The cryptocurrency market experienced a significant downturn over the weekend as bearish pressure intensified following the U.S. Securities and Exchange Commission's (SEC) crackdown on the crypto industry. Bitcoin, the leading digital asset, fell below the $26,000 level, while Ethereum dropped below $1,800. Traders reacted to the fallout from the SEC's regulatory actions, which included Robinhood delisting several altcoins from its platform, such as Solana and Cardano.
Bitcoin, which had reached a peak of $26,770 the day before, suffered a sharp decline to an intraday low of $25,502. This downward movement coincided with the 14-day relative strength index (RSI) dropping towards 39.00. Currently, the index is slightly above this level at 40.06. Additionally, the 10-day moving average crossed below the 25-day counterpart, further reinforcing the prevailing bearish sentiment.
Ethereum also faced selling pressure, with its price dropping to $1,721, the lowest level since late April. After reaching a peak of $1,861.14 on Friday, ETH/USD slipped below the $1,800 level. The RSI for Ethereum also declined, reaching its lowest level since March. With the index close to oversold territory, there is a possibility that long-term bulls may view this as a buying opportunity.
The SEC's regulatory crackdown had a widespread impact on the cryptocurrency market. Smaller coins, including Cardano's ADA, Solana's SOL, Polygon's MATIC, and Avalanche's AVAX, experienced double-digit percentage drops. Bitcoin and Ethereum, as the two largest digital assets, were not immune to the sell-off, with Bitcoin sliding approximately 3% and Ether shedding 5.6%, reaching its lowest level since late March.
The SEC's lawsuits against Binance Holdings Ltd. and Coinbase Global Inc. further shook the crypto sector. Binance, the largest trading platform in the sector, and its founder Changpeng Zhao were accused of mishandling customer funds, misleading investors and regulators, and violating securities rules. Coinbase, the largest digital-asset exchange in the US, disputed the SEC's allegations of running an illegal exchange and expressed its readiness to take the legal battle to the Supreme Court.
The SEC's actions classified several tokens, including Binance's BNB, Cardano, Solana, and Polygon, as unregistered securities. This designation could make these tokens more difficult to trade if exchanges decide to avoid listing them to avoid regulatory issues. Robinhood Markets Inc. already announced its intention to delist Solana, Cardano, and Polygon starting from June 27. As a result of the regulatory scrutiny and delistings, the BNB token, seen as an indicator of sentiment toward Binance, experienced a decline of about 5%, reaching its lowest level since December of the previous year.
The SEC's tougher stance on tokens and increased regulatory actions reflect the agency's commitment to enforcing investor-protection laws in the crypto industry. While Bitcoin is considered a commodity, SEC Chair Gary Gensler has consistently stated that most other tokens fall under the agency's jurisdiction and trading platforms should register with the regulator. These regulatory measures come as a response to the volatility and instability seen in the crypto market in recent years, including the FTX exchange's bankruptcy.
As the crypto market faces increased scrutiny and regulatory actions, traders and investors are closely watching for further developments and potential impacts on prices and market sentiment. The SEC's actions have sent shockwaves through the industry, emphasizing the need for compliance and regulatory oversight in the evolving world of cryptocurrencies.
