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Maybe Bitcoin didn’t bottom? SEC lawsuit against Binance shakes BTC bulls’ confidence

Maybe Bitcoin didn’t bottom? SEC lawsuit against Binance shakes BTC bulls’ confidence

Bitcoin’s price declined 5% in one hour on June 5 after the United States Securities and Exchange Commission (SEC) filed a lawsuit against Binance on allegations of violating federal securities laws. Even though the $25,500 support held for Bitcoin, investors are still digesting the potential impacts of the regulatory action, which also involves Binance CEO Changpeng “CZ” Zhao.

According to digital asset investment firm Arca CEO Jeff Dorman, the direct impact of an eventual shutdown of Binance operations in the U.S. is irrelevant. Furthermore, non-criminal charges from the past should not destabilize Binance’s present international structures. Still, Arca’s CEO expects negative market sentiment to prevail as the crypto community cheers for CZ and Binance.

Binance is not the only pressing concern

Even if the SEC charges against Binance have little to no impact in the medium term, there’s additional uncertainty coming from Digital Currency Group (DCG) and its subsidiary Genesis Capital, which filed for Chapter 11 bankruptcy on Jan. 19.

According to Jon Reiter, CEO of Data Finnovation and ChainArgos, DCG CEO Barry Silbert pulled $1 billion out of his personal holdings just as cryptocurrency hedge fund Three Arrows Capital defaulted. While this could have been a coincidence, it certainly draws even more attention to the intercompany loans and deals inside DCG.

Traders now question whether Bitcoin (BTC) will test the $25,000 resistance, a level unseen since March 17. Considering that the U.S. debt ceiling crisis has been averted, the odds for a surprise Bitcoin price rally seem even more unlikely in the short term.

Investors should be especially attentive if Bitcoin futures contract premiums flip negative or if increased costs for hedging using BTC options occur.

Bitcoin derivatives markets show a mixed reaction

Bitcoin quarterly futures are popular among whales and arbitrage desks….

Click Here to Read the Full Original Article at Cointelegraph.com News…