FTX’s asset sale will put pressure on Bitcoin quotes

12 September 2023 121
FTX’s asset sale will put pressure on Bitcoin quotes

The Bitcoin price dropped by 2.8% on Monday, falling below the 25,000 level for the first time since mid-June. By the end of yesterday's trading, the bulls managed to bring the quotes back to this level, and there is a strong rebound on Tuesday. Nevertheless, the risk of a new downward momentum remains high. Another test of the 25,000 level in the next few days is not ruled out.


Cryptocurrency market is increasing volatility ahead of September 13. Two important events will take place on this day. First of all, traders will follow the statistics on inflation in the United States for August. Accelerated price growth, already observed in July, may cause additional strengthening of the dollar and lower demand for risky assets.


Also, cryptocurrency market participants will closely monitor tomorrow's hearing around the FTX exchange. After last November's bankruptcy, the creditors made claims worth $16 billion. FTX management reported $7 billion in assets, about half of which is cryptocurrency.


At present, FTX has $560 million worth of Bitcoins on its balance sheet. These assets must be sold to at least partially cover the creditors' debt. FTX management plans to hire Galaxy Digital Holdings to control the asset sale process.


According to Bloomberg estimates, Galaxy Digital Holdings will sell cryptocurrency worth between $50 million and $200 million every week. This volume cannot be considered quite large, but the selling process will put pressure on Bitcoin and other token prices in any case. Additionally, these transactions may intensify the seasonal decline. September is historically the worst month for Bitcoin, with its price falling by 6.2% on average.


As long as Bitcoin quotes do not consolidate above the 26,000 level, the main scenario is another drop to the 25,000 level.

 


The following trading strategy may be offered:


Sell BTCUSD in the range of 25,700–26,000. Take profit – 25,100. Stop loss – 26,400.


Traders may also use the Trailing stop instead of the fixed Stop loss at their discretion.

This content is for informational purposes only and is not intended to be investing advice.

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