Experts told what dynamics to expect from the digital currency market in the short term
On the morning of November 13, the bitcoin rate is $16.7 thousand, over the past week it has decreased by 21.4%. Experts analyzed the situation on the crypto market and told what dynamics to expect in the coming week
“Any negative news will crash the market”
Financial Analyst BitRiver
The second week of November crossed out all the achievements of buyers since mid-September. The collapse of the crypto market occurred due to the fiasco of negotiations between the head of Binance, Changpeng Zhao, and the head of FTX, Sam Bankman-Freed.
In the spirit of transparency, might as well share the actual note, sent to all Binance team globally a few hours ago.https://t.co/IUNkPcLC8T pic.twitter.com/XGlIJB7EV5
— CZ 🔶 Binance (@cz_binance) November 9, 2022
On Monday, Changpeng Zhao caused a liquidity crisis on the FTX exchange with his announcement of the FTT token sale. As it turned out, the majority of FTX-related company Alameda’s assets ($14.6 billion) were FTT tokens.
Since Tuesday, investors began to actively get rid of the FTT token and sell off crypto assets. The collapse of the market lasted two days. Changpeng tried to save a competitor through a takeover, but, having familiarized himself with the financial condition of the company and the misuse of customer funds, he refused the deal.
This afternoon, FTX asked for our help. There is a significant liquidity crunch. To protect users, we signed a non-binding LOI, intending to fully acquire https://t.co/BGtFlCmLXB and help cover the liquidity crunch. We will be conducting a full DD in the coming days.
— CZ 🔶 Binance (@cz_binance) November 8, 2022
The collapse of FTT led to the collapse of the FTX exchange. The token has fallen in price by 92%, to $1.82. The bitcoin rate fell to $15.58 thousand. The Cypriot regulator suspended the FTX Europe license. The Bahamas Securities Commission has frozen the funds of FTX Digital Markets, which was the operator of the FTX crypto exchange. The US Securities and Exchange Commission (SEC) has launched an investigation into Sam Bankman-Fried. He himself filed for personal bankruptcy. The FTX exchange also announced on its Twitter page (the network is blocked in Russia) that it had filed for bankruptcy.
The head of Binance destroyed the strongest competitor in a couple of days. It is believed that Zhao deliberately made public statements about the sale of FTT. The fire was partially contained by US statistics on Thursday. The slowdown in inflation in the US collapsed the dollar and increased the demand for risky assets. Traders sold the US currency on expectations of a slowdown in the cycle of aggressive interest rate hikes by the US Federal Reserve. The BTC/USDt pair jumped 16% to $18.2K.
Press Release pic.twitter.com/rgxq3QSBqm
— FTX (@FTX_Official) November 11, 2022
Although the dollar index continued to fall on Friday, the cryptocurrency stopped growing. Sam Benkman-Fried has undermined the credibility of the crypto industry. Investors fear the collapse of other crypto companies that have liquidity problems due to FTX. We just don’t know about it yet. Alameda can “drain” its portfolio in the market to take advantage of the rebound.
The inflation report temporarily diverted investors’ attention from FTX problems, although the market situation remains tense. After the collapse and rebound, the BTC/USDt pair is trading at $16.8K in the range of $15.6K-$18.2K. The shock has passed, but the activity of buyers is very low. Without new negative news, the continuation of the correction above $18.5 thousand is preserved. In such conditions, this will be a feat for buyers. The risks of Bitcoin falling to $12,000, according to my estimates, are more than 70%. The market is low-liquid, so any news about the collapse of another exchange with its own token will collapse the market in a day. It takes a couple of weeks for the dust to settle after FTX.
“The crisis did not allow bitcoin to grow”
ENCRY Foundation co-founder
With all the desire to reassure the market, I see no preconditions for bitcoin to recover even to $20,000. All the positive momentum that the market received after the publication of data on consumer price growth in the United States has already been taken into account in the price of bitcoin, which managed to recover to $18,000. But the crisis around FTX, which is still in an acute phase and has just begun to develop, did not allow bitcoin to grow and it again fell below $17 thousand.
Next week, the market will be waiting for developments around FTX, details of Alameda and FTX debts, possible solutions to the problem of repaying debts to customers, possibly the actions of US regulators, and they will definitely follow, because many companies that are somehow connected with the US market were affected — Galaxy Digital Circle.
It is not yet fully understood how catastrophic the collapse of Alameda is for those companies that Sam Bankman-Freed has actively rescued in recent months. There have been rumors of Alameda commitments of up to $50 billion, and I agree with the assessment – this could be the real equivalent of the collapse of Lehman Brothers for the crypto market.
Well, what can I say… bitcoin will easily go to $15 thousand, maybe a little lower, but hardly to $10 thousand. Next week, I allow a fall to $14-15 thousand, it is unlikely that the cryptocurrency will go even lower – as far as I can see from the order books , followed by large orders to buy. So even if bitcoin falls below this level, it will be immediately bought back.