Bitcoin has done almost nothing during the trading session on Friday yet again, as it is essentially just sitting in the same area that it has been for 2 weeks. More likely than not, Bitcoin traders are waiting to find out what the next shoe to drop is going to be, as there has been a whole litany of scams and schemes laid bare over the last couple of months.
The Collapse of FTX Is Impacting Traders and Markets
Bitcoin will continue to struggle finding buyers going forward, for a whole host of reasons. Besides the fraud that is so evident in the crypto world, there are fundamental reasons that could work against Bitcoin and crypto in general as well. After all, the fact that FTX has completely collapsed in what has been an outright Ponzi scheme has people shying away from the market. Furthermore, you need to keep in mind that Bitcoin is very far out on the risk appetite spectrum, meaning that it needs cheap and easy money to rise in value. Bitcoin has never had to deal with the tightening Federal Reserve, and it has clearly shown that it cannot handle tight money.
It is obviously not a store of value, because it cannot stabilize its price. It is obviously not money, because nobody wants to take payment in something that can lose 70% over the next year. Can you imagine selling a house for Bitcoin, only to see what would have been $400,000 turn into $100,000 within 12 months? There is absolutely no way to use it for payment from a business standpoint with any type of acumen, so I just don’t see it getting a bit of a boost from there either.
Bitcoin Trading Analysis Looks Horrible
- From a technical analysis standpoint, Bitcoin looks horrible. The 50-Day EMA sits just above the $18,000 level, which is an area that previously had been supported.
- If the market were to break above there, the I suspect there is a lot of selling pressure waiting to get out of the market that had bought into the idea of $18,000 being the bottom.
- On the other hand, if we break down below the recent lows, then there’s not much to keep this market from dropping down to the $15,000 level, which then opens up the possibility of a move back down to the $12,000 level, creating an entire “round-trip” from the initial spike higher that kicked off the bullish market.
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