The downtrend is even more concerning since the S&P 500 is trading near its highest level in six months, yet the wider crypto market continues to correct

After 20 days of holding the $22,500 support, Bitcoin eventually broke down on February 9. Bullish traders had placed their hope on a prolonged rally, but this has been replaced by a tight trading range with resistance level at $22k.

The downward trend is even more worrying because the broader crypto market continues to correct despite the S&P 500 trading near its highest level in six months.

Regulatory pressure, mainly in the US, can explain Bitcoin’s latest flat performance. For beginners, on January 9, Kraken exchange reached an agreement with the US Securities and Exchange Commission (SEC) to halt offering staking services to U.S. customers. It agreed to pay $30mln in disgorgement, prejudgment interest and civil penalties.

On February 10, crypto lending company Nexo Capital said that its yield-bearing Earn Interest product for U.S. customers would be shut down in April. The crypto lending company pointed to its $45mln settlement with the Securities and Exchange Commission and other regulators on January 19 as the reason behind halting the service.

Securities and Exchange Commission Chairman Gary Gensler warned crypto firms on January 10 to ‘come in and follow the law,’ explaining that their business models were ‘rife with conflict’ and claimed they needed to ‘disentangle’ bundled products. He said that such firms are required to register with the Securities and Exchange Commission.

Another blow to the crypto sector sentiment came on February 13 after Paxos Trust Company announced the termination of its relationship with Binance for the branded U.S. dollar-pegged stablecoin BUSD amid an ongoing probe by New York regulators.

The U.S. Consumer Price Index data for January is due on February 14, which will reveal whether price rises have been subdued following interest rate hikes by the central bank. Generally, lower inflation rates would be cheered as they lessen the pressure on the U.S. Fed to curb the economy. But on the other hand, lesser consumer demand is likely to pressure corporate earnings, which could trigger the recessionary environment even more.