El Salvador was the reason for the dump?
Tuesday Bitcoin and most cryptocurrencies sharply lost value, when Bitcoin as the biggest digital currency legally became the tender in El Salvador, but it failed to create any excitement.
Wednesday, Nayib Bukele, President of El Salvador after being forced to suspend registration for its wallet application called "Chivo" on the day before because of technical issues, asked users to report the problems on his Twitter. These issues cased caused user distrust in the government for this process.
After supper volatility day of Tuesday, Wednesday was a quiet day. On Wednesday, when the asset started to recover its loss, according to Reuters, the threat of a U.S. lawsuit against crypto exchange Coinbase (NASDAQ: COIN) Global Inc, pulled the cows' brakes.
"The Securities and Exchange Commission issued Coinbase with a Wells notice, indicating the U.S. regulator will sue if the crypto exchange goes ahead with the launch of its interest-bearing "Lend" product for crypto assets." (Reuters).
SEC Chair Gary Gensler in past weeks and several times called the crypto universe a "Wild West" which is riddled with fraud.
Tuesday, Bitcoin declined sharply from its nearly four-month high of $52,956, its heaviest loss in more than a month, and closed down by more than 11%, which is the biggest drop since June 2. This dump caused a more than $180 billion loss in market value. As bitcoin crashed, Salvadoran President Nayib Bukele said that they bought another 150 Coins on Tuesday, worth around $7 million.
As Tuesday market turmoil delayed transactions at US cryptocurrency exchanges like Kraken, Gemini, and Coinbase, once more users' trust was disturbed. And this distrust can slow down the recovery.
From the technical side, it is trading under the key level of 46,675. Market value is slowly decreasing, the market price is flat, and RSI is at 42, signaling that under this level, still we can bet on bears than bulls.
