The cryptocurrency market fell 7% below $1 trillion on June 10, continuing its decline in the week that saw the industry’s biggest exchanges, Binance and Coinbase, facing regulatory actions by the U.S. Securities and Exchange Commission (SEC).
Bitcoin (BTC), the leading cryptocurrency by market capitalization, dropped 3.75% to around $25,500. Second-largest cryptocurrency Ether (ETH) fell 6.9% to around $1,700, its worst level in two months.
Nonetheless, the tokens deemed “unregistered securities” in the SEC lawsuits were among the worst performers on June 10. Namely, Cardano (ADA), Solana (SOL), and Polygon (MATIC), which fell 22%, 25%, and 30% on the day, respectively.
What crashed the crypto market?
The crypto market’s decline on June 10 appeared a day after Robinhood decided to delist SOL, ADA, and MATIC from its online trading platform beginning June 27, citing “a cloud of uncertainty around these assets” amid the SEC crackdown.
$1.3 billion worth of #alts (excluding #BTC , #ETH and #DOGE) held at Robinhood could be dumped on the market over the next 2 weeks, and the market is dumping in anticipation of that.
The majority of them will be of $SOL, $MATIC and $ADA.
That’s why the market is…
— BITCOIN EXPERT INDIA (@Btcexpertindia) June 10, 2023
In addition, Crypto.com suspended its institutional investment services in the U.S.
Binance reportedly dumping $4.4 billion in crypto assets in recent weeks may have also contributed to downward price pressure with independent analyst Googly noting a substantial drop in the exchange’s “proof-of-reserves.”
Binance founder Changpeng Zhao, or “CZ,” a co-accused in the SEC lawsuit, refuted the claims.
Meanwhile, the Bitcoin price drop caught bullish options traders by surprise liquidating long positions worth over $340 million in just 24 hours, according to Coinglass data.
Stablecoin supply data hints at buying ahead
The duration of the crypto market decline has coincided with an increase in the supply of Tether (USDT), the largest stablecoin by market capitalization.
However, other top stablecoins, including USD Coin (USDC) and Binance USD (BUSD), have decreased in market capitalization.
This is supported by considerable flows from cryptocurrencies to Tether addresses in general. Santiment data shows that most of these Tether addresses belong to rich investors, i.e., entities that hold more than 100,000 USDT.
Most notably, entities holding between $100,000 and $1 billion in USDT have increased in June. In contrast, addresses with a balance north of 1 billion USDT have witnessed a drop in supply; these entities could be crypto exchanges.
“Stablecoin market caps may be declining a bit lately. But it doesn’t look like sharks and whales are the ones making them sink,” noted Brian Q, analyst at Santiment, adding:
“Therefore, we have encouraging signs that show that the key stakeholders with the most power in the markets are still ready to boost crypto whenever the time is optimal for them.”
Big crypto market rebound possible?
Some analysts are certain that the current downtrend is nothing new for Bitcoin and the cryptocurrency market as a whole.
Yes remember very well, and also remember that many so called expert out from $BTC at $3000 and than #bitcoin jump $19500 in next 3 month.https://t.co/7GnBog9JEU
— Nilesh Rohilla | Crypto Analyst (@nilesh_rohilla) June 10, 2023
But from a technical perspective, the crypto market cap has broken below its key long-term support of the 200-week exponential moving average (200-week EMA; the blue wave in the chart below), which raises its downside prospects in 2023.
Related: Bitcoin price can gain 60% if ‘textbook’ chart pattern confirms — Trader
A decline further below the 200-week EMA would likely see a market cap of $875 billion next, down 25% from current levels.
On the other hand, bulls will argue that the weekly chart has painted an inverse-head-and-shoulders (IH&S) pattern, whose price target for 2023-2024 sits around $2.23 trillion, more than double the current worth.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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