The cryptocurrency market experienced a significant downturn last week as a result of the recent lawsuits filed by the United States Securities and Exchange Commission (SEC) against two prominent cryptocurrency exchanges, namely Binance and Coinbase. Consequently, altcoins suffered a decline after Bitcoin breached key support levels that had been in place for 45 days.
As a result of a widespread sell-off in the cryptocurrency market, the total market capitalization of the crypto space experienced a significant decline, nearing the $1 billion mark. This abrupt downturn was triggered by the Securities and Exchange Commission (SEC), which classified several prominent cryptocurrencies, including BNB, SOL, ADA, MATIC, ATOM, SAND, MANA, and others, as securities in two recent lawsuits.
Bitcoin’s Price Action Sparks Market Nervousness
The price of Bitcoin has experienced a significant retracement, declining by more than 18% from its yearly peak of $31,000 to a recent monthly low of $25,400. The prevailing negative market sentiment, is a matter of concern, as Bitcoin has remained below the 200-week simple moving average. This situation may serve as a catalyst for bears to increase their dominance in the market.
During the previous week, Bitcoin experienced its second consecutive bearish with a decline of 4.39%. As of the time of writing, Bitcoin is currently being traded at $25,800, just 200 points below the critical resistance level of $26,000.
Based on data from CoinMarketCap, the trading volume has witnessed a significant decline of 27% in the past 24 hours, amounting to $11.4 billion.
The daily price chart of Bitcoin (BTC) reveals a significant decline as it falls below the 20, 50, and 100-day simple moving averages. However, there is still a chance for buyers to regain control of the trend as the 200-day simple moving average (SMA) is situated well below the current price. It is worth noting that the $25,000 level holds significance as a key support region, which further emphasizes the potential for a rebound in the market.
Bitcoin investors recently experienced a bullish surge, marking a notable rebound from a two-year low. However, they may encounter challenges if the directional view gains further strength, as the Average Directional Index (ADX) is gradually rising within the 25 range.
Today, the RSI is nearing the 40 level, which could potentially provide an opportunity for bulls to stage a recovery above the crucial $25,000 support level. However, it’s important to note that if Bitcoin slides below this significant support level, it may trigger further downward pressure, potentially leading to market crash.
Amidst the ongoing downtrend, Bitcoin whales have shown consistent accumulation of the cryptocurrency, despite it being in a phase of significant consolidation. According to a report by Santiment, these whales managed to accumulate approximately 60,000 BTC during the past week.
Also read: Robinhood To Delist SOL, ADA, Matic Amid SEC’s Crypto Crackdown
