It's been more than a week since one of the largest cryptocurrency exchanges, FTX, reported difficulties in its operating cycle. In fact, FTX went bankrupt, with many investors suffering losses. Numerous exchanges are now setting up recovery funds and publishing their assets on the balance sheets.
Currently, investors are recovering from the FTX collapse. Bitcoin appears to be stable at the level between $16,000 and $17,000. But it’s worth keeping an eye out!
Other crypto market participants may have new challenges in the near term. Since all market players are interconnected, the bankruptcy of a major actor won’t go unnoticed. A "knock-on effect" may impact funds, exchanges, and large investors.
To understand all potential issues, the chart given below shows Deutsche Bank's relations with other market participants.
Deutsche Bank's relations with other market players
The technical analysis on the one-hour timeframe suggests that Bitcoin continues to decline.
The uptrend has been broken down. The short-term target is the base of the triangle. This target coincides with the local lows of $15,541. The medium-term downward objective can be determined by using Fibonacci retracement levels. Let's draw the Fibo levels throughout the corrective rebound wave, receiving the downside target of 1.618. It is equal to $14,000.
Stop can be selected as the level of breaking through the triangle's upper boundary, i.e. $17,200.
Bitcoin, one-hour timeframe
The situation is also in favor of the decline on the daily timeframe.
Due to the FTX exchange issues, bitcoin moved down from the $18,000-25,000 trading range (rectangle). Then it tested the rectangle upwards and moved lower again. Thus, the currency confirmed the exit from the rectangle downwards.
Let’s build the Fibo levels for the entire wave of corrective rebound (rectangle) in the same manner. The target is slightly lower than on the one-hour timeframe, reaching $13,000.
Moreover, there is some additional statistical data.
Bitcoin has experienced three sharp falls from its high of $68,000 with an average drawdown of -39%. It is now in its fourth drop. To reach the average drawdown, Bitcoin must hit $13,000.
Currently, the most interesting method is to open short positions on BTC/USD with the following deal parameters:
Take profit 1 - $15,541. Take profit 2 - $14 000. Take profit 2 - $13 000.
Stop loss - $17 200.
This content is for informational purposes only and is not intended to be investing advice.
