Bitcoin drops as FTX collapse ripples through the crypto market

  /  4 minutes read
  • Genesis’s crypto-lending arm stopped withdrawals on Wednesday after reportedly not getting a $1 billion emergency loan.
  • Binance has introduced a new industry recovery fund as it continues to play the role of the good guy.
  • Searches for “Bitcoin is Dead” have gone up since FTX went down. Since 2010, when we began keeping track, Bitcoin has been said to be dead.
  • ETH has gone down, but bullish expectations have not changed. Move from the historical low of 2018 looks like it’s not done yet.

Crypto just isn’t big enough to have a big effect on the economy as a whole. On Thursday, November 10, the U.S. Labor Department said that the consumer price index, which helps measure inflation, slowed to “just 7.7%.” This was less than expected, so the S&P 500 stock price index shot up from $3,760 to over $4,000 the next day and is now around $3,950. Bitcoin’s price also went up and down. On Thursday, it was worth $16,000, but by Friday, it was worth more than $18,000. The only difference is that as of this writing, the price of bitcoin is around $16,600.

Kunji research trading view
Source: Tradingview

Bitcoin was able to stay above its most recent support level of $16,000 for a 12th day in a row. Last week, the collapse of the cryptocurrency exchange FTX set off a chain of bad events that didn’t affect the biggest cryptocurrency by market capitalization. Bitcoin is trading in a very narrow range, and it can’t seem to break through $17k.

Even though the fall of FTX has caused a lot of chaos and bad feelings, Bitcoin doesn’t care. It keeps making blocks, and the hash rate seems to reach new highs every week. To say it again, this is a measure of how much computing power is being used to keep the network safe. If Bitcoin were dead, this number would go down. It’s making things worse.

Kunji research Trading view

On Sunday, November 20, 2022, Bitcoin’s difficulty went up by 0.51% at block height 764,064. This made up for the 0.20% drop that was recorded two weeks ago. With the change on Sunday, the difficulty rating went from 36.76 trillion to 36.95 trillion, which is another all-time high.

Ether was down more than 6% from Saturday at the same time and was recently changing hands below its most recent $1,200 support. The market value of the second-largest cryptocurrency has dropped by almost 10% from its high of $1,275 last week. Other notable cryptocurrencies also experienced severe losses, with sports fan coin CHZ falling by more than 14%. Due to excitement for the World Cup, which began on Sunday with Ecuador defeating Qatar, CHZ and fan tokens for national soccer teams had recently increased.

Concluding Thoughts:

Lastly, we think it’s important to set CEXs apart from the rest of the digital asset ecosystem. The use of self-custody and on-chain protocols, which are truly decentralized and transparent, is the real innovation and value proposition of digital assets. The idea behind centralized exchanges is that they should be used as a way to get into this idea. In fact, we think that trading will move away from centralized exchanges (CEXs) and toward decentralized exchanges (DEXs) over the next few years as market participants become more aware of the saying “Not your keys, not your coins” and switch to decentralized, self-custodial alternatives. This is because FTX didn’t work, which led to fraud.

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