Crypto Industry News:
Massachusetts Senator Elizabeth Warren did not hold back on a critique of decentralized financing (DeFi), expressing concern over how the stablecoin jump would affect the average investor.
In Tuesday's hearing with the Senate banking committee discussing stablecoins, Warren questioned Hilary Allen, a professor at the American University Washington College of Law, whether the stablecoin jump could potentially threaten the US financial system. While Allen said the "massive" buyout of stablecoins from people who have lost faith in the tokens is unlikely to have "systemic consequences" for traditional markets right now, the DeFi system will be more likely to have tangible effects.
Warren replied that because stablecoins were "the engine of the DeFi ecosystem" outside of regulated markets, she believed that their value would "decline exactly when people needed stability most", which would impact traditional finances:
"DeFi is the most dangerous part of the cryptocurrency world. This is where the regulations are virtually absent and - no wonder - scammers mingle between inexperienced investors and first-time investors. In DeFi you can't even tell if you're dealing with a terrorist. "Said Warren.
Allen added that the potential threat Warren was suggesting could be related to DeFi's future, without addressing her claim of illegal transactions:
"I don't think DeFi can grow without stablecoins. [...] Right now, I think DeFi is limited to the point where it won't affect financial stability, but if it grows, I think there is a real risk, especially if it gets intertwined with our traditional financial system, "she said.
Warren has previously used interrogations and public statements to conclude that cryptocurrencies are primarily linked to illegal activities. During the June hearing discussing the central bank's digital currencies, Senator Massachusetts said that "the crypto world does not currently have consumer protection" and described many tokens as "fake" investments.
Technical Market Outlook
The ETH/USD pair has bounced from the low located at the level of $3,666. The bulls had manage to bounce back up locally towards the technical resistance located at $4,055 so far. Moreover, in order to extend the bounce, bulls need to test and break through the short-term trend line resistance located at the level of $4,300 and head towards the level of $4,435. In a case of a further move down, the next target is seen at the swing low at the level of $3,438. Despite the extremely oversold market conditions at the H4 time frame, the bears are still on control of the market.
Weekly Pivot Points:
WR3 - $4,978
WR2 - $4,721
WR1 - $4,397
Weekly Pivot - $4,163
WS1 - $3,831
WS2 - $3,582
WS3 - $3,258
Trading Outlook:
The ABCxABC complex corrective cycle might be terminated, so the next long-term target for ETH is seen at the level of $5,000. Nevertheless, in order to continue the long-term up trend, the price can not close below the technical support at the level of $2,906. The level of $1,728 (61% Fibonacci retracement of the last big impulsive wave up) is still the key long-term technical support for bulls. The level of $3,677 is the key mid-term technical support for bulls.
