Technical Analysis

The aftershock of the crypto market?

Table of Contents

Crypto Market

Bitcoin is
trading just below 16K by the start of active European trading on Monday,
losing 23.6% to levels of seven days ago. Ethereum collapsed 25% to $1190.
Other top altcoins in the top 10 fell from 20% (BNB) to 29.6% (XRP).

The total
capitalisation of the crypto market, according to CoinMarketCap, fell 27% over
the week to $757bn, to its lowest level since December 2020.

Bitcoin and
the overall crypto market collapsed to two-year lows last week amid the
bankruptcy of cryptocurrency exchange FTX and related companies. We continue to
compare what is happening to the banking crises of the early 20th century,
which led to the formation of modern securities market regulation with more
transparency for investors but less anonymity.

Bitcoin was
down to $15.8K by Monday morning, repeating lows set from Wednesday to
Thursday. This is a timid attempt by speculators to form a ‘double bottom’, a
reversing pattern in tech analysis. But we also draw attention to the
impressive selling hitting the crypto market on bounces from increasingly lower

behaviour still indicates a huge interest in selling, creating risks for a new,
deeper downside slippage. This could be the $12-14K range in a reduced
liquidity environment.

The collapse
of FTX is likely to cause more reputational damage to second-order altcoins,
pushing back the new alt-season for some time. However, the top two dozen
cryptocurrencies with working projects remain a good long-term bet for a
diversified crypto portfolio.


According to
Glassnode, the share of profitable bitcoin addresses online has fallen to 50% –
the lowest since March 2020. Short-term investors who have held BTC for less
than six months have once again capitulated. Miners were also part of the
reset, data from the CryptoQuant platform shows. Long-term investors, who now
control up to 35.4% of the total BTC supply, also suffered significant losses.

The current
situation in the cryptocurrency industry echoes the 2008 financial crisis, and
more companies could collapse in the coming weeks, warned Binance CEO,
Changpeng Zhao. He said that the market has yet to feel the effects of the
crisis around FTX.

believes the collapse of FTX will help the cryptocurrency industry recover and
prompt regulators to speed up regulation of the sector.

This article was written by FxPro’s Senior Market Analyst Alex

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