CoinWorld.com Report:
Bitcoin and Ethereum prices plummeted in the past 24 hours, falling below $67,000 and $2,500 respectively. This price drop occurred after news broke regarding an investigation into USDT issuer Tether. Additionally, the Israeli attack on Iran was also a contributing factor.
Why did Bitcoin and Ethereum prices crash?
Bitcoin and Ethereum prices crashed to below $67,000 and $2,500 respectively.
According to a report from The Wall Street Journal, the US Department of Justice (DOJ) has launched an investigation into cryptocurrency company Tether. It is alleged that they are investigating whether this stablecoin issuer may have violated sanctions and anti-money laundering regulations.
Furthermore, the report also mentioned that the US Treasury is considering sanctioning Tether for conducting business with individuals and entities on the US sanctions list. Due to fears and uncertainties among market participants, this news sparked a massive sell-off in the cryptocurrency market, causing Bitcoin and Ethereum prices to drop.
Following the report, Tether’s CEO Paolo Ardoino mentioned in a tweet that there is no indication that they are under investigation and that The Wall Street Journal is just “repeating old noise.” However, given that the prices further declined after his statement, it was not enough to stop the bleeding.
Prior to the report, Bitcoin prices were attempting to reclaim the $68,000 price level as support, while Ethereum prices were comfortably above the $2,500 level. However, if the news is true, its impact is enough to disrupt the momentum of these cryptocurrencies, as the flagship cryptocurrency immediately dropped below $67,000.
In fact, considering that USDT is the largest stablecoin by market capitalization and widely used throughout the market, an investigation into Tether could have far-reaching effects on the cryptocurrency market. It is worth mentioning that following the release of the DOJ investigation report, the stablecoin lost its peg to the US dollar.
The Israeli attack on Iran also played a role in exacerbating the situation. The retaliatory attack by Israel on Iran led to a crash in Bitcoin and Ethereum prices. Israel attacked Iran in retaliation for the Iranian missile strike earlier this month. This attack occurred on the early morning of October 26, when the cryptocurrency market was attempting to recover from the shockwaves of the so-called Tether investigation.
As expected, the Israeli attack on Iran also caused panic in the cryptocurrency market, as it further intensified the escalating tensions in the Middle East and increased the possibility of a regional war. Iran has not confirmed whether it will retaliate against Israel, but Bitcoin and Ethereum seem to be responding to this development.
Currently, the situation with the decline in Bitcoin and Ethereum prices is not optimistic. Prominent analyst Justin Bennett stated in a tweet that if the breakdown pattern continues into the weekend, any bounce next week will be a selling opportunity.
The price crash of Bitcoin and Ethereum occurred less than two weeks before the US presidential election. The cryptocurrency market was eagerly anticipating a victory for Donald Trump. Trump’s victory was seen as favorable for the cryptocurrency market, as the former US president publicly announced his support for cryptocurrencies.
Tether FUD leads to BTC price crash | Source: BTCUSD on Tradingview.com
