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Monday, November 28, 2022

$1.5$ bn. moved, the FTX spillover effect, more trouble ahead

$1.5$ bn. moved, the FTX spillover effect, more trouble ahead

Bitcoin / U.S. dollar BITSTAMP:BTCUSD

Over the weekend, news came out that $1.5 billion worth of Bitcoin was moved off the Coinbase exchange within less than 48 hours. In our opinion, this highlights high anxiety even among prominent market participants. Therefore, we voice a word of caution over the coming weeks. We believe more cryptocurrency exchanges will fall victim to improper money management, lack of due diligence, and the FTX spillover effect.

With that being said, the names of the fifty biggest creditors to FTX remain unknown to the public, leaving room only for speculation as to who might belong to the list of affected parties. With over $3 billion of debt, we expect the announcement of these names to cause more havoc in the market.

In addition to that, we expect more economic tightening and regulation to come in the foreseeable future, ultimately dragging the price of Bitcoin lower. Accordingly, we remain bearish on the asset and maintain our price targets at 15 000$ and 13 000$.

Illustration 1.01

snapshot
Illustration 1. 01 displays the daily chart of BTCUSD . The red arrow hints at a substantial decline in volume over the past four weeks. In order to confirm our bearish thesis, we would like to see a pick-up in volume accompanied by a declining price.

Technical analysis - daily time frame
RSI , MACD , and Stochastic are bearish . DM+ and DM- are also bearish . Overall, the daily time frame is bearish .

Illustration 1.02
snapshot
Illustration 1.02 shows the daily chart of BTCUSD and simple support/resistance levels.

Technical analysis - weekly time frame
RSI , MACD , Stochastic , DM+, and DM- are all bearish . Overall, the weekly time frame is bearish .

Please feel free to express your ideas and thoughts in the comment section.

DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
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