27.06.202209:55 Forex Analysis & Reviews: The final meeting on the draft law on the regulation of MiCA cryptocurrencies in the EU will take place on June 30, 2022

Bitcoin and ether exchange rates have stabilized slightly. Demand, which has been observed since the fall to the next annual lows on June 18, allowed to compensate for some of the losses, which reduced nervousness among crypto investors and large holders of coins and tokens. However, the investor fear index continues to be in the critical zone at the level of 14 points, indicating rather gloomy prospects for further upward correction - especially after reaching fairly large resistances, which we will talk about below.

Now I would like to say a few words about the recent speech by the President of the European Central Bank, Christine Lagarde, who in her speech touched on crypto assets and decentralized finance. In her opinion, these areas may pose "real risks" to financial stability. Lagarde also noted that there are several regulatory proposals to supplement the draft law on the regulation of the European markets of crypto assets MiCA. Let me remind you that on June 30, 2022, the European Parliament, the European Commission, and the EU Council will hold a final meeting on the draft law on the regulation of cryptocurrencies. As the participants of the meeting note, all-important issues have already been agreed upon, but several open topics require discussion. Legislators need to fully determine the procedure for supervision of NFT and stablecoins.

As for Christine Lagarde, last week, she spoke about the alleged regulation of cryptocurrencies during a hearing in the European Parliament's Committee on Economic and Monetary Affairs. "As we begin to work on crypto-assets and the regulation of the risks they pose, I believe that crypto assets and decentralized finance are already posing a real threat to financial stability," Lagarde said. "This will be especially relevant if the rapid growth of the crypto asset and services markets continues further, strengthening the relationship with the traditional financial sector," the ECB head added.

Despite this, Lagarde believes that the links between private sector crypto assets and traditional finance remain limited. As for the draft law on the regulation of crypto-asset markets, she stressed that the European Council for Systemic Risks ESRB, which she heads, supports the need for rapid adoption and implementation of MiCA. However, it will take quite a long time before the new bill comes into full force. Lagarde expects MiCA to be implemented only by 2024.

The President of the European Central Bank has proposed some additional provisions to the current draft law. No specifics were announced, but it was about the need to take into account the risk of financial institutions working with crypto assets. The ECB head noted that the current MiCA bill does not apply to bitcoin, but she hopes that this gap will be taken into account in the new MiCA2.

As for the short-term prospects of bitcoin, it is obvious that there are fewer and fewer people willing to buy in the area of large resistance levels, which the trading instrument approached this weekend. For the development of the initiative on the part of the bulls, active actions are needed in the region of $ 21,700. Only a consolidation above this range will quickly return the trading instrument to $ 22,850, allowing investors to calm their nerves a little, who "drank problems" after the collapse of bitcoin last weekend below $ 18,000. A breakdown of the nearest support of $ 20,760, as well as $ 19,800, and another consolidation below this range will fail the trading instrument back to a minimum of $ 18,500, and then close to $ 17,540.

Ether has a new level of resistance, which needs to be dealt with as quickly as possible – if, of course, the bulls are counting on the continuation of the upward correction. It will be possible to talk about building a bull market only after a return of $ 1,265, which will quickly return the ether to $ 1,385, and then very close to $ 1,544, which will be a serious problem for traders. Only consolidation above will allow building an uptrend for the trading instrument with the prospect of updating the maximum of $ 1,746. In case of a return of pressure on ETH, purchases in the area of the nearest support of $ 1,177 are not excluded. A break in this range will be the reason for a new decrease in the ether and a hike to $ 1,117. In this case, I advise you to count on new lows: $ 1,041 and $ 934, where the major players will again begin to actively act.