Bitcoin and Ethereum continue to move sideways after failing to surpass their recent highs, indicating that the two cryptocurrencies could return to their weekly lows and fall even further. Bullish sentiments in the market have decreased.

European Central Bank's Executive Board member Fabio Panetta criticized crypto assets on Monday, comparing the growth of the crypto market to the Gold Rush in the US. Panetta called upon governments to develop new global standards to regulate crypto assets and stop the "lawless frenzy of risk-taking". Furthermore, he spoke in favor of central banks developing CBDCs.

According to the transcript of Panetta's speech at the ECB's website, titled "For a few cryptos more: the Wild West of crypto finance", the ECB's top manager condemned the rapid development of the crypto market. "Growing distrust of banks, coupled with technological innovation, gave rise to a new dream – a digital gold rush beyond state control," Panetta stated. He warned that the crypto market, which is currently valued at $1.3 trillion, could trigger another financial crisis similar to the crisis of 2008. Furthermore, Panetta compared the digital assets market to a Ponzi scheme. "Crypto evangelists promise heaven on earth, using an illusory narrative of ever-rising crypto-asset prices to maintain inflows and thus the momentum fuelling the crypto bubble. But appearances are deceptive. Satoshi Nakamoto's dream of creating trustworthy money remains just that – a dream", he noted.

Even though increased transaction costs, such as Ethereum gas fees, can make crypto transactions nearly instantaneous, Panetta criticized the transaction time of cryptocurrencies, which could take up to several hours. He also noted the massive price swings of crypto assets, ignoring the fact that over the past month alone, Facebook and the Nasdaq Composite have lost 48% and 12%, respectively, among other equities and indexes.

"A large majority of crypto holders rely on intermediaries, contrary to the avowed philosophy of decentralized finance. Crypto-assets are bringing about instability and insecurity – the exact opposite of what they promised. They are creating a new Wild West," Panetta said. Furthermore, he possibly mixed up Proof-of-work and Proof-of-stake blockchain algorithms, such as Shiba Inu or Ripple.

"We must not repeat the same mistakes by waiting for the bubble to burst, and only then realizing how pervasive crypto risk has become in the financial system", Panetta added, warning governments worldwide that the collapse of the crypto market could cause major damage to society.

On the technical side, BTC continues its downward correction, as falling US stock indexes and growing investor fears are dragging the cryptocurrency down. Bitcoin has failed to break through the 100-day MA line in the $41,000 area. Bullish traders need to steer BTC upwards around the $39,300 area to regain the initiative. This would push bitcoin back towards $40,800, easing investor anxiety to some extent. BTC still has support from major market players, which could soften the blow from quarterly earning reports by US tech companies this week. A slump in the US stock market would sink BTC as well. If bitcoin breaks below $37,700, it could fall towards the lows at $36,000 and $34,300. The furthermost target for bears would be $32,900.

For Ethereum, the resistance level at $3,000 remains a key area. A breakout above the resistance would allow ETH to regain $3,158 and open the way towards $3,306. The 200-day MA at $3,480 would likely serve as a strong obstacle for traders. ETH needs to settle above it in order to reach the highs at $3,540 and $3,685. If bearish pressure resumes, it would send Ethereum towards the major support level of $2,800 - ETH has already tested this level several times recently. A breakout below this level would open the way towards the lows at $2,660 and $2,500, where major market players would come into play once again.