© Reuters
Investing.com – Things are getting worse on the , with the cryptocurrency dropping to a low of $28,931 on Monday afternoon, and trading at $29,150 at the time of writing.
Note that this weakness in BTC seemed to respond to the publication of a Wall Street Journal article about Binance.
Bitcoin drops, WSJ accuses Binance of wash trading
The WSJ has indeed revealed that Binance CEO Changpeng “CZ” Zhao suggested in a private conversation that affiliates of the cryptocurrency exchange carried out “wash trading” several years ago.
This practice consists of exchanging an asset with oneself or with an affiliate. The result is that there is no economic substance to the trades, which can inflate both prices and trading volume, an illegal practice in stock markets for nearly 100 years.
Last month, the Securities and Exchange Commission sued Mr. Zhao and Binance.US, alleging that a company he controlled had inflated trading volumes.
However, this is an important subject, as the SEC has received several Bitcoin spot ETF proposals in recent weeks. It should be recalled that the regulator has already refused such requests several times, citing the risk of market manipulation.
Thus, if wash trading is indeed a widespread practice, it will provide grist for the SEC’s mill, and may provide it with a reason to deny recent new demands, albeit from high-profile players such as BlackRock (NYSE:) and involving sensible oversight agreements to mitigate the risks of manipulation.
This explains why the WSJ article sent shockwaves through the entire crypto market.
Note that now, the attention of Bitcoin traders should turn to the Fed’s decision expected tomorrow evening.
Technical thresholds to watch on Bitcoin
From a graphical point of view, it should be noted that Bitcoin sent an important bearish signal on Monday by breaking below the lower limit of the horizontal channel which had framed its evolution for more than 2 weeks.
Besides the psychological threshold of $29,000 tested yesterday, the next potential support will be the 100-day moving average, currently located at $28,440. Further down, the $28,000 and $27,000 thresholds, then the 200-day MA at $26,325 will be the next supports.
On the upside, the lower limit of the horizontal channel from which BTC has just extracted from the bottom, at around $29,600, is an immediate resistance, before $30,000 and $31,000, then this year’s high at $31,800.