Bitcoin went below 25 days and 50 days moving average and the Ichimoku cloud.

Bearish view

  • Sell ​​the BTC/USD pair and set a take-profit at 14,500.
  • Add a stop-loss at 17,000.
  • Deadline: 1 day.

Bullish view

  • Buy the BTC/USD pair and set a take-profit at 17,500.
  • Add a stop-loss at 14,500.

BTC/USD price fell below 16,000 amid growing contagion risks in the cryptocurrency industry. Bitcoin plunged to a two-year low of 15,501, around 24% below the high point this month. Other altcoins like Solana, Ethereum, and FTT crashed at a faster rate.

Crypto Contagion Risks

Cryptocurrencies are having their worst week since May as concerns over the industry continue. In May, the main concern was the collapse of Terra, which pushed companies like Voyager Digital and Celsius.

This week, there are fears that the crypto industry may have its Lehman moment following the collapse of FTX. Prior to its collapse on Tuesday, FTX was one of the largest crypto exchanges in the world. It processed billions of dollars worth of coins daily.

FTX collapsed after a report highlighted its relationship with Alameda Research. According to CoinDesk, most of Alameda’s assets are in FTX Token (FTT). Following the revelation, Binance announced that it was selling $500 million worth of FTT tokens.

After that, most FTX customers decided to withdraw their money, which led to a major liquidity crisis. As a result, the company has requested to be acquired by Binance, which will provide the necessary liquidity. In a statement, Binance said it would not complete the transaction, citing a new SEC investigation and fraud cases.

Consequently, the BTC/USD pair fell as investors sold off their cryptocurrencies following the collapse of one of the biggest players in the industry.

These challenges have intersected with fears that the Federal Reserve will continue to raise interest rates in the months ahead. It has already raised interest rates by 400 basis points this year and hinted that it will continue to do so in the near term.

Therefore, the coin will likely react to the latest US Consumer Price Index (CPI). Economists expect inflation to have remained well above the Fed’s 2.0% target in October.

BTC/USD forecast

The daily chart shows that the BTC/USD pair has fallen sharply this week. It managed to break below the important support at 17,626, which was the lowest level this year. It has struggled to drop below that level several times this year. The pair also fell below 16,000.

Bitcoin broke below the 25-day and 50-day moving average and the Ichimoku cloud. Therefore, the pair will likely continue to decline as confidence in the industry weakens. If that happens, the next key support to watch will be at 14,000.

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