Bitcoin and the wider crypto market is experiencing FUD following the SEC suits.
Bitcoin has taken a hit towards a downward trajectory following the Securities and Exchange Commission (SEC) lawsuits against Coinbase and Binance.
The king cryptocurrency is trading at large premiums in response to the regulators flurry of suits.
Bitcoin trades at premium
Bitcoin, Ethereum, Tether’s USDT are trading at large premiums on the Binance.us platform, indicating that investors are fleeing the platform following the 13 charges suit against it.
The Binance trading pair for Bitcoin and dollars (BTC/USD) reached a high of $28,800, or $1,700 higher than the average price on other exchanges at the time, early on Wednesday morning, according to data. The BTC/USD pair is currently trading at $26,368.
The high price of premium of premium on the Binance.us platform is sign that investors are retreating in anticipation of the woes that the lawsuit may cause.
Data from the on-chain analytics company Santiment also showed that after the crash, the funding rate on Binance had drastically declined. The quantity of periodic fees that the traders in perpetual contracts exchange with one another is referred to as the “funding rate” in this context.
According to the graph above, the perpetual contract funding rate for Bitcoin on Binance had been at positive values for the bulk of the previous month, indicating that the majority of investors had a bullish outlook.
But as soon as the news of the SEC lawsuit hit, the graph showed that investors went into panic and the indicator value plunged quickly to a deep red.
Binance.us has also announced on Wednesday that it will pause trading an array of BTC, BUSD, USDT trading pairs on its Advance Trading Platform. The platform will also stop its over-the-counter withdrawal till further notice.
Read more: Bitcoin slumps briefly following SEC v. Binance lawsuit
Bitcoin moves to recover
Following yesterday’s recovery, BTC price is experiencing a test of the 50-day moving average again. It’s expected that a bullish breakout will see the price reach the $30k psychological barrier. Another rejection will see the price plunge to the $25k support level and a 200-day moving average around the $24k mark.
In the past few months, the price has maintained lower highs and lows consistently. The 50-day moving average has acted as strong resistance causing the price to fall at $28k rejection.
Many investors were earlier optimistic about the start of a bull market before the SEC’s lawsuits hit the market.
According to data from CryptoQuant, active wallet addresses that are participating in Bitcoin’s network activity have recently reduced and the metric is now currently in a downward spiral. This has been actively linked to the recent FUD in the crypto space
Disclaimer: CryptoPlug does not recommend that any cryptocurrency should be bought, sold, or held by you. Do conduct your own due diligence and consult your financial advisor before making any investment decisions.
