Cold feet reigns across crypto markets once again as Bitcoin bulls lose steam and Ethereum drops 15% in two days.
Bitcoin (BTC) fell to $21,000 on July 26 after it emerged that major United States cryptocurrency exchange Coinbase was under investigation.
$21,000 now “super critical” for BTC bulls
Data from Cointelegraph Markets Pro and TradingView showed a swift reversion to lower levels for BTC/USD as reports emerged of fresh legal problems for Coinbase over securities trading.
The U.S. Securities and Exchange Commission, Bloomberg originally reported, was looking into whether the exchange had allowed users to trade unregistered securities.
Part of a wider battle between the U.S. crypto industry and regulators over compliance, the move appeared to frighten the market, coming amid parallel allegations that a former executive conducted insider trading.
Ironic the peak euphoric events of the Bull Market were Tesla buying #Bitcoin and Coinbase IPO'ing on the Stock Exchange
Now in the last week Tesla has sold and Coinbase is under investigation by the SEC
— Matthew Hyland (@MatthewHyland_) July 26, 2022
With that, Bitcoin was back to defending $21,000 as support on the day, with commentator Mark Cullen stressing that the level must hold for bulls to stay in control.
“The 21k level for BTC is super critical for the bulls to hold if they have any hope of this regaining a bullish posture,” he told Twitter followers.
“A 4hr close below there and the bitcoin ball is well and truly in the [bears’] court.”
Trader Crypto Tony eyed a slightly lower level as a short-term floor, warning that a “drop deeper” was nonetheless a likely future outcome.
$20,700 is my target on this drop, following my chart yesterday. Looking for at least another drop to that level, but i do think we drop deeper ‼️ pic.twitter.com/WXYUCWZm6O
— Crypto Tony (@CryptoTony__) July 26, 2022
For its part, Coinbase had been anything but passive in the U.S. regulatory debate, last week releasing a dedicated blog post on why the SEC should change course.
“If the Commission starts an open process where all of us can provide input, we look forward to sharing our thoughts on how to answer the important questions our petition raises, and we would encourage others to do the same,” chief policy officer Faryar Shirzad wrote.
“We may not agree every step of the way, but it’s critical that this is an open and transparent process, where the public has a chance to offer their views. Policymaking at this level is far too important to be made in a black box.”
Coinbase shares were down 3.7% pre-market, adding to 5.3% losses the previous day.
Trader warns Ethereum could “take out lows” next
A similar mood was visible on altcoin markets, with fellow account TraderSZ forecasting a return to $1,000 for Ether (ETH) even before the bulk of Bitcoin’s losses materialized.
Related: Will the Fed prevent BTC price from reaching $28K? — 5 things to know in Bitcoin this week
ETH/USD, previously the best performer in the July crypto market rebound, traded at just over $1,400 at the time of writing. Versus its peak on July 24, the pair was down 15%.
On July 25, TraderSZ warned that Ethereum and Bitcoin could both soon challenge lows, the latter aiming for $18,500.
i dont like the way ethusd looks…i think even if it wants to go higher, makes more sense to take out the lows…which means btc could squeeze lower. going to cut my btc long. if it is low, il get back in higher up after low is in https://t.co/u6sFHpzPH1 pic.twitter.com/6BbfmB6VRY
— TraderSZ (@trader1sz) July 25, 2022
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