Bitcoin (BTC) price is down today as crypto opens a new week underperforming major risk assets.
Binance “FUD” threatens BTC price support
Data from Cointelegraph Markets Pro and TradingView shows Bitcoin (BTC) down 1.6% on the day, heading toward $26,500.
The largest cryptocurrency spent most of the weekend in a sideways trading zone with a lack of clear direction, behavior which continued into the Asia open.
The March 27 Wall Street open sparked a return to volatility, however, and at the time of writing, the downside is continuing.
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The main catalyst came in the form of news that largest global exchange Binance is being sued by United States regulators.
A document cites violation of derivatives trading rules in the eyes of the Commodity Futures Trading Commission (CFTC), which has been investigating the exchange since 2021.
“Defendants have disregarded applicable federal laws while fostering Binance’s U.S. customer base because it has been profitable for them to do so,” it claims.
A cryptic tweet from Binance CEO Changpeng Zhao, also known as CZ, which appeared to echo posts from Sam Bankman-Fried, former CEO of defunct exchange FTX, added to confusion.
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— CZ Binance (@cz_binance) March 27, 2023
Binance’s in-house token, Binance Coin (BNB), traded down 4.2% on the day at the time of writing.
Reacting, traders were keen to shake off the idea that the event would have protracted influence on asset performance, with Daan Crypto Trades calling it “CEX FUD,” referring to centralized exchanges and the concept of “fear, uncertainty and doubt,” respectively.
Probably a good idea to focus on DEX Perps and Swaps again.
They tend to outperform whenever we get any CEX exchange FUD. pic.twitter.com/kOsNf3uZkT
— Daan Crypto Trades (@DaanCrypto) March 27, 2023
“What crypto company ISN’T being sued at this point?” Scott Melker, the trader, analyst and podcast host known as the “Wolf of All Streets,” queried.
Key Bitcoin price trendline acts as magnet
Pressure on crypto markets is not being helped by United States equities — the S&P 500 was flat on the day, while the Nasdaq Composite Index was down nearly 0.7%.
Related: Will BTC ditch the bear market? 5 things to know in Bitcoin this week
The U.S. dollar index (DXY) is meanwhile consolidating after posting its own drop.
Amid mixed signals, BTC price dropped to $26,541, its lowest since March 17, before recovering.
For market participants, a key support level which could now see a test is the 200-week moving average (WMA), currently at around $25,500.
“Once again, $28,600 resistance looking very similar to the first group of attempts at $25,212 resistance,” Melker wrote in his latest BTC/USD analysis.
“Bear divs, wicks to or through resistance, multiple failures. I know ‘everyone’ is watching $25,212 for a retest as support, which would be bullish.”
“That retest of the 200 Week Moving Average may be coming sooner than later,” on-chain monitoring resource Material Indicators meanwhile continued.
“IF it holds for the monthly close that would build a compelling case for bulls. Key word, ‘IF’.”
Material Indicators co-founder Keith Alan was less upbeat. Alongside a BTC/USD weekly chart, he noted the loss of several important support lines.
“Doesn’t mean the rally is over, but these are not signs of strength. Looks like BTC is on pace for a volatile end to the Monthly candle,” he added.
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