Crypto market calm after yesterday’s collapse

Yesterday, following the publication of the news of the SEC’s complaint against Binance, there was a small collapse in the crypto markets. 

To many it seemed like a significant collapse, although in reality it was actually nothing abnormal. The fact is that after two and a half months of lateralization many investors and speculators were no longer used to such movements, especially newcomers. 

Yesterday’s crypto market crash

Yesterday’s drop was sharp and sudden, but perhaps not even so large that it could be called a true collapse. 

On crypto markets -10% in a day is quite common, while yesterday for example the price of Bitcoin lost less than 6% in the space of four and a half hours. It then made a very small rebound returning to the $25,700 mark, a share it is still holding now. 

In light of this data, yesterday’s drop should not be called a true collapse, in crypto markets, although the drop was large enough to be called a collapse when compared with the general trend in traditional financial markets. 

Yesterday, for example, the S&P 500 lost 0.2%, and the Dow Jones 0.6%. 

A somewhat different story applies to BNB, Binance’s cryptocurrency, which lost 10% and then recovered a bit and settled around -8%. 

Today BTC is losing only a little over 4% from yesterday, and ETH only 3%. 

The reaction of crypto assets after yesterday’s crash

Today’s reaction of the crypto markets seems to be that of the calm after the storm. 

After all, in the past few days, reports had begun to circulate about abnormal openings of many long positions in the crypto futures market, so much so in fact that they were hinting at a possible dump. 

Add to that a global financial market that is not in great shape, due mainly to the upcoming issuance of large amounts of bonds by the US government, and news like that from Binance, and there were the perfect conditions for a descent. 

However, that descent seems to have already petered out, so much so that today it would appear that the crypto markets are back to lateralizing, albeit at a lower level. 

The extent of the decline

Taking Bitcoin‘s price as a reference, the current level is in line with the monthly lows of May. 

Until 17 March, it had not yet managed to surge above $25,000 in the new year, but as of that very date it has not fallen below that figure. 

Indeed, it has fluctuated for more than two and a half months within a compressed price range, between $26,000 and $29,000 with a few exceptions. 

The most glaring exception was reaching $31,000 in mid-April, but it was short-lived. 

The other two exceptions were precisely the two monthly lows in May at $25,800. 

Yesterday it actually fell as low as $25,400, but thereafter it moved just below the lows of May. 

However, if one compares the June low touched yesterday with the prices prior to 17 March, it turns out that it is higher than almost all the prices touched from the beginning of the year until the day before, with one brief exception. 

For example, in February it never exceeded $25,300, so the current price level still looks like a safe level. 

Note that $25,000 does indeed seem to be the minimum threshold of caution below which the 2023 uptrend could reverse, but above which that trend does not yet appear to have been affected. 

In light of this, it is possible to say that the magnitude of yesterday’s decline was not particularly pronounced, although it came close to breaking this year’s uptrend. 

Ethereum’s resistance

As for the price of ETH, the situation actually looks slightly better. 

In fact, the current price of $1,815 is perfectly in line with that of March and May, lower only than that touched during the April mini-bubble due to the Sepolia update. 

To be fair, even the definition of a “mini-bubble” seems excessive for a rise that was indeed brief, but also of relatively small magnitude. 

In other words, Ethereum‘s price is continuing to lateralize even despite yesterday’s decline. 

It is worth noting that the minimum threshold for attention seems to be around $1,700, which is a figure that was not approached yesterday, as the drop stopped at $1,770. 

Everything in the normal range

In conclusion, it can be said that what happened yesterday is perfectly within the norm, as far as the crypto markets are concerned, except for BNB and those high volatility tokens, such as PEPE.

BNB is down +13% since the beginning of the year, while BTC is still at +54% and ETH at +51%. 

The $348 touched in mid-April seems to be decidedly distant now from the current $277, and even more distant are the $354 touched in November last year, just before BTC marked the bottom of the bear-market. 

For Binance Coin, the period of lateralization seems to have begun in June last year, even though it has had a decidedly pronounced volatility these past twelve months, although not at all abnormal. 

In other words, for BNB the uptrend of 2023 has already been broken for more than a month, while for Bitcoin and Ethereum it seems to have taken only a pause for now. 

All of this is within the norm for crypto markets, although to many just entering it might seem otherwise.