Bitcoin’s recent upward movement could lead to leverage liquidations and exaggerated price rallies for alternative cryptocurrencies that were recently shorted, such as Solana’s SOL. After briefly dipping below the crucial support level of $25,000 on Monday, Bitcoin has risen by over 6% and is now trading near $26,600. Positive retail sales and factory output data from China released on Friday have boosted risk sentiment in financial markets, paving the way for further price gains in leading cryptocurrencies.
Bitcoin cash (BCH) has seen the highest increase, rising by 8% in the past 24 hours, followed by Maker DAO’s MKR with a 5% rise. Other altcoins like XRP, Ether (ETH), SOL, Tron’s TRX, and dogecoin (DOGE) are also tracking Bitcoin’s upward trend.
This bounce in altcoins comes after traders sold these tokens in anticipation of potential asset sales by FTX, a bankrupt exchange seeking approval from the bankruptcy court. The recovery puts altcoin bears, who had leveraged bets on SOL and other tokens declining, at risk of liquidation.
In other news, Binance.US is facing accusations of non-cooperation in a probe by the Securities and Exchange Commission (SEC). The SEC claims that the crypto exchange’s staking, clearing, and brokerage services violate federal securities law.
The use of Binance’s international arm’s custody service, Ceffu, is also under scrutiny for potentially violating an agreement aimed at preventing assets from being moved overseas. Court filings reveal that Binance.
US’ holding company, BAM, has provided limited and inadequate evidence during the discovery process, with many documents lacking dates or signatures. Additionally, Binance.
US has experienced the departure of two high-level executives, Head of Legal Krishna Juvvadi and Chief Risk Officer Sidney Majalya, following the earlier departure of CEO Brian Shroder.
Meanwhile, Deutsche Bank has partnered with Swiss startup Taurus to establish digital asset custody and tokenization services. The bank had previously applied for a crypto custody license from Germany’s financial watchdog, BaFin, in June. Deutsche Bank’s interest in crypto custody dates back to early 2021 when a digital asset custody prototype was mentioned in a report by the World Economic Forum.
The introduction of rules for crypto asset custody in Germany and Europe’s proposed regulatory framework for Markets in Crypto-Assets (MiCA) are providing traditional financial institutions with the clarity needed to explore the digital assets industry.