Binance founder and former CEO – Changpeng Zhao a.k.a CZ – received a four-month prison sentence after pleading guilty to violating US anti-money laundering laws at the world’s largest cryptocurrency exchange.

In the first tweet following the sentencing, CZ revealed his intention to remain a passive investor and holder in the crypto industry while simultaneously highlighting the importance of compliance in the industry.

CZ Reacts

In his final tweet before beginning his four-month prison sentence, CZ expressed gratitude to his supporters, acknowledging the letters, messages, and various forms of encouragement he received.

He even went on to emphasize the importance of their support in keeping him resilient during this period.

“I will do my time, conclude this phase, and focus on the next chapter of my life (education). I will remain a passive investor (and holder) in crypto. Our industry has entered a new phase. Compliance is super important. A silver lining of this whole process is that Binance has been under the microscope. And funds are SAFU. Protect users!”

CZ resigned as Binance’s chief executive officer last November after admitting that he and the exchange he founded in 2017 had failed to comply with anti-money laundering regulations outlined in the Bank Secrecy Act.

The Sentencing

Once regarded as one of the most influential figures in the industry, CZ became the second prominent crypto leader after FTX’s Sam Bankman-Fried (SBF) to face imprisonment.

The sentence was significantly lower than the three years sought by prosecutors and marked the first instance of a CEO being imprisoned for violating the Bank Secrecy Act, a charge frequently used in recent crypto prosecutions.

Prior to his sentencing, CZ expressed his remorse to US District Judge Richard Jones, acknowledging his failure to implement an effective anti-money laundering program. He stated,

“I believe the first step of taking responsibility is to fully recognize the mistakes. Here I failed to implement an adequate anti-money laundering program. I realize now the seriousness of that mistake.”

CZ chose to surrender voluntarily to serve his sentence, which will likely be at a detention center near Seattle-Tacoma International Airport. Additionally, Binance agreed to a $4.32 billion penalty, while CZ paid a $50 million criminal fine and an additional $50 million to the US Commodity Futures Trading Commission (CFTC).

The Federal Reserve decided to maintain its benchmark interest rate of 5.25%% to 5.5% at the highly anticipated Federal Open Market Committee Meeting (FOMC) on Wednesday, following a fearsome 6% drawdown in Bitcoin’s price earlier that day.

Within five minutes of the announcement, Bitcoin’s price rose from $57,300 to $57,700

• Per a press release, the central bank said it also plans to slow down the rate at which it sells US Treasury securities starting in June, reducing its monthly redemption cap from $60 billion to $25 billion.
• Market participants overwhelmingly expected the Fed to maintain its interest rate at 5.25% heading into the meeting, expecting cuts to potentially take off in Q4.
• However, words from the central bank confirmed market fears that the central bank may have to keep rates higher for longer to quell nationwide price inflation, which remains stubbornly above 3%.
• “The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent,” the Fed wrote.
• The economy also remains surprisingly resilient: data compiled by Bloomberg Intelligence suggests that 81% of S&P 500 companies that have filed their Q1 earnings have beaten their first-quarter expectations.
• Bitcoin’s price is known to be influenced by central bank policy and macroeconomic liquidity conditions.
  Some analysts like BitMEX co-founder Arthur Hayes believe BTC will continue to surge past $100,000 as central bank balance sheets continue to expand.

Polkadot’s price has been dropping rapidly over the last couple of months and is yet to show any sign of slowing down. However, the cryptocurrency might soon begin a bullish rebound.

Technical Analysis

By TradingRage

The Daily Chart

On the daily chart, the price has been on an aggressive decline since a rejection from the $12 resistance level. The market has also broken below the bullish trendline that has been formed since October 2023.

The 200-day moving average, located around the $7 mark has also been broken down, with the price seemingly targeting the $4 support zone.

With the Relative Strength Index also showing values below 50%, the momentum is in favor of a further bearish continuation.

The 4-Hour Chart

The 4-hour chart paints a much more clear picture of the recent price action. The market is seemingly forming an ascending channel pattern at the moment.

These formations are normally considered bearish continuation patterns inside a larger downtrend.

Therefore, if the channel breaks down, the market would be more likely to crash toward the $4 support zone. On the other hand, a breakout above the channel can completely overturn the scenario, and the market could begin a bullish trend.

Therefore, the short-term fate of the market relies heavily on whether the channel is broken to the upside or downside.

Sentiment Analysis

By TradingRage

Polkadot Liquidation Heatmap

While the technical analysis of the DOT price chart suggests that we are in a clear bearish trend, the futures market data hints at a potential rebound in the short term.

This chart demonstrates the Binance DOT/USDT pair’s liquidation heatmap. It is evident that tons of liquidity were located below the $6.5 level, which the price has recently dropped below. Therefore, it could be interpreted that the demand has absorbed this supply as the market is not dropping lower anymore.

Currently, a potential liquidity pool for the price to target is located above the $7 level. As a result, the price could at least experience a short-term pullback toward this level.