Tricky environment for traders: regulatory authorities and macroeconomic location make cryptom market more difficult

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Die Vorstöße weltweiter Regulierungsbehörden, insbesondere der Vereinigten Staaten, stellen den Kryptomarkt vor zunehmende Schwierigkeiten. In Kombination mit der aktuellen makroökonomischen Lage ergibt sich ein äußerst tückisches Umfeld für Trader. In dieser instabilen Situation liegt der Schlüssel zur Lösung in einem entsprechenden Risikomanagement. Trader sollten verschiedene Maßnahmen ergreifen, um die Gefahren einer geringen Liquidität zu mindern. Ein Hauptvorwurf der SEC (Securities and Exchange Commission) gegenüber Krypto-Börsen betrifft den Handel mit nicht registrierten Wertpapieren. Dazu zählen unter anderem Solana (SOL), Cardano (ADA) und Filecoin (FIL). Die Klagen richteten sich zunächst nur gegen Bittrex, wurden aber mittlerweile auch gegen Binance und Coinbase ausgeweitet. …
The advances of global regulatory authorities, in particular the United States, present the cryptom market with increasing difficulties. In combination with the current macroeconomic location, there is an extremely treacherous environment for traders. In this unstable situation, the key to the solution is in corresponding risk management. Traders should take various measures to reduce the dangers of low liquidity. A main allegation of the SEC (Securities and Exchange Commission) compared to crypto exchanges concerns trade in non-registered securities. These include Solana (Sol), Cardano (ADA) and Filecoin (Fil). The lawsuits initially only directed Bittrex, but were now also extended against Binance and Coinbase. ... (Symbolbild/KNAT)

The advances of global regulatory authorities, in particular the United States, present the cryptom market with increasing difficulties. In combination with the current macroeconomic location, there is an extremely treacherous environment for traders.

In this unstable situation, the key to the solution is in corresponding risk management. Traders should take various measures to reduce the dangers of low liquidity.

A main allegation of the SEC (Securities and Exchange Commission) compared to crypto exchanges concerns trade in non-registered securities. These include Solana (Sol), Cardano (ADA) and Filecoin (Fil). The lawsuits initially only directed Bittrex, but were now also extended against Binance and Coinbase. The SEC criticizes the significant growth of the retail volume of old coins compared to the traditional favorites Bitcoin and Ethereum.

As a consequence of the SEC lawsuits, American stock exchanges have taken out the old coins that were classified as non-registered securities. This led to a drastic decline in liquidity on all crypto trading platforms. In particular, the market depth of the ten most important cryptocurrencies on Bittrex, Binance.Us and OKCOIN has dropped sharply. At binance.Us and OKCOIN, the decline has even been incredible 85%since the beginning of the year.

However, a symptom for other problems can also be a symptom of falling liquidity. Okcoin, for example, had to temporarily suspend the USD deposits due to the current banking crisis and then had difficulties to restore liquidity.

The global Bitcoin liquidity has also dropped worrying. The big market maker Jane Street and Jump have stopped their liquidity operations in the United States, which further tightened the situation. The reserves of BTC, ETH and stable coins on the stock exchanges have dropped by 20%, 40% and 52% within one year.

This declining liquidity represents significant risks for dealers. Low liquidity favors market manipulation and increases the risk of pump-and-dump strategies. In addition, it leads to slippage, in which the planned and actual price may differ greatly from each other and considerable losses. The closure of positions can also lead to difficulties at low liquidity.

In order to master these challenges, retailers can take various measures. The trade in stock exchanges with a high trading volume and tight spreads offers more stability. The monitoring of the market depth and the order books helps to evaluate the liquidity and the use of limit orders instead of market orders minimizes the slippage. In addition, a diversification of the trading activities via several crypto bonds can prevent the liquidity bottlenecks of a platform to be doomed.

Despite the current challenges, crypto trading is not insurmountable. Dealers should remain informed, use reliable platforms and use intelligent trade strategies to successfully act.