Concerns over a withdrawal run from the cash-strapped cryptocurrency exchange FTX continued to send cryptocurrencies into freefall this week, putting Bitcoin, Ethereum and other altcoins at risk. At press time, Bitcoin was trading at $16,574 after falling 1.61% in the past 24 hours. Over the past week, the major cryptocurrency has fallen around 20%.
In contrast, Ethereum was down around 1.77% at $1,201 over the past day, extending its losses to around 21.9% in the eight days to Monday. Overall, the crypto market capitalization has fallen 2.31% in the past 24 hours to around $829 billion as investors weigh in on the possible political consequences in the digital asset market thanks to the FTX scandal. .
Bitcoin may dive further
Although Bitcoin correlates with the US stock market, it behaved differently last week. a drop and “strong closure” below the multi-year support at $18,500 sent ripples among traders. In the short term, while many believe the price may attempt to retest this level, it could still dip further.
“This support level was the ATH of the previous cycle. So far, there is no record of Bitcoin returning below the ATH of its previous cycle. This could indicate weakness in the cryptocurrency market in the near future and further price reductions,” wrote Cryptoquant analyst MJ Shahsavar.
According to technical analyst Mattew Hyland, Bitcoin could print another leg up to $15,100, as he illustrated in his November 14 tweet.
Pseudonymous crypto analyst “Titan of Crypto” also shared the “Bitcoin Power Law Corridor” – a metric that allows analysts to make general predictions regarding the long-term future price of bitcoin. According to the expert, Bitcoin is at “last resort support” on the indicator suggesting that the price may rebound and close above the purple line soon. However, while he did not provide specific prices that Bitcoin would rebound to, others indicated a bounce around $13,700 or $14,500 before the end of the year.
The ebb tide
Meanwhile, despite last week’s jolts, Bitcoin’s price may find some respite from a spike in currency outflows.
“Following the collapse of FTX, Bitcoin investors withdrew self-custodial coins at a historic rate of $106,000 BTC/month,” onchain analytics firm Glassnode tweeted. According to the company, this behavior compares to only three other times; April 2020; November 2020 and June-July 2022 – periods that were followed by a significant rise in the price of Bitcoin.
Over the past week, investor holdings also appear to be in transition, with stablecoins increasingly flocking to exchanges as trustless assets such as BTC and ETH exit.
“This week also saw one of the most dramatic single-day influxes of stablecoins to any exchange on November 10. More than $1.04 billion worth of stablecoins poured into exchanges after the collapse of FTX”, Glassnode added. According to the firm, this leads to a net increase in the “buying power” of stablecoins on exchanges of around $4 billion per month, which could help support Bitcoin prices.