Bitcoin fell massively below $30K mark amid Regulatory Uncertainty
BTC/USD is trading at 28,627, down by 2.05% in the past day. The leading cryptocurrency, bitcoin had an upward trend last week when data indicated that US inflation started to cool. However, the crypto market declined amid legal uncertainty prevailing in the market.
- Bitcoin unexpectedly gave up its gains as a series of long liquidations drove the price of BTC/USD down.
- The regulatory uncertainty around the digital currencies caused the recent price decline.
- Bitcoin’s value has increased by more than 75% year to date, despite the current price decline.
Recently, the sell-off in the broader virtual currency market has increased. Coinglass figures show that the sudden sell-off led to the liquidation of long bets worth more than $300 million across all cryptocurrency marketplaces. Binance recorded the most liquidations ($49.9 million) out of all the tracked cryptocurrency exchanges that participated in the liquidations. A series of long liquidations led to a significant drop in BTC/USD.
Although there was no clear reason for the sell-off, regulatory uncertainty may have weighed on the market sentiments. According to a CNBC article on Wednesday, the latest cryptocurrency sell-off is a well-deserved correction after this year’s boom.
Bitcoin is down
The price of Bitcoin fell from $30,000 to retest the $29,000 mark on Wednesday, April 19, erasing gains from the previous week in only one 15-minute candlestick. That represents an almost 3% decline.
The broader crypto markets have always followed Bitcoin’s price behavior with even higher percentage drops. It is the same in this particular scenario. The global crypto market cap is $1.21T, a 1.16% decline over the last day.
Several experts claim that the market for digital currencies decreases due to unresolved regulatory issues.
Concerns about US regulatory uncertainty
Gary Gensler, the Securities and Exchange Commission chair, spoke in front of the US House Financial Services Committee on April 18 for an oversight session. The testimony alarmed cryptocurrency traders.
Despite numerous attempts from committee members, Gensler declined to clarify whether Ethereum was a commodity or security. Therefore, Republican Warren Davidson demanded Gary Gensler’s resignation as SEC chairman. Davidson grilled Gensler over his words and lack of transparency during the SEC Oversight hearing.
On April 17, the SEC filed legal action against Bittrex, a cryptocurrency exchange. According to the complaint, Bittrex is an unlicensed national securities exchange, broker, and clearing business.
Additionally, the leading cryptocurrency exchange Binance and its CEO Changpeng Zhou were the subjects of a regulatory violations complaint filed by the Commodities Futures Trading Commission (CFTC) on March 27. The cryptocurrency exchange and its director were sued by the US regulator on claims that the business knowingly violated federal law by offering unregistered crypto derivative products in the US.
Moreover, traders were reflecting on Gensler’s unsettling congressional testimony on Tuesday, during which he defended his agency’s crackdown on digital currencies trading platforms but did not provide any clear answers. Therefore, the lack of regulatory clarity worried the crypto market traders. According to the analyst, the primary driver of the recent decline in bitcoin (BTC/USD) has been the regulatory uncertainty surrounding the cryptocurrency industry.