FX.co ★ Crypto market awaits gloomy future?

Bitcoin has swiftly found some stability after a $1,500 dip this week. This unfortunate event followed after the US Securities and Exchange Commission (SEC) filed lawsuits against significant cryptocurrency exchanges Coinbase and Binance. Bitcoin's dip was inevitable, given that the cryptocurrency has been correcting for the past two months. Losing $1,500 in value is far from a crisis for Bitcoin, as it has surged by 100% in its most recent growth cycle. Hence, it can easily regain a loss of $1,500. More intriguing is how Bitcoin will perform in the medium term, especially considering the potential unfortunate outcomes of the lawsuits for the crypto exchanges and the entire crypto market.

The SEC is demanding a whole list of tokens actively traded on both exchanges be recognized as securities and that the crypto exchanges themselves be licensed to carry out cryptocurrency operations. If the court proves that digital tokens should indeed be treated as securities, both exchanges could face a ban on providing services in the US, or they might need to obtain costly SEC permission. For instance, Coinbase derived 80% of its revenue from the US last year. Thus, losing the American market could be fatal for both exchanges. Representatives from both exchanges have stated they deny any wrongdoing and will fight the allegations. As no "crash" has occurred yet, the crypto market is reacting quite reservedly. However, if the SEC wins in court, it would be a massive blow to the cryptocurrency market.

The SEC's stance is not without grounds. What seems crucial to the commission is not the status of Bitcoin or Ethereum, but the fact that major companies are beyond its reach and unregulated, given there is no cryptocurrency regulation in the US. The very notion of cryptocurrency is so nebulous that it could be considered a security, commodity, or even a service. Thus, the tightening regulatory process we discussed years ago continues. As the cryptocurrency market grows, regulators and governments are beginning to control the massive money flows. The fight against crypto and exchanges is unlikely to stop, even if the SEC loses the lawsuit; over time, new laws will be enacted.

On the 24-hour time frame, Bitcoin has made several unsuccessful attempts to break above $29,750. As a result, the cryptocurrency began and continues a downward correction. In the near future, the crypto is expected to drop to $25,211 and $24,350. In addition, a further decline in the cryptocurrency's value cannot be ruled out. One may buy BTC after an appropriate signal is formed, such as a bounce from $25,211, $24,350, or the trendline. The downward channel on the 4-hour timeframe also plays a significant role.