The cryptocurrency market has been alone with itself since the FTX affair, which triggered a powerful crisis of confidence vis-à-vis investment in the sector, but above all vis-à-vis the primary players that are the centralized exchanges. From a technical analysis perspective, the price of Bitcoin (BTC) remains under downward pressure as long as it holds below the lows of last June.
The immediate challenge of outflow from centralized platforms
Since the bankruptcy of FTX, the communication of major crypto players is in full swing to try to reassure investors about their solvency. Most exchanges give details on the amount of their equity, announcing the total assets they hold and restating it from the value of their own token to differentiate themselves from the capital structure that was that of FTX. .
The FTX hack has added an additional level of fear to investors who continue day after day to withdraw their funds from centralized cryptocurrency platforms.
To sum up, the crypto market is now facing itself, the period of the strong impact of correlations between asset classes is temporarily suspendedthe time to restore the legal minimum of confidence to stop the haemorrhage of withdrawals.
The onset of disinflation in the US, the decline of the US dollar in Forex, the decline in market interest rates and the bullish rally in equities had no positive effect on BTC, but would have a maximum. in the pre-FTX world.
For the analysis of the crypto market, the work is therefore simplified with a return to the indicators specific to cryptos, in the first place of which the new decisive indicator: the evolution of the capital curve deposited on cryptocurrency exchange platforms and currently it is in free fall.
On a fundamental level, the work of auditing and transparency of the exchanges concerns the medium term, but the dynamics of outflow concerns the very short term, the immediate. In order to avoid a collapse of the Bitcoin (BTC) price below $10,000 this November, the outflow movement must urgently stop.
Chart that juxtaposes the price of bitcoin (in yellow) and the amount of deposits (in green) on centralized crypto exchanges
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On the technical side, the price of bitcoin remains bearish below the old lows of last June
In my analysis published last Thursday in the columns of Cryptoast, I returned to the area of long-term interest on the graphic level which is currently being worked on by the price of Bitcoin.
If we take the crypto market as a whole using the total crypto market capitalization, the market is even already moving at a relative historical low by being more than 15% below its 200-week moving average, which it does not has ever done in all of its (young) history. As for the course of bitcoin, it now loses 71% over 12 rolling months, knowing that historically it has never lost more than 73% over this same period.
So, in a climate of “normal” confidence in cryptos and platforms, I would have without hesitation argued for a phase of long-term bullish accumulation. But the market is currently experiencing a crisis of “general public” confidence in the safety of assets invested in cryptos, so I take a step back with the sole chartist prism.
To remain factual, the price of Bitcoin therefore remains in a downtrend as long as it remains below its lows of last June.
Graph showing Japanese intraday bitcoin price candles
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