Growing pressure from rising interest rates, a series of high-profile hacks, and warnings about global economic recession, all together severely destroyed investor sentiment and one of its results was the bankruptcy of FTX, the world’s second-largest exchange. In response, Bitcoin lost more than 16% in less than 24 hours!
BTC was not the only victim, almost all altcoins had a similar experience. After some correction, Ripple lost more than 30%, now trading more than 23% lower than yesterday’s open price. Ethereum also had the same reaction as Ripple. At first lost more than 28%, however after some correction, now trading at 22% lower than Tuesday’s open price.
Risk and uncertainty, are something that cannot be done in any way at the moment
Let’s make it short, what happened for FTX was just a simple game between the world’s first and second biggest exchanges. This childish feud between two CEOs shows how small the cryptocurrency market is that even two people can destroy the lives of thousands or millions of retailers just because of their aims and benefits. In my opinion, all details of how that happened make no sense and change nothing but increasing pessimism.
Anyway, what happened now is the double losing game for both of these exchanges and of course for millions of retailers, which are not important for none of them. Neither Binance CEO Changpeng Zhao nor FTX CEO Sam Bankman-Fried has been worried about clients’ balances. However, as a result, now we can see much less trust in the cryptocurrency world. On the other hand, increasing interest rates and bond yields with a higher risk of global economic recession will increase the pressures on the market sentiment. Therefore, the tendency to lower prices is more than increase.
From a technical point of view, as we can see in the below chart, under 18,800 USD, Bitcoin entered a powerful downtrend cycle. As we were expecting before, it is the same prediction for the next steps. Under 17,500, doors will open for 14,000. On the flip side, an only recovery above 25,500 can change the market sentiment.