The cryptocurrency market has been on its own since the FTX affair, which triggered a powerful crisis of confidence in investing in the sector, but especially in the primary players, the centralized exchanges. In terms of technical analysis, the price of Bitcoin (BTC) remains under bearish pressure as long as it remains below the lows of last June.
The immediate issue of decollection from centralized platforms
Since the FTX bankruptcy, communication from major crypto players has been in full swing to try to reassure investors of their solvency. Most exchanges are giving details of the amount of equity they have, announcing the total assets they hold and restating it from their own token value to differentiate themselves from the capital structure that FTX was.
The FTX hack added another level of fear to investors who continue to withdraw their funds from centralized cryptocurrency platforms day after day.
To sum up, the crypto market is now facing itself, the period of high correlation impact between asset classes is temporarily suspended, the time to restore the legal minimum of confidence to stop the hemorrhage 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 recovery in equities have had no positive effect on BTC, but would have a maximum effect 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, first and foremost the new decisive indicator: the evolution of the curve of the capital deposited on cryptocurrency exchange platforms and currently it is the free fall.
On a fundamental level, the work of auditing and transparency of exchanges is focused on the medium term, but the dynamics of the outflow are focused on the very short term, the immediate. In order to avoid a collapse of the Bitcoin (BTC) price below $10,000 this November, the decollection movement must be stopped urgently.
Graph juxtaposing the bitcoin price (yellow) and the amount of deposits (green) on centralized crypto exchanges
On the technical side, bitcoin price remains bearish below the former lows of last June
In my analysis published last Thursday in the columns of Cryptoast, I returned to the long term area of interest on the chart that is currently worked by the Bitcoin price.
If we take the crypto market as a whole using total crypto market capitalisation, the market is even already moving on a relative historical low by being more than 15% below its 200-week moving average, which it has never done in its entire (young) history. As for the bitcoin price, it is now down 71% over 12 months, whereas historically it has never lost more than 73% over the same period.
So, in a climate of “normal” confidence in cryptos and platforms, I would have no hesitation in arguing for a long-term bullish accumulation phase. But the market is currently experiencing a “mainstream” crisis of confidence in the safety of assets invested in cryptos, so I’m taking a step back from the chartist prism alone.
So to remain factual, the Bitcoin price remains in a downtrend as long as it holds below its lows from last June.
Chart that exposes the intraday Japanese candles of the bitcoin price
