BTC plummets as the US Commodities and Futures Trading Commission (CFTC) charged BitMEX with facilitating money laundering! BTC plunges with BitMEX falls from grace.
Samuel Reed was also arrested. Reed was one of the co-founders of BitMEX. BitMEX has been the most dominant Bitcoin futures exchange for a long time.
In recent months, competitors like Binance Futures and ByBit have significantly increased their market share. The industry expected that charges against BitMEX would happen. However, the arrest of Reed was unexpected. Immediately after the news, BTC plunged from $10,883 to $10,437. This translates to a 4.11% drop.
There are several reasons why Bitcoin will recover in the short term. The catalysts are the short duration of the current correction. Bitcoin’s previous reactions to regulatory threats support the $10,500 support level.
The cryptocurrency market has endured many negative regulatory actions. Bitcoin Researcher Vijay Boyapati says that BTC strongly recovered from each one. In the long term, BTC’s recovery is highly likely. He said:
“The Bitcoin market has always reacted negatively to major exchange issues or government confiscations. Historically this has always presented a great buying opportunity for Bitcoin. The Department of Justice action against BitMEX will be no different.”
For August and September, $10,500 acted as a strong level of support. Bitcoin dropped below $10,500 briefly, but quickly recovered.
Bitcoin continues to trade within a symmetrical triangle and $10,500 continues to act as support. $10,200 is an important price level to watch.
If $10,200 were to be breached, traders still expect $9,800 and $10,000 to hold as support as they expect buyers to excitedly purchase at these levels as they did in September.
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