Bitcoin Prices Tank As Traders Make a Run on BiTMEX
Bitcoin prices tanked on Friday after the CFTC announced that it was bringing charges against several owners and operators of trading exchange BitMEX. Spooked by the news, traders are now making a run on the exchange and have withdrawn a total of 32,200 bitcoin, worth over $330 million, according to crypto data company Glassnode.
Yesterday, the US Commodity Futures Trading Commission (CFTC) announced that “five entities and three individuals” that own and operate BitMEX would be facing charges for several offences. The CFTC indictment alleges that the company violated the Bank Secrecy Act and that it onboarded US customers onto its platform, among other charges. Under US laws, it is illegal for US citizens and residents to trade on exchanges that are not registered and licensed with the CFTC. Foreign firms who solicit and onboard US clients without having the necessary regulation could face prosecution.
BitMEX is a cryptocurrency derivatives trading platform which is based in the Seychelles, an Indian Ocean island off the coast of Eastern Africa where some brokerage companies have operations as a result of the relatively flexible regulatory structure there.
Glassnode indicates that panicked traders emptied nearly 19% of wallets on BitMEX as they withdrew their BTC holdings. BTCUSD is down currently by 1.24% and trades at 10489.46 as at the time of writing.
Technical Outlook for BTCUSD
The latest price action on the daily chart for Bitcoin prices indicates that the price action is now trading within the confines of a symmetrical triangle, with today’s bar testing the lower border of the triangle. Price action entered the triangle in a downtrend. Thus the bias is for the price action to break below the triangle’s lower edge. If this plays out as expected, BTCUSD may target the next support level at 10465.78, with 10290.44 and 9939.77 lining up as potential downside targets.
Conversely, a bounce on the triangle’s lower border may provide the impetus for the price to push towards the 10930.82 price level. This move invalidates the triangle and allows for a move towards the primary supply zone at 12000. Before this level, Bitcoin prices must clear another supply zone at 11136 – 11435. 12824.54 only becomes available if the supply zone at 12000 is breached.