BTC/USD Forex Signal: Bearish Divergence Pattern Forms – 28 March 2023
The BTC/USD price pulled back after the Commodity Futures Trading Commission (CFTC) announced a new legal challenge against Binance and its CEO, Changpeng Zhao.
The BTC/USD pair nosedived after more regulatory challenges emerged in the crypto industry. Bitcoin dropped to a low of $26,400, which was significantly lower than last week’s high of almost $29,000. It retreated even as the US dollar index fell to $102.57.
The BTC/USD price pulled back after the Commodity Futures Trading Commission (CFTC) announced a new legal challenge against Binance and its CEO, Changpeng Zhao. The regulator accused the two of breaking derivatives rules by not registering with it.
This lawsuit is a culmination of work that started in 2021 when the agency started assessing Binance’s business. It was specifically looking at whether Binance failed to keep US residents from buying and selling crypto derivatives in its platform.
Binance, the biggest exchange in the world, is also being investigated by other American regulators, including the Securities and Exchange Commission (SEC) and the Internal Revenue Service (IRS). Federal regulators have also eyed the company.
Regulators have been focusing on the crypto industry in the past few months, especially after the collapse of Terra and FTX. Last week, American prosecutors filed charges against Do Kwon, the founder of Terra. Also, Coinbase warned that it could be targeted by the SEC in a new investigation.
Meanwhile, data shows that Bitcoin liquidity has dropped to the lowest level in ten months, according to data by Kaiko, The researchers looked at the bid and ask prices in several exchanges. It is not clear why this liquidity has fallen but analysts cite the ongoing banking crisis
The BTC/USD pair also declined as the banking crisis appeared to ease. On Monday, most banking stocks jumped, with Citizens soaring by over 40%. The company received a $16 billion discount when it acquired Silicon Valley Bank.
The BTC/USD pair found a strong resistance at 28,885, where it formed a double-top pattern. It has now moved slightly above the neckline of this pattern at 26,700. The pair has dropped below the 25-day and 50-day exponential moving averages while the Relative Strength Index (RSI) has formed a bearish divergence pattern.
Therefore, Bitcoin will likely have a bearish breakout as sellers target the next key support level at $25,262, the highest point on February 16.