Just as analysts were anticipating that Bitcoin (BTC) was about to experience a price surge, the crypto market headed downward after the SEC accused Binance exchange. This has caused some analysts to think that the bottom of BTC’s price has not yet been reached.
On June 5, Bitcoin’s price dropped to its lowest level in 60 days, reaching $25,744, as traders feared that a further decline might be in store. This was due to the fact that Bitcoin had already been struggling to break above the $26,600 resistance level before the SEC story broke.
Concerns are similar for Ether (ETH), which saw a high of $2,100 after the Shapella upgrade, only to plunge to a 7-day low of $1,794 on May 24. This decrease occurred as Ether gas fees have dropped following the May memecoin mania.
Bitcoin is heading towards the goal of achieving ‘Net Zero’ commitments.
Concerns over the debt ceiling weigh on risk assets
On June 5, the United States Securities and Exchange Commission, headed by Chairman Gary Gensler, brought forth 13 counts of charges against Binance entities and Changpeng “CZ” Zhao. The lawsuit states that Binance deliberately disregarded United States securities regulations, resulting in billions of dollars of enrichment to themselves.
A lawsuit filed in the District Court for the District of Columbia brought forth 13 charges against Binance, with 12 particular cryptocurrencies being identified as securities.
One of the twelve crypto tokens listed was Algorand (ALGO), which in 2019 Gensler referred to as a “great technology”; however, this appears to be in contrast to the most recent enforcement action.
Other crypto tokens mentioned include BUSD, BNB, SOL, ADA, MATIC, FIL, ATOM, SAND, MANA, AXS and COTI.
Shortly after the SEC’s complaint was made public, Binance posted an official response to the lawsuit on Twitter.
The latest move by the SEC has added to the already long record of disagreements, misunderstandings, or lack of confidence concerning the actual purpose of digital assets. Following the FTX fiasco, some people have the impression that US legislators are enraged with the crypto sector. The most recent clash is focused on how centralized exchanges can utilize customer funds.
Lido unlock adds pressure to the crypto market
To this day, the prices of cryptocurrencies remain strongly linked to the Dow and S&P 500 and most major banking institutions anticipate that the US will experience a steep recession in 2023. Nevertheless, this has not hindered major stock indices from hitting yearly records following the US debt ceiling agreement.
The news from Binance is increasing the disparity between stocks and Bitcoin.
An analysis conducted by U.S. Bank, which incorporated more than a thousand data points, shows that investor sentiment regarding the current economic climate is still low.
Terry Sandven, Portfolio Manager and Chief Equity Strategist at U.S. Bank, stated that…
TVL and volume remain low
The Total Value Locked (TVL) metric is a popular method of assessing the condition and sentiment of the cryptocurrency markets. According to DeFiLlama, the TVL across all protocols has decreased by 1% in the last 24 hours and has decreased by $116 billion since April 5th, 2022.
Google searches for ‘crypto’ have dropped to the same levels as in 2020, with sentiment towards Bitcoin being neutral.
In addition to reducing the amount of money available in the market, exchange inflows suggest that there is more selling occurring than buying, apart from the purchase of stablecoins.
Given the heavy macro headwinds and low volume, it is anticipated that the volatility in crypto will persist for the foreseeable future.
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