MiCA rules to govern the European crypto industry starting with July 2024 have been given final approval this week by the European Council. The market may move ahead of the deadline, as Europe becomes a leader in cryptocurrency market regulation.
The cryptocurrency market had a strong comeback in 2023. After a year when it appeared that the bad news couldn’t stop (i.e., FTX saga, Luna bankruptcy, etc.), some light at the end of the tunnel gives hope to crypto fans.
So far, the leading cryptocurrencies have rallied in 2023. Bitcoin, for instance, rallied from $16k to $30k without any meaningful correction. But one may argue that the rally happened on the back of a weak dollar. Now that the dollar gets stronger against its peers, as seen in the EUR/USD, and AUD/USD exchange rates, Bitcoin keeps holding close to the recent resistance area. So the question is – what will be needed for the crypto rally to continue?
First, Bitcoin needs to hold inside the bullish channel. Or, if it drops below the lower edge, it needs to hold the series of higher highs and higher lows intact. Second, Bitcoin and the overall cryptocurrency industry need some positive news to boost sentiment. One such piece of news came out of Europe, as MiCA rules get final approval and will start taking effect in July 2024.
Should the US dollar weakness return, then the leading cryptocurrencies may have more room to rally on top of the 2023 gains.