BTC and crypto market crash due to SEC lawsuit against Binance.

The US Securities and Exchange Commission (SEC) filing a lawsuit against cryptocurrency exchange giant Binance caused a significant impact on the entire cryptocurrency market on Monday, June 5. Over the past 24 hours, Bitcoin (BTC) and the broader cryptocurrency market have experienced a correction of over 4%.

At the time of this writing, the price of Bitcoin (BTC) has dropped by 4% and is currently being traded at $25,778 with its market capitalization falling below $500 billion. With this recent move, Bitcoin has lost its most important support of $26,300, and this could further drag the BTC price all the way down to $23,000.

On-chain data provider Glassnode has stated:

“The recent Bitcoin move downwards from $27.3K to $25.8K (-5.8%) has caused the percent supply in profit to decline from 69% to 62.5% (-6.5%), plunging a further 1.26M coins into loss.”

After a strong start to the year 2023, the world’s largest cryptocurrency has come under selling pressure over the last few weeks. It has already corrected by more than 15% from its 2023 high of over $30,000.

Also, the US’s increase in its debt ceiling hasn’t helped Bitcoin investors much as they wait on the sidelines for the next Federal Open Market Committee (FOMC) meeting next week on June 14. In its recent report, on-chain data provider Glassnode wrote:

“As an increasingly hostile regulatory environment is established in the US, capital appears to be flowing out, and eastward in the digital asset sector. Much of this hints to a generally risk-off environment, with the remaining capital concentrating in the more liquid majors, and a growing preference for Stablecoin capital.”

Altcoins Face Greater Correction

Along with Bitcoin, altcoins have entered a deeper correction. In its lawsuit, the SEC has named altcoins such as Binance BNB, Cardano’s ADA, Solana’s SOL, Polygon’s MATIC, Filecoin’s FIL, and Algorand’s ALGO for violating securities laws by trading on the Binance cryptocurrency exchange.

The Binance BNB coin has faced the most correction, down by 9% in the last 24 hours. All the aforementioned altcoins have also corrected in the range between 5-9% each.

On-chain data from Dune Analytics shows that cryptocurrency exchange Binance witnessed net outflows of a massive $635 million following the SEC’s lawsuit. It will be interesting to see how strong Binance can continue to stay against regulatory headwinds.

Binance and its chief CZ have received massive support from industry leaders. Cardano chief Charles Hoskinson has asked industry players to unite against the authoritarianism of the SEC and other regulatory bodies.

The total market capitalization for #Crypto is still sustaining on the 200-Week MA and 200-Week EMA.

As long as that holds, and given that the final party, #Binance, is receiving an attack, we could also be reaching the low of this correction.

— Michaël van de Poppe (@CryptoMichNL) June 6, 2023

However, investors need not panic immediately. Popular crypto trader and analyst Michael Van de Poppe noted that the crypto market is still sustaining above the 200-week moving average (WMA).

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