Bitcoin in Freefall as Regulators Turn Attention to Binance
A businessman hanging on for dear life.
The new week starts worse than expected for Bitcoin and the cryptocurrency is already suffering from falling prices. The direct effect of the Commodities Futures Trading Commission (CFTC) suing Binance, the world’s largest crypto exchange, and its CEO Changpeng Zhao has sent Bitcoin and other assets into freefall.
Bitcoin revisits $26,000 territory
As soon as news of the CFTC broke after Binance broke, the crypto market responded quickly. The digital assets in the space already suffering from low momentum fell further, and for Bitcoin, this meant that the cryptocurrency revisited the $26,000 territory.
After hitting a nine-month high of $28,500, BTC had corrected back to below $28,000, where it trended for the better part of a week. But the fear, uncertainty and doubt (FUD) that is currently in a stranglehold dragged it down even further.
Interestingly, the trading volume of the cryptocurrency has increased during this time. It is up 30% in the last day when it crossed $19 billion, but this is the only green coin. At the time of writing, BTC has already fallen as low as $26,606, representing a loss of over 4.4% during this time.
BTC price falls below $27,000 again | Source: BTCUSD on TradingView.com
Investors run on Binance
As expected, investors have withdrawn large amounts of cryptocurrency from the Binance crypto exchange since the CFTC lawsuit was announced. In one day, more than 4,750 BTC have been withdrawn from Binance alone, bringing the exchange’s total BTC balance down to 534,796.11 BTC, according to data from Coinglass.
Some of the BTC being moved away from Binance appears to be moving into competitors, some of which have seen positive BTC inflows over the past day. These include, among others, Bitstamp, Coinbase, Bitfinex, BitFlyer and ByBit.
BTC rotate out of Binance to other exchanges | Source: Coinglass
These withdrawals reflect how investors are currently dealing with the news, choosing to protect their coins to prevent a repeat of FTX where investor funds are still stuck. However, CZ has already denied the allegations levied by the CFTC, and a rebuttal is likely expected.
Nevertheless, the impact on the market is still evident as Binance is arguably the largest player in the crypto industry, and if something were to happen to the exchange, it would be devastating to the entire crypto sector.
Binance’s native cryptocurrency, BNB, has underperformed the news compared to other top coins. The altcoin fell 6% on the 24-hour chart to trade at $308. It also sees a cumulative loss of 8.07% on the weekly chart.
