Why is the crypto market down today?
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Why is the crypto market down today?

The crypto market is down today after Robinhood announced delisting of “unregistered securities” tokens from its platform.

Why is the crypto market down today?

MARKETS NEWS

The cryptocurrency market fell 7% below $1 trillion on June 10, continuing its decline in the week that saw the industry’s biggest exchanges, Binance and Coinbase, facing regulatory actions by the U.S. Securities and Exchange Commission (SEC).

Bitcoin 

BTC

$25,737

, the leading cryptocurrency by market capitalization, dropped 3.75% to around $25,500. Second-largest cryptocurrency Ether 

ETH

$1,750 fell 6.9% to around $1,700, its worst level in two months.

BTC/USD and ETH/USD daily price chart. Source: TradingView

Nonetheless, the tokens deemed “unregistered securities” in the SEC lawsuits were among the worst performers on June 10. Namely, Cardano 

ADA

$0.261

, Solana 

SOL

$15, and Polygon MATIC$0.6002, which fell 22%, 25%, and 30% on the day, respectively.

MATIC/USD, ADA/USD, and SOL/USD daily price chart. Source: TradingView

What crashed the crypto market?

The crypto market’s decline on June 10 appeared a day after Robinhood decided to delist SOL, ADA, and MATIC from its online trading platform beginning June 27, citing “a cloud of uncertainty around these assets” amid the SEC crackdown.

In addition, Crypto.com suspended its institutional investment services in the U.S.

Binance reportedly dumping $4.4 billion in crypto assets in recent weeks may have also contributed to downward price pressure with independent analyst Googly noting a substantial drop in the exchange’s “proof-of-reserves.”

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Binance founder Changpeng Zhao, or “CZ,” a co-accused in the SEC lawsuit, refuted the claims.

Meanwhile, the Bitcoin price drop caught bullish options traders by surprise liquidating long positions worth over $340 million in just 24 hours, according to Coinglass data.

Liquidations by crypto asset as of June 10. Source: Coinglass

Stablecoin supply data hints at buying ahead

The duration of the crypto market decline has coincided with an increase in the supply of Tether 

USDT

$1.00

, the largest stablecoin by market capitalization.

However, other top stablecoins, including USD Coin 

USDC

$1.00

 and Binance USD 

BUSD

$1.00, have decreased in market capitalization.

Stablecoin aggregate supplies. Source: Glassnode

This is supported by considerable flows from cryptocurrencies to Tether addresses in general. Santiment data shows that most of these Tether addresses belong to rich investors, i.e., entities that hold more than 100,000 USDT.

Most notably, entities holding between $100,000 and $1 billion in USDT have increased in June. In contrast, addresses with a balance north of 1 billion USDT have witnessed a drop in supply; these entities could be crypto exchanges.

Tether supply distribution among whales and sharks. Source: Santiment

“Stablecoin market caps may be declining a bit lately. But it doesn’t look like sharks and whales are the ones making them sink,” noted Brian Q, analyst at Santiment, adding:

“Therefore, we have encouraging signs that show that the key stakeholders with the most power in the markets are still ready to boost crypto whenever the time is optimal for them.”

Big crypto market rebound possible?

Some analysts are certain that the current downtrend is nothing new for Bitcoin and the cryptocurrency market as a whole. 

But from a technical perspective, the crypto market cap has broken below its key long-term support of the 200-week exponential moving average (200-week EMA; the blue wave in the chart below), which raises its downside prospects in 2023.

Related: Bitcoin price can gain 60% if ‘textbook’ chart pattern confirms — Trader

A decline further below the 200-week EMA would likely see a market cap of $875 billion next, down 25% from current levels.

Crypto market cap weekly performance. Source: TradingView

On the other hand, bulls will argue that the weekly chart has painted an inverse-head-and-shoulders (IH&S) pattern, whose price target for 2023-2024 sits around $2.23 trillion, more than double the current worth. 

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