Bitcoin turbulence caused by US Securities and Exchange Commission lawsuits against major cryptocurrency exchanges could herald short-term gains in Bitcoin, if history is any guide.
Is Bitcoin's Latest Fall Heralded a Rise?
Bitcoin, the largest digital asset, followed a volatile movement after the SEC filed lawsuits against Binance and Coinbase.
According to data compiled by Bloomberg, similar back-to-back moves of at least 5% have occurred five times in the past two years, with an average climb of 11% over the next 30 days.
Noting that the same situation has been experienced in the past days, analysts said that an upward wave could come and $ 30,000 could be seen.
“Despite the wave of negative news, the market has shown incredible resilience,” said Caroline Mauron, co-founder of digital asset derivatives liquidity provider OrBit Markets.
"However, potential gains in the near future may be limited until more clarity is provided in the regulatory environment in the US."
The SEC on Tuesday extended its sweeping crackdown on crypto by accusing Coinbase of operating an illegal exchange. The day before, the institution filed a series of allegations of violations in the lawsuit that Coinbase filed against its rival Binance.
These moves come amid waning liquidity in the digital asset markets and lingering skepticism about the future of crypto after last year's deep crash and explosions like the bankruptcy of the FTX exchange.
“Investors are watching exits from major exchanges closely and fear something similar to the recent FTX bank operation,” Mauron said.
Net outflow from Binance fell from $702 million on Monday to $449 million on Tuesday, according to the Dune Analytics dashboard of exchange traded products issuer 21Shares AG; This was the highest level since February.
*Not investment advice.