for May crude production cut bumps up to 400,000 b/d, while the the cut to exports trims to 71,000 b/d
• for June the cut is only for production, of 471,000 b/d

—

At the margin this’ll be a tailwind for oil prices. Markets will reopen for the week at 6pm US Eastern time.

Renowned economist Daniel Lacalle has voiced concerns about the future of the US dollar, not as a consequence of cryptocurrencies like Bitcoin, but due to the fiscal policies. 

Lacalle points to the alarming increase in national debt, which has surpassed $34 trillion, growing by $1 trillion every hundred days. 

This trend, he argues, is unsustainable, particularly in a period touted as a recovery, marked by strong employment growth and rising earnings.

The unsustainable path of debt accumulation

The crux of Lacalle’s argument lies in the sheer velocity of debt accumulation in relation to the country’s GDP growth, which, adjusted for the accumulation of public debt, was the worst since 1930.

 The economist underscores the paradox of experiencing what is ostensibly strong economic performance while the national debt balloons at an unprecedented rate. He challenges the perception of recovery, pointing out the diminishing purchasing power of salaries and the increasing financial strain on American families, exacerbated by negative real wage growth.

Lacalle takes aim at Modern Monetary Theory (MMT), a controversial economic theory that some interpret as providing carte blanche for governments to engage in unlimited spending, provided they control their own currency. 

The theory posits that the only real limit to government spending is inflation. 

However, Lacalle argues that the US’s continued fiscal expansion, despite an official inflation rate of 20% over four years, demonstrates a reckless disregard for the long-term health of the economy and the dollar. He warns that MMT’s ideological allure masks the grave dangers of its practical application, ultimately burdening families with the consequences of fiscal irresponsibility.

The real threat to the US Dollar

Despite Bitcoin’s remarkable price surge, surpassing $62,000 amid rising national debt and inflation, Lacalle argues that the cryptocurrency is not the primary threat to the dollar’s status as the world’s reserve currency. Instead, the erosion of confidence in the US government’s fiscal and monetary policies poses a far greater risk. 

He forewarns that the loss of monetary sovereignty can happen abruptly when faith in a government’s fiscal discipline evaporates, leading to a vicious cycle of increased borrowing costs, higher inflation, and ultimately, the potential dethronement of the dollar. 

China’s “Two Sessions” policy meetings kick off on Monday with the microscope on the struggling economy and housing market.

Hopes have been mounting for stimulus since this time last year but piecemeal offerings have repeatedly disappointed the market. If there are no announcements this week, expect to see Chinese equities and risk trades tied to global growth slump late in the week.

Key announcements will include targets for GDP, employment and inflation. Those are set to be released on Thursday by Premier Li Qiang, who appears to be the leading figure who is pushing for more measures.

The consensus is that China will continue to aim for ‘around 5%’ GDP growth this year. If it’s above 5%, it could show some determination to boost growth, though that’s unlikely. Inflation is likely to be set at 3% again this year despite the undershoot in 2023.

In terms of properties, the market will be watching to see if Li leaves out a line that “houses are for living in, not for speculation.”

Finally, the deficit target was 3% last year but it was later raised to 3.8%. Anything bigger than 3% would be stimulative.