Bitcoin price is trending downward and appears on track to retest its yearly lows at $15,550. The nascent asset class is facing the fallout from the collapse of the FTX. Once the world’s second largest crypto trading platform, the company has filed for bankruptcy protection.
At the time of writing, the price of Bitcoin is under tremendous selling pressure. The cryptocurrency is trading at $15,900 with losses of 4% and 2% in low and high time frames. BTC is more stable than other assets in the crypto top 10 by market capitalization.
In contrast, Ethereum (ETH) posted a 10% loss in the prior week, while Cardano (ADA) and Dogecoin (DOGE) posted losses of 9% and 14%, respectively, over the same period. Other cryptocurrencies are following this trend except XRP, which is still holding some gains.
Low Volume Week could be an obstacle for Bitcoin price
Overall sentiment in the market appears to be geared towards another flash crash. However, the US market could become less active in the coming days.
The country kicks off its Christmas-related holidays this week when the citizen celebrates Thanksgiving Day. Thus, the market may see low trading volumes.
According to an analyst of Material Indicators, the long holiday week could exacerbate losses in the Bitcoin price and the crypto market, especially in these days of heavy pessimistic sentiment and negative news in the nascent asset class:
Please note, it is a holiday week in the US so volume may be light. Might see some fourth quarter tax losses harvested in TradFi adding to the downside momentum in Crypto fueled by FTXscam contagion related FUD.
The analyst shared the image below and showed the order book of crypto exchange Binance. On this trading platform, the bid (buy) side appears thicker.
At the time of writing and on higher time frames, many more buy orders could act as support for Bitcoin price. In this sense, Material Indicators and others believe that the crypto market is headed for sideways price action.
This theory can be debunked if there is new negative news related to the collapse of FTX or the contagion devastating the entire industry. According to rumors circulating on social media platforms, there is a high risk of a major crypto company going out of business in the coming days.
The macroeconomic landscape is improving and US inflation is finally peaking. According to Macro analyst Jurrien Timmer of Fidelity, this inflation spike will have a positive impact on the markets. The crypto market could recover if the bulls can defend its current range and previous yearly lows.
Eye to 2023: If inflation has peaked for this cycle (based on rates of change), we should reach a “Peak Fed” of around 5% in the next quarter or two. After a relentless shift of the monetary goalposts this year, that should at least provide some clarity. pic.twitter.com/rGaZRNfaQK
— Jurrien Timmer (@TimmerFidelity) November 21, 2022
