What Happened To Crypto Today?

What Happened To Crypto Today?

The cryptocurrency market experienced a decline today following the news of the US Securities and Exchange Commission (SEC) filing a lawsuit against Binance and its CEO Changpeng Zhao. This development has caused concerns among investors, leading to a downturn in the market.

Analysts had previously anticipated a potential price breakout for Bitcoin, but the SEC’s charges against Binance have reversed the market sentiment. Some analysts now believe that the bottom of the BTC price is yet to be reached.

On June 5, Bitcoin reached a 60-day low at $25,744, as traders fear the possibility of further price dips. Prior to the SEC news, Bitcoin was already struggling to break through the $26,600 resistance level.

Similar worries exist for Ether, which had traded above $2,100 following the Shapella upgrade but subsequently dropped to a 7-day low of $1,794 on May 24. The decline coincides with the cooling of Ether gas fees after the memecoin frenzy in May.

The SEC, led by Chairman Gary Gensler, filed 13 charges against Binance and Changpeng Zhao in the District Court for the District of Columbia. The lawsuit alleges that Binance has violated US securities laws, benefiting financially in the process.

The lawsuit specifically lists 12 cryptocurrencies, including Algorand, Binance USD, Binance Coin, Solana, Cardano, Polygon, Filecoin, Cosmos, The Sandbox, Decentraland, Axie Infinity, and COTI, as securities.

Binance responded to the lawsuit on Twitter shortly after the SEC’s complaint was made public.

This recent action by the SEC adds to the ongoing disputes and mistrust surrounding the use case of digital assets. There is a growing perception that US lawmakers are increasingly critical of the crypto industry, with the latest battle focusing on how centralized exchanges can handle customer funds.

Despite major banks predicting a possible sharp recession in the US in 2023, cryptocurrency prices continue to be highly correlated with the Dow and S&P 500. The Binance news further widens the gap between equities and Bitcoin.

According to U.S. Bank analysis, investor sentiment about the current state of the economy remains low, despite better-than-expected earnings results in growth-oriented sectors.

The total value locked (TVL) metric, which measures the health and sentiment of the crypto markets, has dropped 1% in the past 24 hours, losing $116 billion since April 5, 2022, according to DeFiLlama. Exchange inflows indicate increased sell-side pressure, with limited buy-side pressure outside of stablecoins.

With macro headwinds and low volume, it is expected that cryptocurrency volatility will persist in the near future.