Why is the crypto market down today – Is it the weekend effect or something else?

In this post:

  • Crypto markets experienced significant declines on June 10 as the weekend effect kicked in.
  • Fears have taken root as SEC goes after tokens labeling them as securities, making trading hard.
  • Shiba Inu takes a massive loss as its millionaires tank.

Crypto markets experienced significant declines on June 10, with tokens such as Solana’s SOL, Polygon’s MATIC, and Cardano‘s ADA falling by double-digit percentages before partially recovering. Factors contributing to the decline include rumors of a fund selling its holdings, concerns over regulatory actions by the SEC, and Robinhood’s decision to remove certain altcoins from its platform. 

The events highlight the crypto market’s fragility and potential for price manipulation. Throughout crypto history, the weekend is known to have negative effects on trading, and prices tend to tank.

SEC lawsuits and regulatory concerns shake crypto investors

While tokens like Solana’s SOL, Polygon’s MATIC, and Avalanche’s AVAX saw double-digit percentage decreases, altcoins like Cardano’s ADA fell as much as 25% on June 10 before reversing some of the loss. As of 11 a.m. in New York, bitcoin was down around 3%. Ether, which was placed second, previously lost 5.6% to reach its lowest point since late March.

Even minor trades can significantly impact the crypto market on weekends when activity is normally lighter. This time, investors were already on edge when the SEC filed lawsuits against market leaders Binance Holdings Ltd. and Coinbase Global Inc. earlier in the week and labeled a plethora of cryptocurrencies, including SOL, MATIC, and ADA, as unregistered securities.

The rumor that a fund had allegedly sold all of its token holdings added to the unease. Although market analysts stated there was no reason to believe the story was true, an image of a bogus news item about the liquidation was shared on Twitter. Additional rumors of selling pressure surrounding Robinhood Markets Inc.’s intention to remove some altcoins from its platform on Friday fueled the unfavorable attitude.

According to Noelle Acheson, a former market insights director at Genesis Global Trading Inc., there could be additional factors contributing to the price decline, such as a significant holder or fund selling its holdings or an effort to drive prices down to cover short bets.

In her June 10 newsletter, Acheson cautioned that exiting the market during early morning UTC time could significantly impact prices. She emphasized that the day’s movement should be seen as concerning beyond just the lower prices, reminding investors of the fragile nature of the current market and the potential for price manipulation.

Tokens may become more difficult to trade if they are labeled as unregistered securities because exchanges may be reluctant to list them for fear of upsetting the SEC. According to media reports, Robinhood announced on June 9 that as of June 27, it will stop trading Solana’s SOL, Cardano’s ADA, and Polygon’s MATIC.

According to Spencer Hallarn, a derivatives trader at the cryptocurrency investment firm GSR, the fact that the tokens would be sold at the end of the month if not moved, regardless of whether the physical tokens owned by Robinhood have moved or not, sets in motion a very simple trade for people to pre-position for. 

SHIB faces selling pressure and drops 18.3% in value

The transfer of 4 trillion Shiba Inu coins to Binance was disclosed as a notable transaction on June 9 by blockchain tracker Whale Alert. Before the price of Shiba Inu fell, this SHIB’s value was $31.7 million, and it cost just $1.78 in fees.

Although there have been many responses to the transaction, market participants noted that it boosted the number of Shiba Inu tokens in circulation by 1% to 578.9 trillion. Shibburn data shows that the unstaked tokens also decreased the total amount of staked SHIB tokens to 10.41 trillion.

Due to the transaction, SHIB experienced heightened selling pressure and dropped 18.3% in the last day to $0.00000648. However, the price development throughout the reporting period reflects the general direction of the cryptocurrency market.

Investor enthusiasm and mood toward the business have been dampened by the recent regulatory issues the biggest crypto exchanges in the space are dealing with.

The price decrease pushed the percentage of SHIB investors holding at a loss to 89%. The number of “SHIB millionaires,” as determined by the blockchain analytics company, also decreased to 1,207.

BNB crypto plunges amid SEC allegations and market sentiment

A significant few days of enforcement operations against the US crypto industry were part of the events of the previous week. The SEC charged Changpeng Zhao, the company’s founder, with misusing client funds, deceiving investors, and violating securities laws. Binance described the SEC move as disappointing and stated that it would vigorously defend its platform.

In addition, the SEC has also accused Coinbase of operating an illegal exchange. However, Coinbase has refuted this claim and stated that it is ready to appeal this case all the way to the Supreme Court. BNB, a crypto that serves as a proxy for perceptions of its creator, Binance, fell more than 6% on June 10 to hit its lowest point since last July.

SEC Chair Gary Gensler has long maintained that the majority of other tokens are subject to the agency’s investor-protection regulations and that trading platforms should register with the regulator. US officials perceive Bitcoin as a commodity.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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