Amidst Bitcoin’s turbulent trajectory, as it trades at $25,187, marking a 2.16% decline on Tuesday, the broader cryptocurrency landscape undergoes notable transformations.
The overall cryptocurrency market capitalization has now dipped below the $1 trillion mark, primarily due to significant players, often referred to as ‘whales,’ shedding Bitcoin and Ethereum holdings.
In an additional cause for concern, Gary Gensler, ahead of his Senate testimony, has reiterated his reservations about cryptocurrencies, rehashing familiar criticisms.
Concurrently, in anticipation of stricter regulations, Luno, a prominent cryptocurrency exchange, has taken preemptive measures by restricting certain UK clients from participating in digital currency investments.
Cryptocurrency Market Cap Falls Below $1 Trillion as Whales Unload Bitcoin and Ethereum
The cryptocurrency market has experienced a downturn, marking a six-month low as its total capitalization dropped below the $1 trillion threshold.
This 2.84% decline led to a reduction of nearly $29 billion in the market’s overall value, leaving it slightly above $987 billion.
The decline was driven by concerns related to Solana and the FTX hearing, prompting investors to engage in panic selling—an unusual occurrence in recent months.
The bearish sentiment was further compounded by significant trading firms like Jump Trading, Abraxas Capital Management, and Wintermute Trading depositing more than $30 million worth of Bitcoin, Ethereum, and Arbitrum on various exchanges.
In the futures market, the past 24 hours witnessed a notable liquidation of long contracts, totaling nearly $150 million, the highest in three weeks.
These developments pose challenges for investors seeking to recoup losses in the current bearish climate, consequently causing a decline in the price of Bitcoin (BTC) today.
Gary Gensler Firmly Addresses Cryptocurrency Concerns in Anticipation of Senate Testimony
The Chair of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, remains steadfast in expressing his concerns regarding the cryptocurrency industry, despite recent legal challenges faced by the SEC.
As he prepares for his upcoming testimony before the Senate Banking Committee, Gensler continues to emphasize the sector’s apparent non-compliance with securities laws.
He highlights that a majority of crypto tokens likely fit the criteria for investment contracts, implying that they should be subject to securities regulations.
This stance comes in the aftermath of two significant court rulings – one favoring Ripple in its XRP case and another against Terraform Labs – both of which have implications for the SEC’s ongoing legal battles with cryptocurrency companies.
While Gensler will touch upon recent enforcement actions and proposed regulations affecting crypto firms, he will refrain from commenting on ongoing litigation, including the SEC’s high-profile cases involving Coinbase and Binance.
This ongoing regulatory scrutiny and Gensler’s stance may have contributed to the current decline in the price of Bitcoin (BTC) today.
Luno Strengthens Investment Limitations in the UK in Anticipation of Upcoming Cryptocurrency Regulations
Cryptocurrency exchange Luno has disclosed its intention to temporarily suspend certain UK clients’ ability to invest in cryptocurrencies, aligning with the Financial Conduct Authority’s (FCA) impending enforcement of new crypto promotion rules by October 8.
Luno’s implementation of this measure is scheduled for October 6, just two days ahead of the regulatory deadline. These regulations categorize cryptocurrencies as “restricted mass market investments” and necessitate explicit warnings, as well as a prohibition on incentives in crypto-related advertisements.
Nick Taylor, Head of Public Policy at Luno, explained that these changes are essential to comply with the FCA’s new regulations, resulting in the suspension of investment services for select UK customers.
It is worth noting that PayPal has also announced a similar temporary suspension of crypto purchases in response to these regulations, extending until 2024.
Clients affected by Luno’s decision will still have the ability to sell and withdraw their assets, with plans to gradually reintroduce investment opportunities.
This regulatory development and Luno’s response may have played a role in the current decline in the price of Bitcoin (BTC) today.
Forecast for Bitcoin’s Price
In a technical assessment of Bitcoin, the leading cryptocurrency has experienced a significant downturn. It has breached a critical triple bottom support level at $25,400, as evident from the triple bottom pattern observed on the 4-hour timeframe. Additionally, the presence of a “Three Black Crows” pattern within the same timeframe suggests the potential for a bearish continuation.
Currently, Bitcoin finds itself in oversold conditions, with the RSI (Relative Strength Index) below 30, hinting at the possibility of seller exhaustion and a potential short-term bullish recovery. Meanwhile, the MACD (Moving Average Convergence Divergence) remains in the sell zone, underscoring the prevailing bearish sentiment. Despite Bitcoin’s price hovering around $25,200, it remains situated below the 50-day EMA (Exponential Moving Average) at $25,500, thus confirming the ongoing bearish trend.
From a technical perspective, it is anticipated that resistance will materialize around the $25,400 level. There could be a transient upswing towards $25,600 before a more substantial decline, possibly down to $24,800.
Should Bitcoin breach this level, the next support stands at $24,000. An important obstacle looms around the $25,600 threshold; a successful breakthrough could potentially propel Bitcoin to reach $26,400 or even $27,000. In summary, today’s pivotal trading point appears to be the $25,600 mark.
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