Bitcoin briefly surpassed the $26,000 mark on Monday morning before returning to more familiar levels below the threshold. The largest cryptocurrency by market capitalization was recently trading at $25,850, down 1% over the past 24 hours. Last week, BTC dipped below $26,000 amid a mix of Security and Exchange (SEC) lawsuits against crypto exchange giants Binance and Coinbase, as well as ongoing concerns about U.S. central bank inflation-fighting monetary policy.
Market participants now eagerly await Tuesday’s release of the May Consumer Price Index (CPI) and the Federal Reserve’s interest rate decision on Wednesday. “The Cryptoverse is stuck in limbo as regulatory fears run wild and as some investors abandon certain key exchanges,” said Edward Moya, senior market analyst at foreign exchange market maker Oanda, in an email.
Moya further explained that mainstream acceptance for crypto won’t occur with decentralized finance (DeFi) being the primary gateway. As experienced crypto traders move more of their trading volumes onto DeFi platforms, this isn’t necessarily good news for long-term growth and attracting new investors. Moya noted that ahead of the CPI report and Fed decision, Bitcoin has key support at the $25,400 region.
On the other hand, Ether was recently trading at about $1,735, down 1.8% from Sunday, caught up in a broader market downtrend that saw tokens mentioned in the SEC lawsuits underperform. SOL, the token of the Solana blockchain, plunged nearly 7%, while MATIC and ADA, the native cryptos of the Polygon and Cardano smart contracts platforms, fell about 2.8% and 1.5%, respectively. CoinDesk’s Ethereum Trend Indicator also ticked into downtrend territory, signaling sagging investor sentiment.
The trajectory of cryptocurrencies diverged from major U.S. equity indexes, which rose on the back of recent gains in large tech stocks. The S&P 500, Nasdaq, and Dow Jones Industrial Average (DJIA) all climbed, with the yield on the 10-year Treasury increasing to 3.73%. Gold, often considered a safe haven asset like digital assets, fell 0.2%.
Despite the underperformance of coins caught up in last week’s SEC actions, some observers remain optimistic. Strahinja Savic, head of data and analytics at Toronto-based crypto platform FRNT Financial, pointed out that Ripple’s XRP token lost significant ground in 2020 before rallying strongly months later. “We’ll see if the assets named in the SEC’s lawsuits show similar resilience amid the regulatory complexity coming from these (Binance, Coinbase) cases,” Savic wrote.
Source: Coindesk
