Bitcoin struggles to find dip buyers amid FTX fallout
The sell-off in cryptocurrencies has gotten worse.
FTT, the FTX token, is reeling after giving up as much as 88% of its value this week. Bitcoin dropped to a new low for the year after breaking the June low. Solana lost a third of its value today before bouncing off the lows. You get the picture.
Cryptos have sold off sharply over the past couple of days on renewed liquidity fears in the industry. Troubled crypto exchange, FTX, is in talks to be rescued by Binance, after it halted withdrawals.
Binance signed a nonbinding agreement on Tuesday to buy FTX's non-US unit. So, questions about the solvency of one of the world's largest crypto exchanges remain as there are no guarantees the deal will go through.
For Bitcoin, this could not have come at a worse time, after struggling over the past several months to find its feet.
Given Bitcoin's fresh breakdown after a lengthy consolidation, there's not much for the bulls to get excited over. They will now need to see a confirmed reversal signal before looking to potentially buy BTC or other coins.
Indeed, things could get ugly, even though we have already seen a massive decline already. It is always better to have some sort of confirmation that prices have bottomed than keep trying to catch a falling knife.
For me, Bitcoin now needs to reclaim the broken 20K level before turning positive on it again. For extra confirmation, a break above this week's high would probably mean game over for the bears. Failure to achieve this will keep the path of least resistance to the downside.
Even if you are not involved in cryptos, the turmoil is definitely something to keep an eye on, as it may be an additional factor impacting risk appetite across the financial markets.
By Fawad Razaqzada
FTT, the FTX token, is reeling after giving up as much as 88% of its value this week. Bitcoin dropped to a new low for the year after breaking the June low. Solana lost a third of its value today before bouncing off the lows. You get the picture.
Cryptos have sold off sharply over the past couple of days on renewed liquidity fears in the industry. Troubled crypto exchange, FTX, is in talks to be rescued by Binance, after it halted withdrawals.
Binance signed a nonbinding agreement on Tuesday to buy FTX's non-US unit. So, questions about the solvency of one of the world's largest crypto exchanges remain as there are no guarantees the deal will go through.
For Bitcoin, this could not have come at a worse time, after struggling over the past several months to find its feet.
Given Bitcoin's fresh breakdown after a lengthy consolidation, there's not much for the bulls to get excited over. They will now need to see a confirmed reversal signal before looking to potentially buy BTC or other coins.
Indeed, things could get ugly, even though we have already seen a massive decline already. It is always better to have some sort of confirmation that prices have bottomed than keep trying to catch a falling knife.
For me, Bitcoin now needs to reclaim the broken 20K level before turning positive on it again. For extra confirmation, a break above this week's high would probably mean game over for the bears. Failure to achieve this will keep the path of least resistance to the downside.
Even if you are not involved in cryptos, the turmoil is definitely something to keep an eye on, as it may be an additional factor impacting risk appetite across the financial markets.
By Fawad Razaqzada
Penafian
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