As Ethereum declines 15% in two days and Bitcoin bulls lose pace, cold feet once more rule the cryptocurrency markets.
On July 26, Bitcoin (BTC) dropped to $21,000 when news broke that prominent cryptocurrency exchange Coinbase was under investigation.
As news of new legal issues for Coinbase regarding the trading of securities emerged, data revealed a quick retreat to lower levels for BTC/USD.
Bloomberg reported that the U.S. Securities and Exchange Commission was investigating whether the exchange had let users to trade unregistered securities.
The action, which was a part of a larger conflict between the U.S. crypto business and regulators over compliance, looked have alarmed the market as it coincided with claims that a former CEO engaged in insider trading.
Ironic the peak euphoric events of the Bull Market were Tesla buying #Bitcoin and Coinbase IPO'ing on the Stock Exchange
Now in the last week Tesla has sold and Coinbase is under investigation by the SEC
— Matthew Hyland (@MatthewHyland_) July 26, 2022As a result, Bitcoin was once again defending $21,000 as support for the day. Commentator Mark Cullen emphasised the importance of this level holding in order for bulls to maintain control.
“The 21k level for BTC is super critical for the bulls to hold if they have any hope of this regaining a bullish posture,” he told Twitter followers.
“A 4hr close below there and the bitcoin ball is well and truly in the [bears’] court.”
Market Crypto Tony saw a little lower level as a temporary floor while stating that a "drop deeper" was still a potential result in the future.
$BTC / $USD - Update
$20,700 is my target on this drop, following my chart yesterday. Looking for at least another drop to that level, but i do think we drop deeper ‼️ pic.twitter.com/WXYUCWZm6O
— Crypto Tony (@CryptoTony__) July 26, 2022For its part, Coinbase had been anything but mute in the US regulatory discussion, publishing a blog post last week on the subject of why the SEC need to change tack.
“If the Commission starts an open process where all of us can provide input, we look forward to sharing our thoughts on how to answer the important questions our petition raises, and we would encourage others to do the same,” chief policy officer Faryar Shirzad wrote.
“We may not agree every step of the way, but it’s critical that this is an open and transparent process, where the public has a chance to offer their views. Policymaking at this level is far too important to be made in a black box.”
Pre-market losses on Coinbase shares were 3.7 percent, compounding the day before's losses of 5.3 percent.
On altcoin markets, a similar sentiment could be seen. A fellow account, TraderSZ, predicted a recovery to $1,000 for Ether (ETH) even before the majority of Bitcoin's losses really occurred.
At the time of writing, ETH/USD, which had previously been the top performer in the July crypto market recovery, was trading at slightly over $1,400. The duo have lost 15% from their peak on July 24.
On July 25, TraderSZ issued a warning about Ethereum and Bitcoin, the latter of which was heading for a low of $18,500.
i dont like the way ethusd looks...i think even if it wants to go higher, makes more sense to take out the lows...which means btc could squeeze lower. going to cut my btc long. if it is low, il get back in higher up after low is in https://t.co/u6sFHpzPH1 pic.twitter.com/6BbfmB6VRY
— TraderSZ (@trader1sz) July 25, 2022