"Didn't take advantage of the tailwind." Why bitcoin collapsed in price
The rate of bitcoin fell below $18 thousand, other cryptocurrencies were also affected. Analysts pointed out the reasons of market decline and told about its short-term prospects
In the evening of November 8, the bitcoin rate fell to a two-year low of $17.1 thousand. As of November 9 at 14:15, the first cryptocurrency is trading at $17.6 thousand, it has fallen in price by 10% over the past 24 hours.
Bitcoin's price decline accelerated as the rate of cryptocurrency exchange token FTX (FTT) plummeted almost sixfold, from $19 to $3. The altcoin now trades at $4.6 and shows a daily decline of 74%.
The collapse of FTT token and the overall situation around the crypto exchange FTX and caused the fall of the entire crypto market, explained a financial analyst BitRiver. First, the exchange FTX lost liquidity, the price of its own token began to collapse, after which Binance announced the purchase of the site.
"The FTX and Binance deal attracted regulators, raising antitrust concerns. Regulators have the power to block large mergers if they fear it will limit market choice, and there are strict laws against anti-competitive behavior."
Among other factors in the market's decline, 8848 Invest's lead analyst cited tensions between China and Taiwan. On November 8, Taiwanese President Tsai Ing-wen warned that the threat of Chinese invasion was real and it could happen soon.
"China is a pretty big player in the crypto market. Taiwan makes chips for mining. Therefore, this factor is important and pressures cryptocurrency prices down," Pershikov stressed.
Another reason, the expert called the elections to the U.S. Congress. At the moment, the Republicans are expected to win the elections to the House of Representatives (199 seats against 178 seats for the Democrats, it takes 218 to win), the vote counting continues.
"The crypto market is primarily sympathetic to the Democratic Party, at least in terms of the amount of investment in their campaign. Foreign representatives of the crypto industry are betting exactly on the Democrats," the analyst explained. He called the possible victory of the Republicans in the parliamentary elections a negative for the crypto market.
The crypto industry's problems have coincided with rising stock indices and a weakening dollar, the BitRiver financial analyst pointed out
"Buyers were unable to take advantage of the tailwind to pass the $22.5k level. While the dollar is under pressure and stock indices are set to rise, buyers have a chance to return the bitcoin price to $20k. Now we need to wait for volatility to decrease, and exchanges FTX and Binance to clarify the situation and further actions," Antonov stressed.
The current situation, which now presses the crypto market, may be the culmination of the decline. The expert called the current situation in the industry the initial stage of formation of the "bottom", because for many market participants such prices are of interest to increase the volume of purchases or, in principle, to enter this market.
"Now should form a set of factors that will be able to push the price up. Therefore now the L-shaped restoration, rather than a sharp trend reversal is more probable. If the situation with China and Taiwan does not worsen, hardly anything else can hurt the market more than it has already happened," - concluded the expert
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Author: soft4bro.com (09/11/2022)
