Bitcoin, Ethereum, Dogecoin Spike On 'Benign' Biden Order, Ukraine Optimism — Why This Analyst Is Warning Against Celebrations Just Yet

Bitcoin and other major coins spiked sharply on Wednesday evening after details of U.S. President Joe Biden’s executive order on digital assets were unveiled. The global cryptocurrency market cap rose 5.9% to $1.9 trillion.

See Also: How To Buy Bitcoin (BTC)

Why It Matters: President Biden on Wednesday signed an executive order that aimed to “establish the first-ever comprehensive federal digital assets strategy for the United States," but it did not contain any specific regulations or positions.

“The order seems relatively benign, hence giving the market some clarity,” said Marcus Sotiriou, an analyst with UK-based digital asset broker GlobalBlock.  

“This is the first-ever, whole-of-government approach to overseeing the sector in the US as it calls on the Treasury, Financial Stability Oversight Council, Federal Reserve and national security agencies to work on relevant sections of the crypto ecosystem,” Sotiriou said in a note.

He noted investors had been “waiting on the sidelines” as they prepared for downside risks of the event, and bought Bitcoin in what he termed a “spot-driven rally.”

Bitcoin's 24-hour trading volumes soared 25.26% to $32.31 billion at press time.

There appears to be marked improvement in investor sentiment as well with the Alternative.me’s “Crypto Fear & Greed Index” flashing “Fear.” Last week the measure indicated “Extreme Fear.”

Edward Moya, a senior analyst with OANDA, said Bitcoin is benefitting from “the risk-on trade that has roared back following some optimism that war in Ukraine won’t be a long one.”

However, the correlation with other risky assets has not waned, as per Moya. 

“Bitcoin will likely see strong resistance around the $45,000 level unless the stock market rally does not slow down,” the analyst wrote in a note.

Financial market data and content platform Santiment tweeted that Bitcoin jumped higher as “many exchange [shorts] were liquidated rapidly” after details of Biden’s executive order became known. 

“Just right before the leaked [executive order], we can see via funding rate that majority of folks on major exchanges (Binance and FTX) were heavily short. Then they got liquidated and folks have switched Long.” Santiment said the rally caused a “mini short squeeze.”

BTC Funding Rate — Courtesy Santiment

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