- Bitcoin dropped $500 after two news bombshells yesterday
- BitMEX is being charged by the CFTC and Donald Trump tested positive for coronavirus
- Bitcoin rejected from a key trendline, meaning that we could be in for a dull October
Bitcoin has dropped $500 to $10,390 after two news stories broke within twelve hours of each other. Having looked set to break a month-long downtrend, yesterday’s news of Commodity Futures Trading Commission (CFTC) charges against cryptocurrency exchange BitMEX saw an initial drop, which was exacerbated by the news that U.S. president Donald Trump had tested positive for coronavirus. This wasn’t specifically bad for Bitcoin, but it reacted the same as other markets and slid further, as we have now come to expect.
Bitcoin Rejects off Month-Long Trendline
Following its negative month, Bitcoin holders were hoping to shake off the September Effect and usher in a brighter start to the new month. This failed to materialize however, after news of an investigation by the CFTC into the futures exchange BitMEX was announced, causing Bitcoin to reject when it was right by a crucial trendline:
The CFTC charged BitMEX with operating an unregistered trading platform and violating Anti-Money Laundering (AML) regulations due to the fact that they allowed American citizens to use their platform to trade Bitcoin futures without having a license. Five entities and three individuals who, according to the CFTC own, and operate the exchange have been hit with charges, including CEO Arthur Hayes.
Among the charges leveled against BitMEX are failing to take “the most basic compliance procedures” and essentially laundering money through the exchange. The charges are a result of a year-long investigation by the CFTC into the exchange, which when it was announced last July saw $73 million leave BitMEX in 24 hours.
BitMEX’s co-founder and CTO Samuel Reed was arrested on Thursday morning while Hayes and the others are yet to be apprehended.
Trump News Negates Rebound
News of the BitMEX charges immediately knocked Bitcoin back, but worse was to come when it was revealed yesterday that Donald and Melania Trump had been diagnosed with coronavirus. This didn’t have a direct impact on the price of Bitcoin but it did negatively affect traditional markets, which had a knock on effect to the cryptocurrency markets and effectively undid the rebound Bitcoin had been making after the BitMEX news.
The rejection means that Bitcoin is still in a downtrend, and even if it does break above the month-long trendline it still has another one that it needs to close above before another market cycle can be confirmed:
Unless some incredibly good news comes the way of Bitcoin in the first half of October we could be looking at another slow month for the cryptocurrency markets.