During bear markets, every bit of negative news, whether directly connected or not, tends to scare away investors. The protests in China against Covid restrictions are the latest to spook the crypto markets. The sentiment soured further when crypto firm BlockFi filed for Chapter 11 bankruptcy protection, the latest calamity of the FTX collapse. Many fear that FTX’s downfall could impact the whole crypto ecosystem adversely.
While that may be true in the short term, Chainalysis research lead Eric Jardine, said in a Twitter thread on November 24 that “Mt. Gox was a bigger industry player than FTX at the time of its collapse. That’s good news since Mt. Gox’s collapse didn’t destroy crypto.” He expects the crypto industry to bounce back from this crisis, “stronger than ever.”
Bitcoin is consolidating between $15,460 and $17,568 for the past few days. This suggests a state of indecision between the bulls and the bears. The indicators are also giving mixed signals.
While the downsloping moving averages indicate advantage to sellers, the positive divergence on the relative strength index (RSI) suggests that the bearish momentum could be weakening. It is difficult to predict the direction of the breakout from the range. If the price turns down from the 20-day exponential moving average (EMA) and plummets below $15,460, the next leg of the downtrend could begin.
The BTC/USD pair could then drop to $13,456 and later to $12,000. Conversely, if bulls push the price above the 20-day EMA, the pair could attempt a break above $17,568. The zone between $17,568 and the 50-day simple moving average (SMA) may act as a major barrier but if bulls overcome it, the pair could surge toward $21,478. Such a move will suggest that the downtrend could be over.
Traders may consider long positions on a break above the 50-day SMA but until then, it is better to remain on the sidelines.
Lastly please check out the advancement’s happening in the cryptocurrency world.
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