Bitcoin and Ethereum resist SEC's advance during altcoins' falls

Naeem Aslam, chief investment officer at Zaye Capital Markets, stressed that the recent declines are due to the sell-off in some of the market's leading altcoins following Securities and Exchange Commission (SEC) lawsuits against Binance and Coinbase. "Cardano, Polygon, and Solana are just some of the names that kept many traders on their toes over the weekend as the price action displayed an enormous amount of weakness. These companies were highly popular during the peak of the crypto rally, and they were dubbed the next ETH killers," he stated.

"Professional investors sell some of their assets, like Ethereum, in order to get exposure to them, while retail traders see them as their lottery ticket to buy a Lamborghini. But in reality, they did nothing more than advertise and make false promises, and little to no work was done on the legal side of things. But obviously, this isn’t the first time that a large number of traders were sidetracked by their evil marketing ways, which helped companies like Cardano and Polygon accumulate piles of cash," explained Aslam.

For this expert, recent events show that investors "want to stay away from anything that can be classified as a security", so they are "unlikely" to invest in companies or tokens susceptible to attack by regulators.

On the flip side, Bitcoin and ethereum have shown quite a bit of resilience and continue to move at levels seen in recent weeks. Aslam commented that investors know that this asset class "is not going anywhere" and he stressed that "Bitcoin has the ability to weather all kinds of storms." "The SEC made its position very clear about Bitcoin a long time ago, and what we need to see is exchanges respecting the SEC’s framework. We continue to believe that any weakness in Bitcoin represents an opportunity, while traders hope that the price will continue to hold on to gains as no one wants to see the price dropping towards the 20K as that could trigger another rout in prices," he added.

Javier Molina, senior market analyst for eToro, explained the "specific" and "differentiating value" that BTC and ETH have demonstrated. "BTC has maintained a certain comparative relative strength that evidences its clear difference with the rest of the assets. The $25,000 area represents the real support to watch. Prices below it would be very bearish and would indicate a high probability of going after $23,600 first and $21,000 as the second key level," he noted.

However, Molina warned that "if we see that $25,000 holds, watch out for $26,200 first and then $27,500, as these would be the main bullish targets". "At the moment, the percentage of supply held by investors for more than 12 months remains above 67% of the total, the outflow of BTC from the exchanges continues and the hash rate shows the health of the network," he added.

On the other hand, investors are also looking ahead to multiple central bank meetings this week. The most important one, which also coincides with the US inflation data, is that of the Federal Reserve (Fed). According to CME's FedWatch tool, there is a 73% chance that the central bank will pause its interest rate hike cycle.