The FTX crash had a huge impact on the entire crypto market, and some companies suffered from bankruptcy. Bitcoin price support has dropped by about 13% in the last 10 days amid the resolution of the crisis. Analysts are now focusing on how prices will move from a technical perspective.
Bitcoin suffers from corporate apathy after bankruptcies
Both BTC and ETH have broken all levels where they have found support since January 2022. After the last event, Bitcoin’s price reached its lowest level in the last two years below $16,000. The market is somewhat sluggish at the moment, leaving little room for investors to earn additional profits. At this point, the flow of money from the institutional side also decreases. Large investors find little reason to invest in cryptocurrencies. As Ben McMillan, CIO of IDX Digital Assets, puts it:
Right now, most of the institutional investors we spoke to are happy to sit on the sidelines… they haven’t given up on the market, but they’re not doing anything in crypto right now, especially on this macro backdrop.
McMillan says investors are worried about the knock-on effects of the crisis. He cited the Gemini-linked Genesis stopping withdrawals as an example:
I got a few calls today about Genesis stopping withdrawals. That doesn’t mean the risk that exists in FTX is anywhere near, but investors are currently very timid and biased about ANY counterparty risk in crypto.
Technical analysts say two price levels will be important for Bitcoin
In his latest analysis, Twitter analyst Cred shared his expectations for two levels that will be critical for Bitcoin bulls following the collapse of FTX. The crypto analyst says he is waiting for the next cycle after the loss of $20,000:
The first is this $20,000 price cycle, which has been the lowest of our range for several months. Next up is this pre-bull market breakout shelf approaching $11,000 or $12,000.
According to Cred, Bitcoin, after consolidating at around $20,000 for months, is currently showing an overall bearish trend following the bankruptcy of FTX. However, the popular analyst says that BTC bulls can still regain control of the market.
If BTC retraces the crash level at $19,300, it means that the market is not willing to accept the low prices. The slump is absorbed by willing buyers, and then we can treat this disruption as some kind of aberration…
How possible is $12,000?
According to Cred, this level will depend entirely on whether or not the bulls take control. The analyst says that Bitcoin will likely fall towards the next support around $12,000:
In the other scenario, even if BTC comes back to $19,000, we will consolidate and fall here. The level I think is worth doing is $11,000, close to $12,000…
There is still a bustling space inside Bitcoin: ETFs
As the cryptocurrency market is going through a turbulent period, exchange-traded funds reached record volumes in 2022. The ProShares Bitcoin Strategy ETF (BITO) broke a trading record on November 8, surpassing its previous record by 64%. It has also increased 366% more since any day since its launch on November 8, according to ProShares.
While BITO remains the largest of the crypto funds, BITI offers an inverse strategy for investors betting against Bitcoin. Such ETF structures, coupled with futures, have performed well against the backdrop of crypto volatility.
“This is not surprising,” Deborah Fuhr, founder and managing partner of ETFGI, said on Monday. Because think about the time of Covid and high volatility,” she said. Also, “People thought fixed-income ETFs wouldn’t work, and they did. Therefore, ETF packaging works well,” he added. Fuhr says ETFs work as an ecosystem as highly regulated funds traded on the CME exchange. In most cases, investors only trade the ETF as a product, not the underlying securities.
“FTX crash undermined the reputation of the market”
“Even without FTX, the clearing system for Bitcoin and cryptocurrency as a whole is still immature,” said Simeon Hyman, global investment strategist at ProShares, referring to the stock market’s catastrophic collapse. Hyman said that the lack of differentiation between Bitcoin exchanges underscores the need for maturation. The futures market has matured rapidly, he said. “We need to separate crypto products from Blockchain and smart contracts,” says Fuhr, founder of ETFGI. This is because it’s based on real use cases:
Because we see it used for many things, including tokenizing private equity and allowing individual access.
“With regard to bitcoin and cryptocurrency, the problem is not so much that we have disclosure rules,” Hyman said. “If you were to invest in the Bitcoin exchange itself, what pressure would it put on these exchanges?” he added. Hyman said the mixing of funds is a concern for investors, prompting them to turn to “cold wallets.” Experts say that the effects of FTX’s bankruptcy as a whole will be on the market for a while. As you follow on Kriptokoin.com, Binance CEO CZ made statements in this direction.
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