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3 Key Crypto Price events to watch in the wake of the FTX and Alameda Debacle

3 Key Crypto Price events to watch in the wake of the FTX and Alameda Debacle – The record-low volatility that Bitcoin (BTC) had been displaying up until the beginning of this week allowed altcoins the room they needed to paint some attractive technical setups. This volatility was demonstrated by Bitcoin (BTC).

At the same time, on-chain statistics and technical analysis were beginning to imply that Bitcoin was halfway through carving out a bottom, and many analysts anticipated that better days were ahead of the cryptocurrency market.

A quick jump ahead in time reveals that the surge in market volatility that was experienced was in fact a “black swan” occurrence.

You are aware that FTX is dead at this point.

There is no hope for Alameda Research.

BlockFi has halted withdrawals, claiming that it is unable to “operate as usual.” As a result, the company is “pausing client withdrawals as allowed under our Terms,” which leads one to believe that the business itself has come to an end.

The infection is rapidly spreading, and the shrapnel from this Krakatoa-level disaster is certain to reverberate across the entirety of the cryptocurrency ecosystem.

At this time, it is difficult to make a confident short-term investment thesis for assets by simply looking at the chart. The best thing that uncertain investors can do is either stick to a plan that has been proven effective in the past or do nothing at all.

The most likely consequence in the immediate term is that volatility will stay high, and the values of cryptocurrencies will continue to fluctuate erratically for some time.

Although no one enjoys dwelling on the potential adverse outcomes that may be in store for the crypto industry and cryptocurrency prices in the near future, it is the duty of every investor to give serious consideration to the possibility of the most catastrophic outcomes and to have a backup plan ready to implement.

In this way, you won’t get into a panic when things start to really go wrong.

The following are a few things that you should be on the lookout for in the days ahead.

USDT/USD vs. USDC/USD

Stablecoins can occasionally detach themselves from their dollar anchor when market conditions are extremely volatile. Stablecoin prices can sometimes rise above $1.00 as traders seek refuge in assets fixed to the dollar in the event that there is widespread fear, uncertainty, and doubt (FUD) that Bitcoin will be banned, hacked, or die.

Sometimes, when crypto black swan events occur, Tether (USDT) is unable to maintain its dollar peg. It has occurred in the past on a number of occasions, and once the dust settles, it has typically returned to its normal 1:1 peg.

According to the data provided by TradingView and Coinbase, the USDT/USD pair broke below its dollar peg on November 9, reaching a low of $0.97 at one point during the day. While the value of USDT fell below its peg, the value of USD Coin (USDC) skyrocketed to $1.01.

USDT/USD peg. Source: TradingView

Twitter is a good place to look for unsubstantiated rumours about Tether and Alameda Research. We won’t go into the unconfirmed reasons why there was a dislocation between the two, but you should have no trouble finding the rumours there.

Because panic can be easily caused by false information, rumors, and lies, the fact that the rumours about Alameda/Tether are completely false does not make a difference in this situation. This is an important point to keep in mind.

If it becomes widely known on social media and frightens investors, those investors will take action, which in this case means that many of them will or are already in the process of exchanging their USDT for USDC, Bitcoin, or one of the other stablecoins.

During the implosion of both Terra and Celsius, behaviour that was comparable was seen. According to statistics compiled by TradingView and KuCoin, on May 12, the price of USDC rocketed up to $1.06–$1.19 from its previous level of $1.00. On the same day, the value of USDT saw a temporary decrease to $0.98 and then again to $0.94.

USDC/USD peg. Source: TradingView

When the price is all over the place and there are spreads between exchanges, converting stablecoins becomes expensive, and the process of exchanging one cryptocurrency for another or switching from an alternative cryptocurrency to a stablecoin can be frustrating.

The dollar peg between USDT and USDC is something that should be monitored closely.

Bitcoin price expectations

The significant price drop that occurred on November 8 finally broke Bitcoin’s price range of the previous 146 days, which saw the price move between $18,600 and $24,500.

BTC/USDT 1-day chart. Source: TradingView

This is a significant range break, and from the standpoint of technical analysis, if the price is unable to recapture this range and there is increased selling, the price could slice through the volume profile gap and find support in the range of $11,000–$12,000. [This] is a significant range break.

Even if it’s unpleasant, that’s just the way things are right now.

At the very least, the price will be back in its previous range, which is something to look forward to, and this would be a positive sign. If Bitcoin is successful in reclaiming and maintaining the $18,000 handle, this would be a positive sign.

A quick look at the chart for Ether (ETH) reveals a situation that is very similar, in which the price of Ether fell out of its 148-day range of stability between $2,000 and $1,250, but it has already reclaimed the previous range.

ETH/USDT 1-day chart. Source: TradingView

Bearish traders have a downside goal in the area of $700, but it’s fascinating to note how the price has rallied to trade back around $1,250. Bearish traders have a downside target in the range of $700.

The market is looking for a foundation that is more stable

Because of their exposure to FTX and Alameda research, a significant number of crypto-focused businesses and investment groups currently have some gaps in their own balance sheets.

A small number of these local crypto firms also hold considerable quantities of a variety of alternative cryptocurrencies and decentralised finance (DeFi) tokens. It is possible that a number of these BTC, altcoin, and DeFi token stashes will find their way to being market sold on spot exchanges in order to recoup the current losses, make good on their own loans, and meet their obligations to their customers. This would allow them to meet their obligations to their customers.

Alternate cryptocurrencies have already suffered significant losses, and some of them are quite illiquid. This means that a sudden rise in the number of people selling them might exert tremendous downward pressure on the price.

Before investing in what appear to be once-in-a-lifetime dips and cycle bottoms, investors should do some research and take a closer look at who some of the majority holders of the token or project are. They should also keep in mind that the effects of FTX’s multibillion-dollar implosion have not yet been fully felt throughout the industry.

Before making any kind of investment in cryptocurrencies, you should do your homework and conduct some kind of investigation beforehand.

Big Smokey, writer of “The Humble Pontificator Substack” and resident newsletter author at Cointelegraph, is the author of this particular newsletter. Every Friday, Big Smokey will publish articles on the market that include market insights, trending how-tos, analyses, and early-bird research on potential emerging trends in the cryptocurrency market.

The author is the only person responsible for the views and opinions presented in this article; they do not necessarily represent the viewpoints of Cointelegraph.com. You should always do your own research before making a choice, since there is an element of risk involved in any investment or trading action.

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