The crypto market traded sideways last week amid a crackdown on the largest crypto exchange Binance. Earlier this week, the US Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance for trading against customers, misusing internal trading channels and making unregulated derivative markets.
This was followed by Bitcoin, the largest crypto token by market cap, touching its highest level of $29,000 since last June. But soon, it fell from the highs. On Friday, it was trading at $27,923, down 0.45 per cent since last week.
Ethereum, the second-largest digital token, was up 0.33 per cent to $1,794 last week.
"Surprisingly, last week, it was not the securities regulator SEC but the commodities regulator CFTC, that launched a slew of accusations against Binance. Binance is planning to fight against these claims in court," said Parth Chaturvedi, crypto ecosystem lead at crypto exchange CoinSwitch.
"Today, BTC is consolidating above the crucial $28,000 level, likely due to the US GDP report. A bullish trend line is in place offering support around $27,900," said Alankar Saxena, CTO and co-founder at crypto firm Mudrex.
The recently released US GDP data noted a slowdown in growth rate from 3.2 per cent in the previous quarter to 2.6 per cent in the fourth quarter of 2022-23 (FY23).
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What to expect in the coming days?
"While Bitcoin and Ethereum showed a move to the upside at the end of the week, a lot of ongoing challenges are yet to be fixed for the industry before a sustainable move is seen," said Anurag Dixit, founder of crypto firm Kunji.
According to Saxena, Bitcoin is currently facing resistance at the $28,500-$28,850 zone, and its primary uptrend support remains strong. However, it lacks the momentum for a "significant move".
A major event to watch out for in the coming days is the significant drop in liquidity and trading volumes, particularly on Binance.
"Such conditions can be accompanied by high volatility in prices on either side, as large orders can sway prices rapidly. The regulatory fallout too continues to keep markets on shaky grounds," said Chaturvedi.