Bitcoin Targets $30,000

Tuesday became a "black" day for the cryptocurrency market. After a long period of growth when some analysts predicted $100,000 and higher levels for Bitcoin, the "bullish" rally was suddenly interrupted by a 20% collapse. As a result, BTC plummeted quickly from $53,000 to $43,000. Despite the fact that an aggressive selloff stopped even before the price broke the $40,000 support, market participants revised their short-term prospects for BTC, expecting the world's most popular cryptocurrency to return below the $40,000 mark.

Reports that Coinbase (NASDAQ:COIN), the largest U.S. cryptocurrency exchange, could seriously damage its relations with the U.S. Securities and Exchange Commission (SEC) became the catalyst for the BTC decline. The U.S. markets regulator threatened to take legal action against the launch of the Coinbase lending product 'Lend''. The regulator regarded the loans provided as part of this service as unregistered securities and requested additional documentation and testimony from the cryptocurrency platform employees. Both Coinbase CEO and the chief legal officer stated that the exchange has complied with all the requirements of the regulator. However, the SEC is still determined to sue the cryptocurrency exchange if it goes ahead with its plans to launch this product.

The conflict between the regulator and the exchange became the second high-profile case in the crypto industry after the ongoing legal battle between the SEC and Ripple CEO Brad Garlinghouse. Let's recall that the bombshell lawsuit between the Securities and Exchange Commission and Ripple has lasted for over a year. SEC lawyers previously requested access to the correspondence of Ripple employees in the Slack messenger, trying to find evidence that the company had been selling XRP as a security. In response, Ripple's lawyers demanded access to information about SEC employees' transactions with cryptocurrencies, including XRP, insisting that regulator officials freely traded the token, despite its "longstanding rule prohibiting them from engaging in securities transactions without prior authorization", which proves that the XRP wasn't considered a security back then.

Regulators keep targeting major exchanges, and Binance is not an exception. Last week, the Monetary Authority of Singapore (MAS) warned investors that Binance is not licensed or regulated. It's worth noting, however, that the local Binance Singapore unit is currently trying to negotiate with MAS to obtain an official license. The head of Binance, Changpeng Zhao, also said that its U.S. arm is eyeing an initial public offering in the next three years, as the Coinbase exchange did earlier, which will seriously strengthen the position of the trading platform. Until this happens, the BTC sellers will keep the upper hand. In other words, Tuesday's selloff was further evidence that growth, investors have been observing recently, is rather volatile. That being said, we recommend shorting BTC/USD targeting the $30,000 mark.