Bitcoin Price is Locked in Consolidation: Make or Break Moment at $37,500

Bitcoin price has been in consolidation mode over the past few days, hinting at signs of exhaustion after its recent rally. At the time of writing, the flagship cryptocurrency was trading 2.28% higher at $36,555.80. Bitcoin’s total market cap has dipped by nearly 2% over the last day to $714.56 billion, while the total volume of the asset traded increased by 48%, which could suggest an increase in selling pressure.

Regulatory Pressure

The cryptocurrency market has been in the red since Tuesday, with major assets such as Bitcoin, Ethereum, Binance Coin, and XRP, recording significant losses. The decline in crypto prices started earlier on Tuesday after Binance founder and CEO Changpeng Zhao pleaded guilty to charges brought against him by the US Department of Justice (DOJ). According to the DOJ, Zhao and others were charged with violating the Bank Secrecy Act and for knowingly violating US sanction laws.

The crypto exchange company is required by the Department of Justice to pay $4.3 billion in penalties and forfeitures. The legal action against Binance was a joint effort by the Commodity Futures Trading Commission (CFTC), the Department of Justice, and the Treasury Department. Notably, the US Securities and Exchange Commission (SEC) was absent.

Even as the Bitcoin price remains bearish, there is a glimmer of hope, as analysts suggest that the legal action against Binance may have cleared the path for the approval of spot bitcoin ETFs. According to some analysts, Binance’s market dominance has been a major hindrance to the approval of the BTC EFTs.

Investors have also been weighing news from another major cryptocurrency exchange platform, Kraken. The SEC allegedly accused of operating as an unregistered broker and that it blended customers’ crypto assets with its own. Earlier in February this year, the Wall Street regulator filed an enforcement action against Kraken, alleging that it sold unregistered securities.

History suggests that regulatory crackdown in the crypto sector leads to a decline in risk appetite among investors, hence lowering the demand for the assets. As such, traders need to trade with caution.

Bitcoin Price Analysis

The daily chart shows that the Bitcoin price has been trading sideways for the past few days after facing rejection at the important resistance level of $37,500. The digital currency has been consolidating between the tight range of $36,500 and $37,500. Its Relative Strength Index (RSI) has dropped below the signal line, indicating an increase in selling pressure, while the Moving Average Convergence Divergence (MACD) indicator remains bearish.

Therefore, the Bitcoin price is likely to continue trading sideways, while holding above the crucial $36,500 level in the ensuing sessions. Bulls need to gather enough momentum to push the price above the $37,500 level for a potential rally toward the next resistance level at $40,900. On the flip side, a drop below the immediate support level at $34,850 may pave the way for further losses.

BTC Price Chart