Crypto sentiment index drops to March fear levels due to Binance lawsuit.
The Crypto Fear and Greed Index, which measures the sentiment of the Bitcoin and cryptocurrency markets as a whole, has dropped to a level of “fear” not seen since March 11th when Circle’s USD coin briefly lost its dollar peg.
The decline in market sentiment on June 5th followed the US Securities and Exchange Commission filing a lawsuit against Binance, its US operations arm, and its CEO Changpeng Zhao. The SEC filed a total of 13 charges against the exchange and its affiliates for failing to register as a securities exchange and for operating illegally in the US.
The index aggregates a variety of indicators to determine market sentiment, including price volatility, momentum, trading volume, and data from social media and Google trends to form an overall picture of investor sentiment towards Bitcoin and the wider cryptocurrency market.
- Binance accused of commingling user funds and other malpractices, SEC designates MATIC, SOL, and others as securities.
- Cboe approved to trade Bitcoin and Ether futures by CFTC.
- Binance to vigorously defend against SEC lawsuit.
The negative sentiment is largely due to the immediate drop in the value of cryptocurrencies following the SEC’s latest move against Binance. According to data from the Cointelegraph Price Index, blue-chip crypto assets such as Bitcoin and Ether (ETH) are down 4.1% and 3.1%, respectively, in the last 24 hours.
Related: SEC complaint hints at why Brian Brooks resigned as Binance.US CEO
Traders with open positions on crypto derivatives markets also suffered consequences, with more than $280 million worth of liquidations occurring since the announcement of the lawsuit.
Unsurprisingly, traders with open “long” positions, which are leveraged bets on the price of crypto assets increasing, were the hardest hit, accounting for $261.75 million (92%) of the overall liquidations. Meanwhile, short traders experienced $20.7 million in liquidations. The top two digital assets were responsible for around 43% of these losses.
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