The price of Bitcoin dropped 5% in the early hours of June 5 after the United States Securities and Exchange Commission (SEC) filed a lawsuit against Binance alleging violations of federal securities laws. Although Bitcoin support at $25,500 is still strong. But investors are still evaluating the potential impact of regulatory action. related to CEO Changpeng “CZ” Zhao.
Citing Arca digital asset investment firm CEO Jeff Dorman, he revealed that this would not have a direct impact on Binance US. Additionally, past non-criminal accusations should not shake Binance’s current international structure. Still, Arca CEO expects negative market sentiment to prevail. While the crypto community cheers for CZ and Binance
Binance isn’t the only thing to worry about.
Although the SEC’s litigation against Binance will have little or no impact in the medium term But there is further uncertainty coming from Digital Currency Group (DCG) and its affiliate Genesis Capital, which filed for bankruptcy on Jan. 19.
Data Finnovation and ChainArgos CEO Jon Reiter said DCG CEO Barry Silbert pulled $1 billion from his personal holdings. The same goes for hedge funds. Three Arrows Capital defaulted cryptocurrency Although this might be a coincidence. But it has attracted more attention to intercompany loans and agreements within DCG.
Traders are now skeptical that Bitcoin will test the resistance at $25,000, a level not seen since March 17th. Surprise is unlikely in the short term.
Investors should pay particular attention if the price of Bitcoin in the futures market falls below a negative spot market turnaround or if there are additional charges for hedging using BTC options.
The Bitcoin derivatives market has shown mixed reactions.
Bitcoin quarterly futures are popular among bookmakers and speculators, however, monthly contracts are typically traded in the spot market at a small premium. This indicates that the seller asked for more money to delay the settlement.
As a result, BTC futures in healthy markets should trade at 5 to 10% annual premiums, a so-called contango situation that is not unique to the crypto market.
Bitcoin traders have been cautious since June 1, as futures premiums remain below 4%. On the other hand, the indicator sits at 3.5% after the SEC charged Binance last day. on June 5
Traders should analyze the options market to understand whether recent corrections have made investors more optimistic. The 25% delta number is a sign of when speculators and market makers are charging high prices. Too much for protection against rising or falling
In short, if a trader expects the price of Bitcoin to fall, the figure will rise above 7%, and during periods of excitement often numbers will be negative 7%.
As shown above, the BTC options 25% delta skew suddenly turned bearish. Since the indicator surged to 11% on June 5th, this level is the highest in three months and signals some uneasiness from professional traders.
Bearish trend continues while FUD prevails
Basically, Bitcoin options and futures markets often indicate that the bearish trend that started after the failed $31,000 test on April 14th is still ongoing. While it may not have a significant impact on the overall market structure, it may still be too early to interpret the potential consequences of the SEC’s action, and court rulings may take months, perhaps not years, to be fully understood. terminate
Therefore, Bitcoin speculators should adjust their expectations. Because investors hate uncertainty.
Until there is more clarity on the DCG-Genesis situation and Binance’s ability to operate in the rigorous US regulatory environment. There is less incentive for long-term buyers to join and protect the $25,000 support.
2023-06-06 00:31:50
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