Here’s what happened in crypto today. The markets continued with volatile movements that decoupled the price action of cryptocurrencies from equities markets. The recent downturn in the crypto market appears connected to the Federal Reserve’s June 14 presser where Fed Chairman Jerome Powell revealed that the central bank would pause rate hikes for June.
While this move aligned with investors’ expectations, the crypto market actually reversed course and resumed the sell-off that has been in play for the past three weeks.
In the press conference after the June 14 announcement, Powell stated,
“Nearly all Committee participants view it as likely that some further rate increases will be appropriate this year to bring inflation down to 2 percent over time.”
Bitcoin (BTC) price started June 16, trading above $25,000, but then briefly retracted below $25,000. Analysts correctly predicted that a drop to $25,000 was inevitable based on the current state of BTC derivatives data. Bitcoin’s dip below $25,000 happened for the first time in 3-months but has since regained the key price level.
Following Powell’s interest rate pause, options data on June 15 highlighted potential BTC price downside.
Cryptocurrency market performance, 1-day chart. Source: Coin360
The muted crypto price action and lack of a bullish response to the rate hike pause could be the lingering effect of the SEC’s charges against Binance and Coinbase exchange coupled with new Tether (USDT) drama.
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Crypto sector regulation is still the main threat
Regulation has been a constant in the recent cryptocurrency news cycle. While the EU unveiled a digital asset framework, MiCA, the United States seems intent to regulate through SEC enforcement.
On June 5 and June 6, the United States Securities and Exchange Commission filed civil lawsuits against two of the largest centralized exchanges in crypto, Binance and Coinbase. The SEC claims that 61 different cryptocurrencies, representing $100 billion in value, are securities.
One of the 61 crypto tokens listed…
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