The developments in the cryptocurrency market continue to unfold. Following the SEC’s lawsuit against Binance founder CZ and the US-based cryptocurrency company Coinbase on Monday, the crypto market experienced significant sell-offs. However, yesterday afternoon, it managed to recover all the losses it had incurred…
After the lawsuits filed against the world’s two largest cryptocurrency exchanges by the SEC, it appears that the selling pressure has subsided.
Alper Samet Yorak, an analyst at Bitay Research Department, evaluated the sector developments in line with the SEC’s decisions.
Why and how did Bitcoin recover its losses?
Although it may seem like last-minute news, the cryptocurrency market participants were aware of and expecting lawsuits against the two major cryptocurrency exchanges. While the SEC’s decisions were made to ensure control over the cryptocurrency market, cryptocurrencies are new-generation digital assets that have gained significant global attention and have proven their worth. It is important to note that the SEC’s decisions may primarily affect users in the United States. While the lawsuits can create volatility, we do not believe they will cause significant damage to cryptocurrency exchanges. Our past experiences indicate that the cryptocurrency market generally emerges stronger from such developments. In fact, the statements from Binance and Coinbase exchanges have provided confidence to investors, calming the panic in the environment.
Bitcoin, which retraced to the $25,500 level due to the lawsuits, created a buying opportunity for investors. Whales, who chose to evaluate this, interpreted the decline as an opportunity and with the reaction purchases, Bitcoin returned to the level it was priced over the weekend.
Increase in DeFi Volumes
The lawsuits filed against centralized cryptocurrency exchanges such as Binance and Coinbase have also increased the demand for decentralized finance (DeFi) platforms. Investors who wanted to withdraw their funds from these exchanges due to potential risks transferred their funds to DeFi projects, leading to an increase of over 400% in volume. This has enabled decentralized exchanges to reach a daily trading volume of $1 billion. This situation has also affected DeFi tokens. These projects showed positive divergence following yesterday’s rise. In the absence of negative news, DeFi tokens can continue their positive trajectory in the coming period, pleasing investors. Additionally, the top-performing cryptocurrencies yesterday primarily came from DeFi projects, including MTL, REN, FIS, RAD, and TOMO.”
Source: Paraanaliz