Elon Musk claims BTC "will make it"

 Elon Musk claims BTC "will make it" 

Following its lowest weekly closing in two years, bitcoin tickers are down $16,320 as the new week begins on shaky ground. 

Following the collapse of the exchange FTX last week, the biggest cryptocurrency experienced a significant decline and is still dealing with the consequences. 

Investors are unsure of what will happen next in a market that is getting more unpredictable as more companies raise concerns about solvency and regulators intensify their probes into the cryptocurrency industry.

Even some of the most well-known people in the sector warn that it has been pushed back several years as a result of last week's events, which reflect the sentiment of the majority, which is one of profound anxiety. 

In the meantime, Bitcoin is conducting business as usual. It has survived several such disasters, like FTX, and the network's internal structure is unchanged. 

In light of the average hodler's struggles to cope with significant losses and continued volatility, Cointelegraph examines the variables that will affect BTC price movement in the next days.

Crypto anticipates new FTX fallout

Although there is little certainty in the present crypto market climate, it is safe to conclude that FTX and its fallout are currently the main causes of volatility in the price of Bitcoin. 

A -$5,500 "red" candle for the seven days ending on November 13 to the lowest weekly finish since mid-November 2020, according to the weekly chart, which also includes information from Cointelegraph Markets Pro and TradingView.

BTC/USD is still around that close at the time of writing, with $16,300 making a welcome comeback after the pair fell to barely $15,780 on Bitstamp overnight.

When it comes to FTX, the tale is far from finished as corporations having exposure to the exchange and associated entities encounter difficulties. 

Commentators predict that repeat performances could occur in the upcoming days and weeks as a result of the ripple effects that are forcing more and more crypto names out of business. 

Particularly under scrutiny are exchanges, with Crypto.com, KuCoin, and other platforms raising concerns about liquidity.

A rise in withdrawal activity at Crypto.com and Gate.io that day prompted concerns that it would be the most recent exchange to experience a "bank run" as investors try to regain control of their money. 

According to data from on-chain analytics company CryptoQuant, 1,500 BTC left Gate.io on November 13, and as of Nov. 14 there are currently about 800 BTC and increasing.

More generally, data indicated approximated 2.09 million BTC in exchange reserves, with CryptoQuant stressing that this number may not accurately reflect the situation given the current upheaval. 

When reserves were last this low, it was in the beginning of 2018.

Bitcoin increases from $15,700 as Musk backs the cryptocurrency

Making BTC price projections against the backdrop of continued uncertainty is therefore no simple feat. 

Regarding the moving average convergence divergence (MACD), expert Matthew Hyland forewarned that a bearish scenario that twice happened on the BTC/USD 3-day chart in 2022 resulted in losses was likely to occur again. 

For the first time since April, the Bitcoin 3-Day MACD is poised to cross Bearish tomorrow, he noted:

"If BTC has a rise in price before the 3-Day closes, it can be avoided. The previous two crossovers in the previous year caused more price movement downward."

Hyland did point out that it took over a year for Bitcoin to establish a macro price bottom following the 2014 Mt. Gox crisis. 

Not even 11 days have passed since FTX shut down, he said. 

Il Capo of Crypto, a fellow expert, asserted that the market was ready for a "final capitulation," which might occur sooner rather than later.

In a series of tweets, he predicted that this would manifest as a "bull trap" at first, followed by a forceful rejection that would cause the market to reach new lows. 

He estimated that the comedown for cryptocurrency will be between 40 and 50 percent. 

Popular trader Crypto Tony was concerned that even the lowest weekly closing in two years might not hold as support on shorter time frames. 

He remarked on the recovery from intraday lows of $15,780, saying, "Nice breakout, but if we cannot hold the swing low at $16,400 then this was just a fake out and we wait for a test lower."

Elon Musk, the CEO of Twitter, announced his implicit support for the action. 

In a Twitter debate that day, he stated, "BTC will make it, but it might be a long winter."

Another short-term price trigger was the decision by the biggest exchange, Binance, to establish a special recovery fund in order to protect businesses.

Focus is placed on stock correlation during a quiet macroweek.

The situation outside of crypto highlights how much FTX has been a "black swan" event for the sector. 

The United States stock markets rebounded from earlier in the month's losses as Bitcoin and altcoins were busy losing more than 25% in a matter of days. 

As a result, according to research firm Santiment, a strong divergence between Bitcoin and risk assets is currently taking place, helping to disrupt a link that has persisted for the past year.

As the trading work week comes to an end, it stated in a tweet last week that "the week's story is the distinct divergence between crypto (following FTX's fall from grace) & stocks" 

"Should traders' confidence in $BTC return following bad circumstances, a bullish divergence with the SP500 is building."

Additionally, market analyst Holger Zschaepitz pointed out the growing performance disparity between Bitcoin and the Nasdaq. 

"Largest weekly difference between Nasdaq's gain and Bitcoin's declining performance since 2020. The crypto ecosystem shrank to the equivalent of 1% of all global equities, according to recent comments. 

Given the irregular movements of the U.S. dollar strength, such decreased connection might be advantageous macroeconomically. 

Prior to the opening of Wall Street on November 14, the U.S. dollar index (DXY), which had tried to recover past 107, failed, with the inference that risk assets should increase as a result. 

But should prices rise back to their previous highs, the situation might quickly change dramatically. 

Nevertheless, the index returned to support not tested since mid-August as a result of the intraday DXY lows.

However, popular trading organization Stockmoney Lizards noted that DXY has broken a parabolic curve in place since 2021 while commenting on the longer-term performance. 

Correction will benefit Bitcoin, according to several Twitter comments.

Fever to "buy the dip" spreads as miner sales decline

There are some established hodlers that are actively attempting to remove their money from exchanges or strategize how to take losses. 

According to on-chain data, both large and small investors "bought the dip" as BTC/USD touched multi-year lows last week. 

Glassnode, an on-chain analytics company, reports a sharp rise in wallets carrying between one and ten bitcoins.

The "mega whales" of Bitcoin, the largest cohort of hodlers, also seem to be following the pattern. According to Glassnode, the number of these entities having a wallet balance of 10,000 Bitcoin or more is presently close to 130. 

Popular social media pundit Crypto Rover responded, saying "Whales are gathering at a pace never seen before."

Meanwhile, miners are a group that is firmly not in an accumulating phase right now. The Bitcoin miner reserves monitored by CryptoQuant are continue declining after a dramatic decline last week. 

Miners' reserves have increased from 1,858,271 BTC on November 8 to 1,853,606 BTC as of this writing on November 14. 

Despite this, reserves are still higher than they were at the beginning of 2022, and recent sales only make up a small fraction of the overall position of the miners.

Sentiment data provides some glimmer of optimism.

Naturally, FTX had a significant negative impact on the sentiment of the entire crypto market, but is it really that bad?

The industry may actually be accepting the barrage of bad news, according to the Crypto Fear & Greed Index. 

The Index's score reached a regional low of 20/100 during the weekend, categorizing the market's state as one of "severe anxiety." 

That is a 50% decline from the three-month sentiment high of 40/100 that was reached on November 6th.

Nevertheless, scores in 2022 have been substantially lower, with the Fear & Greed rating only reaching 6/100 for the entire year. 

Even a fresh 50% plunge from current levels, should more fallout occur, would only bring sentiment to the region that typically denotes the macro price bottoms for BTC/USD, around 10/100.

Article Credit: CoinTelegraph

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