Bitcoin Appears Prepared For An Extremely Bullish Reversal As The FTX Crisis Settles
Following a hectic month defined by a broad liquidity crisis fueled by the collapse of FTX, Bitcoin continued to consolidate on Tuesday.
The biggest cryptocurrency by market capitalization was trading at $16,467 at the time of writing, an increase of just 1.57 percent over the previous 24 hours. Bitcoin has held steady above the psychological $16,000 threshold for the last three weeks, after dipping momentarily below $15,500 last week.
In the previous week, crypto markets have stabilized, with Monday’s news about the aftermath of the collapse of lending firm Blockfi barely affecting prices. Despite the fact that a number of crypto analysts believe that the recent repercussions may assist to boost the crypto business by compelling authorities to increase their efforts, the market remains stable.
However, as the dust settles after the collapse of FTX, observers are gaining a clearer understanding of what has occurred behind the scenes.
In a study published on Monday, the company said that the cryptocurrency’s price has likely reached a moment of inflection after falling to levels comparable to the 2018 bear market. In addition, the company observed that the current unrealized loss carried by the actively traded coin supply was essentially at an all-time low, rivalling only the absolute bottoms of the 2015 and 2018 bear cycles.
Even if Bitcoin seems to be in a favourable position, it remains to be seen whether the latest sell-off is just a continuation of the negative trend or a trigger for a positive reversal.
According to Michal van de Poppe, CEO and Founder of the Eight Global trading platform, Bitcoin’s support of around $16,000 is critical.
Crypto expert “Rekt Capital” argues that the direction of Bitcoin might be determined before the end of this month. According to him, Bitcoin fell into the $13900-$19500 Monthly Range as it lost the $19500 level as support. “Monthly Candle Close is approaching. A Monthly Close below $19500 would likely cement the $13900-$19500 Range as the market’s new range of play,” he added.