Cardano price has faced a great setback in the past few days as the US SEC filed a lawsuit against the cryptocurrency exchange platform, Binance. The altcoin has dipped by more than 8% in the past week and currently trades 2.35% lower at $0.3448. ADA’s total market cap has crashed by more than 2% to $12 billion, while its total volume dropped by 2.48% over the last day.

Catalyst Behind ADA’s Downfall

Cardano price has been in freefall since the start of the week, moving in tandem with the broader cryptocurrency market as the US Securities and Exchange Commission (SEC) target Binance and its CEO, Changpeng Zhao. SEC filed a lawsuit against Binance, the largest cryptocurrency exchange platform, over the alleged mishandling of customers’ funds and the running of illegal operations in the United States.

The regulatory action contributed to a market-wide price decline in the crypto sector, impacting several assets, including Bitcoin and Ethereum, which fell by more than 5% after the announcement on Monday. Cardano price plunged nearly 7% following the regulatory announcement.

In the lawsuit, the Securities and Exchange Commission alleged that Binance had been offering “unregistered securities” since its inception. The SEC mentioned that a slew of popular cryptocurrencies, including Cardano, Solana, and Polygon, were among the unregistered securities. Other cryptocurrency asset securities mentioned in the lawsuit include FIL, ATOM, SAND, COTI, and ALGO, among others.

In its filing, SEC provided an overview of Cardano’s background, expressing concerns about its level of decentralization. In support of its argument, the SEC spelled out that the Cardano Foundation deals with legal custody and brand ownership of IOHK, an engineering firm led by Charles Hoskinson, and Emurgo which owned a substantial section of ADA’s overall supply.

Members of the Cardano community took to Twitter to voice their support and counter the allegations made by the SEC. One of the members criticized the SEC’s argument, stating that the complaint overlooked crucial facts. As such, as the legal battle between the SEC and Binance unfolds, the Cardano community remains intent on protecting the asset’s reputation.

Cardano Price Technical Analysis

Cardano price has been under intense pressure as investors closely watch the legal battle between Binance and the SEC to gauge the outlook of the ADA price and the global crypto market cap. On the daily chart, the digital asset has managed to move below the 50-day and 200-day exponential moving averages, as well as the 50-day and 100-day simple moving averages.

Its Relative Strength Index, as well as the Moving Average Convergence Divergence (MACD) indicator, has slipped below the signal line, suggesting a continued downtrend. Its momentum has also slipped further.

Therefore, the Cardano price is likely to pull back further in the immediate term amid SEC’s allegations. As such, the next support levels to watch will be $0.3290 and $0.3000. However, a move past the 50-day EMA at $0.3732 will invalidate the bearish view.

ADA Price Chart