The Bitcoin and Ethereum prices have experienced a significant crash in the last 24 hours, dropping below $67,000 and $2,500, respectively. This abrupt decline in prices can be attributed to news surrounding an alleged investigation into Tether, the issuer of USDT, as well as Israel’s attack on Iran.
The Wall Street Journal reported that the US Department of Justice (DOJ) had initiated an investigation into Tether for potential violations of sanctions and anti-money laundering regulations. Additionally, there were rumors that the US Treasury was considering sanctioning Tether for engaging with individuals and groups on the US sanctions list. These developments instilled fear and uncertainty in the market, leading to a widespread selloff of cryptocurrencies.
Tether’s CEO, Paolo Ardoino, denied the allegations in a post on X, stating that there was no indication of an investigation and dismissing the news as old noise. However, this reassurance failed to stop the downward spiral of prices, with Bitcoin slipping below $67,000 and Ethereum dropping below $2,500.
Prior to these events, Bitcoin was on track to reclaim the $68,000 price level, while Ethereum was comfortably above $2,500. The potential implications of a Tether investigation disrupted the momentum of these cryptocurrencies, causing a sharp decline in their prices.
The investigation into Tether has raised concerns about the stability of the crypto market, as USDT is the largest stablecoin by market cap and is widely used across various platforms. The stablecoin even lost its dollar peg following reports of the DOJ’s probe.
In addition to the Tether-related turmoil, Israel’s retaliatory attack on Iran further exacerbated the situation. Israel’s response to Iran’s earlier missile attack heightened tensions in the Middle East and raised fears of a potential regional conflict. The uncertainty surrounding Iran’s next move has added to the market’s anxiety, contributing to the downward trend in Bitcoin and Ethereum prices.
Renowned analyst Justin Bennett warned that if the current breakdown pattern persists, any price rebounds next week would likely result in selling pressure. This price crash comes just ahead of the US presidential elections, with the crypto market eagerly anticipating the outcome. A victory for Donald Trump is seen as favorable for cryptocurrencies, as the former president has expressed support for the digital asset industry.
As the crypto market navigates through these challenging times, investors and traders are closely monitoring developments and preparing for potential market shifts. The recent events surrounding Tether and geopolitical tensions highlight the volatility and unpredictability of the cryptocurrency market, underscoring the importance of staying informed and adaptable in this ever-evolving landscape.
