The US Securities and Exchange Commission’s (SEC) lawsuits against major crypto exchanges Binance and Coinbase initiated a process early in the week that saw Bitcoin (BTC) and most altcoins managing to stay strong. However, as the weekend approached, the cryptocurrency market came under heavy selling pressure. So, why are Bitcoin and altcoins falling? Let’s take a closer look.
The Current Situation in the Crypto Market
After the largest cryptocurrency, Bitcoin, dipped below $26,000, the rest of the cryptocurrency market faced severe losses. As of the writing of this article, BTC traded at $25,671, representing a 3.18% drop in the last 24 hours, while the biggest altcoin Ethereum (ETH) exchanged hands at $1,770, indicating a 3.20% fall in the same period.
Among the top 50 altcoins, Cardano (ADA), Solana (SOL), Polygon (MATIC), Avalanche (AVAX), Shiba Inu (SHIB), and Toncoin (TON) saw declines of 21.63%, 20.35%, 21.71%, 17.14%, 21.56%, and 20.24%, respectively, over the last 24 hours.
Despite the sharp declines in Bitcoin and altcoins, the total market capitalization remains above $1 trillion.
Why are Bitcoin and Altcoins Falling?
The primary reasons for the cryptocurrency market remaining under selling pressure include the SEC’s lawsuits against Binance and Coinbase, the temporary court-ordered freezing of Binance.US’s assets, Binance.US being forced to suspend US dollar deposit operations, and the SEC classifying many altcoins as securities. Additionally, the US Commodity Futures Trading Commission (CFTC) winning a lawsuit against the Decentralized Autonomous Organization (DAO) Ooki DAO significantly shook confidence in the cryptocurrency market. Data reveals that US-based institutions like Jump Trading and Cumberland are selling off leading altcoins.
The SEC’s classification of MNGO, BUSD, LUNA, MIR, UST, BXY, BTT, TRX, OMG, NGC, TKN, NGC, IHT, SOL, ADA, MATIC, FIL, SAND, CHZ, FLOW, ICP, NEAR, VGX, DASH, NEXO, BNB, ATOM, MANA, ALGO, and COTI as securities in the lawsuits against Binance and Coinbase, and signaling that the majority of altcoins are securities, explain the turmoil in the altcoin market.
SEC Chairman Gary Gensler’s recent statement that the cryptocurrency market is full of scammers and that they will be pursued also led to speculation that US regulators will not back down.
Market experts and analysts expressing that the crypto market is only just starting to recover from the shock of these events earlier in the week warn that heavy selling may continue in altcoins due to the securities issue.
