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The BTC/USD pair dropped to 25,365 on Tuesday and then quickly bounced back to 27,000.
- Buy the BTC/USD pair and set a take-profit at 28,600.
- Add a stop-loss at 25,800.
- Timeline: 1 day.
- Set a sell-stop at 26,300 and a take-profit at 25,500.
- Add a stop-loss at 28,000.
The BTC/USD price bounced back even as the Securities and Exchange Commission (SEC) continued its battle against the crypto industry. After dropping to a low of 25,500, the pair soared to a high of 26,800 as traders assessed the impact of these lawsuits.
The SEC has been a bit busy this week, sending shockwaves to the broader cryptocurrency industry. On Monday, the agency sued Binance and Changpeng Zhao, the company’s CEO. The lawsuit focused on several issues, including providing unregulated products to Americans. Further, the SEC accused the company of providing broker-dealer solutions without following the law.
On Tuesday, the agency then sued Coinbase, the biggest crypto exchange in the United States for providing staking services. Staking is a process through which people deposit their tokens and earn a return for safeguarding proof of stake (PoS) projects. In its lawsuit, the SEC said that Coinbase was providing these services without following the law.
According to the SEC, the company ought to have registered with the agency. By so doing, the company would be required to submit more documents and filings to the SEC.
The SEC is also concerned that many crypto tokens are provided by companies like Binance and Coinbase, which it terms as securities. Some of the tokens mentioned in the Binance lawsuit were BNB, MATIC, and ATOM among others.
Bitcoin rebounded as investors assessed the impact of these lawsuits. For one, the SEC still believes that Bitcoin and other proof-of-work coins like Litecoin and Ravencoin are not securities. As such, there is a likelihood that more people will move to Bitcoin.
Further, Bitcoin has done well in the past major crises. For example, it did well after the collapse of FTX, Voyager, and Terra. Similarly, XRP price has done well even after the SEC filed a lawsuit against Ripple.
The BTC/USD pair dropped to 25,365 on Tuesday and then quickly bounced back to 27,000. On the 4H chart, the pair moved to the 50-period moving average and the key resistance point at 26,514, the lowest point on June 2. The Stochastic Oscillator moved close to the overbought level while the Awesome Oscillator turned green but it remains below the neutral point.
The pair will likely continue rising as buyers target the next psychological level at 28,000. However, a drop below this week’s low of 25,365 will signal that there are more sellers who could push it much lower.
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