Bitcoin (BTC) might drop as low as $13,000 after the FTX debacle, says Mark Newton, Head of Technical Strategy at Fundstrat Global Advisors. He added that a drop to the $9.96k-$10k range is also possible as the situation worsens and should not be ruled out.
Late on Wednesday, Bitcoin’s price fell below USD16,000 as a large sell-off in the cryptocurrency market accelerated after Binance backed out of a deal to acquire its rival FTX, which is in economic upheaval.
Based on “corporate due diligence” and “the latest news reports regarding mishandled customer funds and alleged US agency investigations,” Binance tweeted that it will not be acquiring FTX. The revelation shattered the faith of investors looking forward to Binance backing the failing exchange.
Newton’s sentiments have been mirrored by a slew of other industry observers, with JP Morgan researchers projecting a drop to $13,000 for BTC. Analysts predict that the current events will trigger “a cascade of margin calls” in the cryptocurrency sector.
Similarly, a popular crypto analyst going by the alias AlitcoinSherpa, indicated that there is a good probability BTC would follow past tendencies. The analyst predicts that the asset can retrace to $12,000. He says that “strong resistance for Bitcoin” would be formed at that price.
However, the analyst emphasized that if Bitcoin reaches $12,000, there would be increasing buying pressure.
Furthermore, crypto trading veteran Michael van de Poppe indicated that a correction to $10,000 is still possible, but it will depend on how the market responds to the crisis.
Meanwhile, Bloomberg Intelligence commodity strategist Mike McGlone added that Bitcoin has a support level at $10,000 and that the FTX situation might set off a “macroeconomic dominoes.”
In addition, analysts also expect the next update to the U.S. Consumer Price Index on November 10 to heighten market volatility for cryptocurrencies. The last time inflation data was announced, the price of Bitcoin dipped. At press time, Bitcoin was trading at $16,683, down more than 8% over the past day.
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Source: Cryptocurrency - investing.com
