After the FTX incident that ravage the crypto market, Bitcoin managed to stay in the $16k price range. Several major crypto players have just announced the losses they have suffered due to the FTX event. While there is still uncertainty regarding this impact, crypto assets still look sluggish. The Pintu Trader Team has collected various important data about the movement of the crypto market over the past week. However, you should note that all the information in this Market Analysis is for educational purposes, not financial advice.
St. Louis Fe President James Bullard says that monetary policy tightening since March appeared to have had only limited effects on inflation. This statement has caused the equity markets to jerk and fall after gaining positive momentum over the week. Bullard suggested that the Fed might need to increase the rate till the FFR need to be in the 5-7% range to bring the inflation down.
The 10-year US Treasury bond yield dropped sharply from 4.25% on October 24 to 3.8%. The recent CPI reading suggests that inflation is peaking, although we have yet to see a consistent downward trend for confirmation that the worst is over.
The dollar continued its rally by net inflows of capital. Over the past 12 months through September, private inflows jumped to a record $1.7 trillion. Additionally, foreigners’ net purchases of US bonds soared to a record $1.1 trillion.
Over the week, after the FTX turmoil, more events unfolded as expected. First, we have the lending business arm of the crypto investment bank, Genesis Global Trading, known as Genesis Global Capital temporarily suspending redemptions and new loan originations in the wake of FTX’s collapse. Genesis disclosed earlier that its derivatives unit had about $175 million in FTX. Its parent company, DCG (Digital Currency Group) had earlier infused Genesis with 140 million of equity.
Next, Gemini reportedly was forced to temporarily halt withdrawals on its Gemini Earn program where customers earn interest on their digital currency. Their earn accounts were frozen after its main lender Genesis reported a similar freeze.
Investors are pulling funds out of major CEX as a result of FTX’s collapse. We have outflows from major exchanges, with Gemini, OKX, and Crypto.com having the most outflow of funds.
The decentralized exchanges have seen a significant influx of funds from CEX. Hence the higher trading volume over the past 2 weeks is shown below.
The stablecoin market cap is decreasing, which will continue to hurt major crypto prices. The market will struggle for quite some time, despite the economic indicators getting better. The FTX fallout has made things sour for the crypto market at least for the next few months.
BTC is currently moving sideways after the FTX implosion. There is strong support at the 13-14k price range. The current price might not hold should there be another significant news impacting the crypto market (effects of FTX). We can see that a falling wedge pattern is forming, and since we are in a downtrend, expect a short-term reversal to the upside.
You can learn more about price patterns in “5 Crypto Price Chart Patterns to Learn“.
Let’s take a look at ETH/BTC chart, notice that we are at the Fibonacci golden pocket. If we fall from the support at the bottom channel of the pocket, expect a significant ETH value drop relative to BTC.
The total crypto market cap has hit resistance at 250 weeks MA. Should we close below this line, expect more downward trends in the coming week.
📊 Exchange: As the exchange reserve continues to fall, it indicates lower selling pressure. Net deposits on exchanges are high compared to the 7-day average. So, higher deposits can be interpreted as higher selling pressure.
💻 Miners: Miners are selling holdings in a moderate range compared to their one-year average. Also, miners’ revenue is decreasing significantly compared to the cost they put in. This could indicate that the price is undervalued along with the increasing miner’s motive to hold their coins.
🔗 On-chain: More investors are selling at a loss. It can indicate a market bottom in the middle of a bear market. Long-term holders’ movement in the last 7days was higher than the average. If they were moved for the purpose of selling, it may have a negative impact. Investors are in a capitulation phase where they are currently facing unrealized losses. Finally, this indicates the decreasing motive to realize loss which leads to a decrease in sell pressure.
🏦Derivatives: Long-position traders are dominant and are willing to pay short traders. Furthermore, buying sentiment is dominant in the derivatives market. More buy orders are filled by takers. As open interest decreases, it indicates investors are closing futures positions and the possibility of trend reversals. So, this might trigger the possibility of a long/short squeeze caused by sudden price movement or vice versa.
⚙️ Technical: RSI indicates an oversold condition where 73.00% of price movement in the last 2 weeks has been down and a trend reversal can occur. Besides, Stochastic RSI indicates an oversold condition where the current price is close to the bottom of the last 2 weeks and a trend reversal can occur.