The crypto market got even more chaotic when the CEO and chief technology officer of Samourai Wallet got in trouble with the U.S. Department of Justice (DOJ).
Bitcoin, Ether, and other big cryptocurrencies took a quick dive when news broke about the arrest of the Samourai Wallet founders. This happened while tensions were already high in the Middle East, and the market was still adjusting after the halving event.
Crypto Market Reacts to Samourai Wallet Executives’ Legal Issues
The cryptocurrency community was shaken as Samourai Wallet’s CEO Keonne Rodriguez and chief technology officer William Hill faced charges of conspiracy to commit money laundering and operate an unlicensed money transmitting business.
Immediate Impact on Bitcoin and Ethereum
Bitcoin’s price took a hit, dropping 3.6% within an hour of the DOJ’s announcement. It slipped below crucial support levels, reaching $63,710, before slightly recovering to $64,546. Similarly, Ethereum saw a 2.51% decrease within the same timeframe, falling further to $3,158 without a significant rebound.
Bitcoin’s price dropped by 3.6% following the DOJ announcement. Source: CoinMarketCap
Effect on Major Altcoins
The turbulence extended to major altcoins as well. PEPE experienced a brief 6.4% drop, Shiba saw a 2.7% decline, and Dogecoin briefly dipped 3.2% following the news of the Samourai Wallet executives’ legal troubles.
The sharp declines in Bitcoin and Ethereum triggered a widespread liquidation of long positions. Over the past 12 hours, Bitcoin witnessed $33.08 million worth of long positions liquidated, while Ethereum saw $29.88 million. Additionally, approximately $23 million in long positions were liquidated across the broader crypto market, according to CoinGlass data.
Market price drops across the board forced heavy long position liquidations. Source: CoinGlass
Geopolitical Tensions and Crypto Market Response
The recent decline in the crypto market coincides with escalating geopolitical tensions, particularly in the Middle East. Reports on April 24 revealed that the Israeli military targeted approximately 40 locations linked to Hezbollah in Southern Lebanon, adding to the atmosphere of uncertainty.
Anticipation of Volatility Post-Bitcoin Halving: The crypto community was already bracing for short-term volatility following the Bitcoin halving event, which occurred just days earlier on April 20. Pseudonymous crypto trader Rekt Capital shared his prediction on April 24 with his 456,400 followers, forecasting that the next bull market peak might not occur until late 2025, approximately 546 days after the halving.
Mixed Sentiment Amidst Fluctuations: Despite overall positive investor sentiment in the crypto market, as indicated by the Fear and Greed Index, which rose to 72 this week, a 15-point increase from last week, recent events have sparked criticism within the crypto community. Many fear that the recent arrests, including those of Samourai Wallet executives, signal a harsh crackdown by the U.S. government on the crypto industry.
Community Response to Arrests: Crypto analyst Ryan Adams expressed concern on April 24, stating, “These developers face up to 25 yrs in prison for writing code. The US is sending a message. No transaction will be private.” Similarly, Fred Krueger remarked on the same day that the arrests were “not a good look for Bitcoin in general.” Additionally, crypto commentator Luke Mikic emphasized the significance of the event, telling his 26,800 followers that the “attack by the US Government on Samourai wallet is bigger than most people think.”
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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