Bitcoin facing headwinds: CFTC sues crypto exchange Binance

Binance—the world’s largest crypto exchange—is being sued by the Commodity Futures Trading Commission (CFTC). According to CoinMarketCap, trading volume over the last 24 hours for Binance was an eye-watering US$9,765,683,388 (compare this with Coinbase Exchange, the second largest crypto exchange, boasting a trading volume of US$1,090,158,774 over the same period).

As the CFTC complaint alleges, Zhao with the assistance of Chief Compliance Officer Lim, orchestrated a strategy directing the Binance enterprise to engage in numerous violations of the Commodity Exchange Act (CEA) and the CFTC regulations, ultimately operating the enterprise through a complex web of firms with the goal of using this operational infrastructure to shield Binance from complying with existing regulations in any of the jurisdictions where the firm operates.

Recent developments witnessed Bitcoin explore lower levels versus its US counterpart at the beginning of the week. BTC/USD shed 3.0% on Monday, with the major crypto product dipping a toe in waters under the $27,000 level for the first time since mid-March.

Where Does This Leave BTC/USD?

Technically speaking, the price of BTC/USD exhibits an upside bias, evident in both the weekly and daily timeframes. This is obvious through price structure—clear higher highs and lows—and the Golden Cross present on the daily scale, displayed by way of the 50-day simple moving average crossing above the 200-day simple moving average.

However, while technical elements underpin a bullish showing, the other side of the fence exhibits several technical headwinds. First and foremost, of course, weekly and daily resistances recently put in an appearance at $28,844 and $28,651, respectively, with the daily level boasting additional confluence in the shape of a 100% projection at $28,654, which many Harmonic traders will recognise as an AB=CD bearish formation. Further supporting a bearish narrative, the Relative Strength Index (RSI) on the daily scale recently pencilled in negative divergence out of overbought space.

Looking at things from more of a shorter-term perspective, the unit recently spiked under $27,000 to cross swords with H1 support at $26,549 and a 100% projection. As you can see, buyers recently stepped in from here in dominant fashion, leading to choppy price action unfolding around $27k on Tuesday. Should further selling materialise, H1 support warrants attention at around the $26,000 threshold, while pushing for higher levels could see nearby resistance make a show at $27,347.

BTC/USD Direction?

Although we have an uptrend brewing on weekly and daily timeframes, the current weekly and daily resistances are potentially problematic, aided by the daily timeframe’s negative divergence from the RSI.

Therefore, from a technical standpoint, attention will be on H1 levels: support at $26,549 and resistance at $27,347. Trading between the aforementioned levels may be challenging. However, given the conflicting signals witnessed on the bigger picture, pushing beyond one of these levels may provide a foundation for a breakout scenario. For example, a breakout below $26,549 support, in line with higher timeframe resistances, could see price aim for $26,000. On the other hand, a breakout above $27,347, in step with the higher timeframe’s trend, might see price approaching $28,000.

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