Bitcoin has been a mess this week. Like the rest of the crypto markets, the coin crashed to register new 2022 lows mid-this week thanks to FTX’s implosion, Binance’s failure to come through with the rescue, and investors scampering for the exits.
Presently, there is relief following the expansion of prices on November 10. Still, the coin is trading below June 2022 lows at the time of writing.
Technically, Bitcoin sellers are dominant, and the path of least resistance is southwards. This forecast is valid unless there are sharp expansions back to September and October 2022 trade range with decent trading volumes. In that case, Bitcoin bulls may have a chance of bouncing after the collapse.
The FTX Collapse and Consequences on Bitcoin
The FTX implosion is hogging headlines. Sam Bankman-Fried is no longer a billionaire and could go bankrupt because he owes lenders millions of dollars.
However, revelations that FTX and Alameda Research, the trading wing founded by Sam and with some loose ties with FTX, may have used client funds for their operations is damning.
FTX and the trading arm, it has been shown, heavily leveraged on FTT. When Binance said they were liquidating their FTT holdings and failed to secure the deal to rescue FTX, users quickly moved their cash for safety, preferring the liquid USD to crypto assets, including BTC.
While crypto has found relief and the market is stable, bulls are weak because of fundamental factors and the apprehension gripping the market.
Bitcoin Price Analysis
In three days between November 7 and 9, Bitcoin crashed through levels of support. First, BTC fell below the bull flag, reversing gains early this month. Second, the fear associated with the FTX collapse saw BTC crashing below $17.5k and June 2022 lows.
Although prices bounced back on November 10, mainly because of short covering. The primary resistance is at June 2022 lows at around $17.5k.
As long as prices are below this liquidation line, failing to build on gains of November 10, sellers are in control. Every high within the November 8 and 9 bear trade range offers an opportunity for sellers to unload, targeting $15.5k marking this week’s lows.
This bearish preview will only change if prices rally above $20k, reversing this week’s losses.
Technical charts courtesy of Trading View.
Disclaimer: Opinions expressed are not investment advice. Do your research.
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