Bitcoin Tumbles Below $30K as Binance Sell Order and UK Inflation Data Take Effect
Bitcoin (BTC) has taken a hit, falling below $30,000, just hours after a massive sell order on Binance and the release of UK inflation data. At the time of writing, BTC was hovering near $29,300, marking a 3% drop over the past 24 hours, according to CoinDesk data.
BTC’s recent drop is a significant blow as it had only just regained its footing above the psychologically important threshold of $30,000. The decline caught many traders off guard, especially those who were betting on an increase, as the majority of BTC liquidated positions were long, according to data from futures and trading platform Coinglass.
The second-largest cryptocurrency by market value, Ether (ETH), followed a similar pattern, dropping below $2,000 for the first time in almost a week. The coin was recently changing hands around $1,981, down over 4% from the previous day.
Most major cryptocurrencies were also in the red, including decentralized finance tokens such as Uniswap’s UNI and lending platform Aave’s AAVE, which both sank by 6% and 7%, respectively, to trade at around $5.90 and $74.85. Maker’s MKR also dropped by 5% to hover at around $729.31.
The overall crypto market performance, as measured by the CoinDesk Market Index (CMI), was down 3% for the day. Despite the dip, decentralized exchanges (DEX) volumes had been surging amid growing concerns about their centralized counterparts.
Joshua Frank, co-founder and CEO of digital asset information platform The Tie, wrote in an email to CoinDesk that he expects this trend to continue until there is clarity on the Binance regulatory situation. However, he added that DeFi accounts for less than 5% of the overall crypto market cap.
Regulatory scrutiny against DeFi exchanges is also increasing, with the Securities and Exchange Commission (SEC) reopening a proposal from last year that would target DeFi exchanges for regulation. Frank believes that this, along with concerns around security and who the counterparties are on DeFi platforms, is likely to continue to delay real institutional adoption.
