Bitcoin price flat as eyes turn to Binance after CFTC suit; ether's trending higher

Quick Take

  • Bitcoin traded largely flat this morning, falling 0.7% after declining sharply yesterday upon news that the CFTC will pursue legal action against Binance.
  • “CFTC vs. Binance is now an important driver of price action,” Cumberland wrote on Twitter, adding that given an unclear path for Binance, near term price action and volatility remain uncertain.

Crypto prices traded flat on Tuesday after yesterday's drop after news that the CFTC will pursue legal action against exchange giant Binance.

Bitcoin was trading around $26,943 by 11 a.m. EDT, down 0.7% in the past 24 hours, according to TradingView data. The cryptocurrency had been on a two-week tear amid a banking crisis in the U.S., but it fell sharply after the CFTC’s lawsuit against Binance became public.

"CFTC vs. Binance is now an important driver of price action," crypto trading firm Cumberland wrote on Twitter.

There are three potential outcomes for the CFTC's actions against Binance, the post suggested: "(1) Clearer guardrails, but no material penalty (i.e. they win the case scenario); (2) Clearer guardrails, but a manageable penalty; (3) Clearer guardrails, but significant penalties."

While the first scenario would be bullish for crypto, Cumberland noted, the other two could be quite bearish. "But since the path for any of these in the near term is still unclear, near term price action and volatility are similarly uncertain," it said.

Either way, it said, the lawsuit will "certainly exacerbate tightness" and will likely "damage liquidity."

Ether traded higher, up 2.7% over the past 24 hours to around $1,743. 

Crypto companies

Crypto-related companies followed a similar market trend to bitcoin, trading mostly flat. 

Coinbase was down 0.03% by 11 am in New York, while MicroStrategy — which announced that it bought $150 million in bitcoin in the past few weeks — fell 2%.

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