- Bitcoin’s value has dropped below $26.5K due to broader crypto market turbulence, primarily induced by regulatory fears linked to Binance and Coinbase.
- The parallel decrease in Bitcoin, Ether, and stablecoin balances since 2022 could provide additional insight into future crypto price direction.
In the face of widespread uncertainty surrounding Binance and Coinbase, Bitcoin has plunged below the $26.5K mark, manifesting a broader downturn across the cryptocurrency market. Concurrently, a significant drop in Bitcoin and Ether prices since 2022 parallels a decrease in stablecoin balances over the same duration, potentially illuminating the forthcoming direction of crypto prices.
Wednesday observed Bitcoin reverting to a declining trend amidst an extensive crypto dip that included altcoins implicated in recent SEC lawsuits against Binance and Coinbase. The most significant cryptocurrency by market capitalization was trading at $26,364, reflecting a 3.2% reduction over the past 24 hours.
Ruslan Lienkha, Chief of Markets at Web3 crypto and fiat service provider YouHodler, conveyed in an email to CoinDesk his expectation of heightened volatility “for days or even weeks” as a result of the SEC suits. Despite this, he acknowledged that the crypto market appears better equipped for possible outcomes and that market participants have significantly improved their risk management practices compared to a few years ago.
Ether’s performance was marginally better than Bitcoin, trading at $1,834, down by 2.7% from Tuesday. CoinDesk Indices’ Ether Trend Indicator (ETI), which gauges price momentum, suggested that
“recent bullish price action is outpacing previous price moves.”
However, the impact of SEC’s lawsuits remained significant. Binance Smart Chain’s native token, BNB, witnessed a 7.6% decline from Tuesday, and top-ten tokens by market capitalization such as Cardano’s ADA, Polygon’s MATIC, and Solana’s SOL, all mentioned in the SEC filing, also experienced a decline between 6% and 9%.
Meanwhile, insights from on-chain data firm Glassnode indicate that the quantity of stablecoins held on exchange addresses has decreased from 32 billion to 19 billion between January 2022 and June 2023. With the price of both Bitcoin and Ether down 45% and 50% respectively over the same period, increases in the stablecoin exchange balance for the remainder of 2023 could be an indication of a likely rise in buying demand.