Is Bitcoin dropping to $12k? How long will the declines last?

Bitcoin (BTC)

After the first half of November this year, Due to the panic sale caused by the collapse of FTX, the third largest cryptocurrency exchange in the world, Bitcoin has stabilized in the last few days in the range between $16,000 and $17,000. However, there are many indications that this is only a form of correction, after which the quotations of the oldest virtual currencies could return downward.

One must remember that the BTC exchange rate has been in a downward trend for over a year, and this trend has stayed the same at any time. Therefore, from a purely technical point of view, there is no reason to forecast a more significant rebound.

In addition, it is also worth noting that the last fall was highly dynamic, which may indicate that it was an impulsive move. At the same time, the rebound observed for several days is exceptionally calm, which suggests that it is only a form of another correction.

Given all this, the bankruptcy of FTX has already been officially announced. As a result, its further negative impact on the cryptocurrency market may be limited; the scale of bankruptcies of subsequent companies associated with this exchange will be of crucial importance.

There is already talk that the BlockFi cryptocurrency lending platform is preparing for potential bankruptcy after the collapse of FTX, and there may even be over 150 similar companies.

So it is far too early to open the champagne and announce another bull market. In practice, there is still a high probability of further sales of BTC and the vast majority of cryptocurrency projects.

According to the popular opinion that "after every storm, the sun comes out", and just like in previous years, when after each of the previous bubble bursts, the cryptocurrency market returned to the path of growth, breaking new ATH, one can expect that this time it will be similar. However, we'll have to wait a little longer for that.

Several factors may account for this:

First, every topic, including every problem, becomes commonplace, and the financial markets pass over it daily. This was the case with the collapse of Mt.Gox in 2014 (the largest cryptocurrency exchange in the world at that time) or QuadrigaCX in 2019 (the largest cryptocurrency exchange in Canada, about which Netflix even made a documentary).

Second, the Federal Reserve is nearing the end of its monetary policy tightening cycle. While Fed interest rates are likely to remain high for most or even all of 2023, in 2024, the Fed is likely to embark on an easing cycle that, like in 2020, could contribute to the growth rally on risky assets such as stocks or cryptocurrencies.

Ethereum (ETH)

Ethereum's quotations fell between November 4 and 9 by over 36%, and then, driven by a highly optimistic report on CPI inflation in the US, they rebounded by almost 26%, thus leading to a re-test of the previously defeated support.

However, this increase lasted only one day, from November 11 this year. The ETH rate is falling again. If this trend continues - and there are many indications that it does - the price of this cryptocurrency could fall to around USD 1,000 in the near future. Only there is another valuable support in the vicinity of which a more significant demand response could appear.

Bitcoin Cash (BCH)

Bitcoin Cash fell by nearly 31% between November 5 and November 9, falling to the lowest level since December 2018. Similarly to BTC and ETH, in reaction to the US CPI inflation report published on November 10, it went up by over 22%.

It is noteworthy that this rally led to a re-test of the previously broken support (now resistance) of $106 and measured a 50% Fibonacci correction from the earlier downward impulse, where the BCH rate has been holding until now.

However, considering the supply reactions that have appeared in the area of ​​the currently tested resistance, it seems highly likely that this zone will be rejected soon, which in turn could initiate another downward impulse towards the recent lows or even lower.

Litecoin (LTC)

Litecoin's quotations collapsed between November 7 and 9 this year by more than 35%. This sell-off stopped only in  ​​technical support, around USD 50, where apparent demand pressure appeared on November 10.

As a result of subsequent increases, the LTC exchange rate returned to the area of ​​previously defeated support (now resistance) around USD 64.50, where supply pressure reappeared last Sunday. If this resistance is rejected, the price of this cryptocurrency could fall back to around USD 50 or even fall to USD 43.

Polygon (MATIC)

After bouncing off the $1.30 technical resistance, the Polygon (MATIC) cryptocurrency fell more than 41% between November 5 and November 9. Although on November 10, the cryptocurrency made up for it. While the majority of these losses increased by over 52%, today, it is again listed at the levels from November 9.

It is noteworthy that the MATIC exchange rate slipped below the local uptrend line last Sunday, which could drive further sell-off towards USD 0.70, USD 0.61 or USD 0.45.

XRP

XRP fell between November 5 and November 9 by more than 38%. This sell-off led to the breaking of two horizontal support levels at USD 0.4450 and USD 0.3950, respectively, and stopped only at the next significant level, around USD 0.32, where an apparent demand reaction appeared on November 10.

Since then, the XRP price has alternately fallen and increased, staying at USD 0.32 to USD 0.3950.

Therefore, taking into account its rebound from the upper limit of this range, observed last Sunday, we could expect another drop towards USD 0.32 in the coming days or possibly even to USD 0.30, where the next support level is located.

Binance Coin (BNB)

Looking at the Binance Coin quotes, we will notice that the price of this cryptocurrency has fallen by almost 36% since November 8. Such a significant depreciation meant that we are currently witnessing an attempt to break the technical support of USD 260. If the BNB rate permanently drops below this level, we could expect it to depreciate towards USD 244 or even USD 214 soon.

Go Back

Weekly Crypto Market Analysis

Crypto Derivatives Exchange
Get started