Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- Binances’ legal woes caused BTC to plummet to the $25k level.
- Due to the downturn, the offer on earnings dropped from 69% to 62.5%.
The US continued to put regulatory pressure on cryptocurrencies, with Binance Exchange back on the radar. Following an earlier CFTC filing in March, the US SEC filed a filing 13 new charges on June 5 against Binance – the world’s largest crypto exchange.
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Bitcoin [BTC] reacted negatively to the development, dropping below $26,000 and setting a new low in the second quarter.
Recent price swings below $27,000 have seen more BTC trades at a loss because uncertainty makes holders uncomfortable. At the time of going to press the cryptocurrency “Fear and Greed” Table of contents was “Fear”, signaling investors’ concerns about the market.
BTC pulls back to 50% Fib level
Source: BTC/USDT on TradingView
A Fibonacci retracement tool (yellow) was placed between the recent swing high ($31k) and the swing low ($19.5k). Since reaching a new high of $31,000 in mid-April, BTC price action has been below a trendline resistance line (white), highlighting increasing downtrend momentum in the second quarter.
The 61.8% Fib level ($26.6k) gold pocket was a critical support from the end of March. It was retested several times, but finally cracked on Monday after the Binance lawsuit.
However, sellers could further erode the prevailing bullish sentiment if they clear the hurdle at the 50% Fib level ($25.27k). Below that, likely support levels are at $23.9k and $22k.
But bulls could regain their clout if BTC regains the gold 61.8% Fib level ($26.6k). Nevertheless, bulls can only move forward and reach $28.5k if they clear the roadblock on the trendline. The next major resistance level after $28.5k is $29.8k.
Meanwhile, the OBV has remained eerily stable since the end of March, indicating unchanged and limited trading volumes. Similarly, the RSI moved to the lower ranges, highlighting increased selling pressure.
BTC’s Stock in Profit Shredded by 5%
Source: Glassnode
How many Worth 1,10,100 BTCs today?
According to Glassnode, BTC’s sharp drop from $27,000 to $25,000 saw the percentage of supply in profit drop from 69% to around 62.5%. It is worth noting that the huge supply of profits made it impossible for BTC to continue $28k as the level was a clear profit target.
It remains to be seen whether BTC will deliver a corrective bounce with the focus now on the Binance lawsuit and next week’s FOMC meeting.
