Bitcoin price has just retreated 5% from the now-declined retest of the asset’s current all-time high. The leading cryptocurrency by market capitalization struggled with resistance, but news that Binance is the focus of a CFTC investigation caused the pullback to deteriorate sharply.
Here’s a quick rundown of what’s going on in this evolving situation, and what it could mean for the ongoing uptrend in cryptocurrency.
Breaking: Commodity Futures Trading Commission opens investigation into Binance
The leading cryptocurrency exchange Binance is the subject of an ongoing CFTC investigation, according to a recent report from Bloomberg News. The Commodity Futures Trading Commission is investigating whether Binance serves US customers and enables them to trade cryptocurrency derivatives that violate US regulations.
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The CFTC, along with the Securities and Exchange Commission, is one of the most important regulatory authorities in the USA and has initiated investigations into BitMEX and Tether in the past.
Binance accounts for a lion’s share of the total trading volume in the cryptocurrency market, and its footprint extends to CoinMarketCap and almost everywhere else the industry touches. The significance of the breaking news led Bitcoin to contribute to its now 5% retreat from recent highs.
Bitcoin price has been down 5% so far, but could there be more downside moves? | Source: BTCUSD on TradingView.com
Could negative news change the mood and derail the Bitcoin Bull Run?
Bitcoin price is undeniably overheated by most standards. Tech specs have been creating bearish divergences for months, overbought conditions prevailing for most of the time, but withdrawals have been short-lived as dip buyers get BTC at whatever price they can get.
But if the technicals are overheated, what could start as a small 5% correction on negative news could have a butterfly effect causing price action and sentiment to reset.
Related reading | Bitcoin could close March with the first quarterly bear signal
Bitcoin has spent almost a full year in an uptrend with very little time spent making corrections. On the anniversary of the catastrophic Black Thursday sell-off, a certain amount of panic could still be in the air, creating a domino effect and Bitcoin falling further.
Currently the support holds at $ 55,000, but a loss could result in a further drop to $ 50,000 if the support needs to be held or risk a major reversal.
Featured image from deposit photos, charts from TradingView.com
