After the US Justice Department, the Treasury, and the CFTC made a joint announcement on the enforcement action on Binance and its now ex-CEO Changpeng Zhao, crypto has made an emphatic response.
A massive enforcement action
It was only last night that distinguished speakers that included Janet Yellen, Head of the US Treasury, and Rostin Benham, Head of the Commodity Futures Trading Commission, spoke on what was the biggest enforcement action on a crypto company to date.
Binance, the largest crypto exchange in the world by trading volume, was slapped with a fine of more than $4 billion, while its CEO Changpeng Zhao was forced to step down from his role, and will face criminal proceedings.
Crypto makes a decent bounce
On this sort of news one expects the crypto market to take a spectacular dump, and Bitcoin did take a 4.5% mini plunge. Some of the other top cryptocurrencies also fell, but it was by no means one of those devastating falls that do happen from time to time in crypto.
The announcement came Tuesday evening, and by early Wednesday morning the bounce was already beginning. Bitcoin had gone as low as $35,600, but is currently at over $36,700 at time of going to press.
Ethereum has already surpassed its price before the announcement was made, and appears to be breaking out, having once more scrambled above the important $2,000 price level.
Danger ahead
Source: Trading View
The one black spot on the horizon that just might threaten this recovery is the Total3 market cap of all cryptocurrencies (excluding bitcoin and ethereum). As can be seen in the chart, the price has returned to confirm the head and shoulders pattern.
If the pattern plays out, the altcoins could retrace back to a total market cap of $368 billion, which equates to an 8% downside move from the current price. However, if the neckline is broken to the upside, this would be extremely bullish. Traders should exercise caution.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
