March 28, 2023

Bitcoin hits new two-year low on FTX bill spread

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(Kitco News) – Pain continued for a second day in crypto markets on Wednesday – with no relief in sight – as the ongoing collapse of cryptocurrency exchange FTX has triggered the asset class’ second major contagion event in the past seven months. .

Losses have been widespread across the market, with virtually no token left unscathed as the fall of one of the region’s largest exchanges has pushed investors to the safety of stablecoins until volatility subsides and some stability is achieved.

Bears rebuffed an early morning attempt to drive Bitcoin (BTC) through $19,000 resistance, data from TradingView shows, pushing the crypto to a new annual high of $15,845 in afternoon trade on rumors that Binance will not buy FTX. started spreading on social media.

BTC/USD 4 hour chart. Source: TradingView

Jim Wyckoff, senior technical analyst at Kitco, noted the battle for bulls to generate any kind of momentum, stressing that “bears have quickly gained technical strength to hint at even more bearish pressure in the near term.”

The downturn has turned into a positive development in some markets — especially precious metals — as Tuesday’s turmoil in crypto markets “has translated into safe-haven buying of gold and sharply increased prices for the yellow metal and silver,” Wyckoff said.

“Cryptos are just like any other market,” Wyckoff added. “When a crisis of confidence comes, both traders and investors all run out the door at the same time, creating a serious liquidity crisis,” as evidenced by Wednesday’s widespread declines.

As for what’s next, Rekt Capital released a chart detailing the recent price decline from an area first spotted by the analyst in May.

BTC/USD 1 month chart. Source: Twitter

“Months later and BTC has reached this green zone,” Rekt Capital said, adding that “yet [a] a chance to decline towards the ~$15500 level, and a chance to move as low as the orange ~$13700 level if things get even more extreme.”

As for the price levels to watch in case the crypto market is able to reverse course from the current weakness, well-known author and trader Peter Brandt posted the following tweet outlining the levels that “negated the decline.” consequences.”

The financial markets will strike

As the FTX saga began to unfold on Tuesday, traditional markets initially weathered the downturn and ended the day in the green. That changed on Wednesday, when sustained weakness – which led to a new two-year low in BTC – finally hit the stock market, pushing the asset into the red.

Mike McGlone, senior macro strategist at Bloomberg Intelligence, highlighted this possibility in an early morning tweet, warning that the contagion could soon spread to other markets that have been under pressure in 2022.

In McGlone’s extended analysis, the strategist warned of the possibility that Bitcoin could return to the $10,000 support and that the “macroeconomic Domino could be more significant.”

As the market closed Wednesday, the S&P, Dow and Nasdaq were all down 2.08%, the Nasdaq down 1.95% and the Nasdaq down 2.48%.

There were no significant movers among the top 200 tokens.

Daily development of the cryptocurrency market. Source: Coin360

The market capitalization of cryptocurrencies is now 821 billion dollars, and Bitcoin’s dominance rate is 38.3%.

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect his own Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; However, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is for informational purposes only. It is not a solicitation to make exchanges in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for any loss and/or damage arising from the use of this publication.

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