Why Did The Bitcoin And Ethereum Price Crash?
The Bitcoin and Ethereum price have crashed in the last 24 hours, dropping below $67,000 and $2,500, respectively. This price crash came following news about the alleged investigation into the USDT issuer Tether. Meanwhile, Israel’s attack on Iran was also a contributory factor.
Why The Bitcoin And Ethereum Price Crashed
The Bitcoin and Ethereum price crashed below $67,000 and $2,500 following the Wall Street Journal’s report that the US Department of Justice (DOJ) had launched an investigation into the crypto firm Tether. US federal investigations are allegedly investigating the stablecoin issuer for possible violations of sanctions and anti-money laundering rules.
Additionally, the report also mentioned that the US Treasury is considering sanctioning Tether for doing business with individuals and groups on the US sanctions list. The Bitcoin and Ethereum price fell as this news sparked a major crypto market selloff due to fear and uncertainty among market participants.
Following the report, Tether CEO Paolo Ardoino mentioned in an X post that there was no indication that they were under investigation and that the WSJ was simply “regurgitating old noise.” However, that statement wasn’t enough to plug the bleed, seeing as prices fell further after his post.
Before the report, the Bitcoin price was again looking to reclaim the $68,000 price level as support while the Ethereum price was comfortably above the $2,500 level. However, the implications of the news if true was enough to derail these crypto’s momentum seeing as the flagship crypto immediately slid below $67,000.
Indeed, Tether being investigated could have far-reaching impacts on the crypto market, considering that USDT, which is the largest stablecoin by market cap, is widely used across the market. It is worth mentioning that the stablecoin lost its dollar peg following the report of the DOJ’s investigation.
Israel’s Attack On Iran Also Contributed
Israel’s retaliatory attack on Iran also contributed to the Bitcoin and Ethereum price crash. Israel attacked Iran in retaliation for Iran’s missile attack earlier this month. This attack came in the early hours of October 26, just when the crypto market was trying to rebound from the shock wave of the alleged Tether investigation.
As expected, Israel’s attack on Iran also caused panic in the crypto market, considering that it has again fuelled the growing tensions in the Middle East and raised the possibility of a regional war. Iran has yet to confirm whether it will strike back against Israel, but the Bitcoin and Ethereum look to be responding in anticipation of that happening.
For now, the breakdown in the Bitcoin and Ethereum price isn’t looking good. Popular analyst Justin Bennett stated in an X post that if the breakdown pattern holds through the weekend, then any bounces next week would be for selling.
This Bitcoin and Ethereum price crash comes just less than two weeks before the US presidential elections, with the crypto market eagerly anticipating Donald Trump’s victory. A Trump victory is considered bullish for the crypto market because the former US President has publicly declared his support for cryptocurrencies.
Featured image created with Dall.E, chart from Tradingview.com
