Crypto Roulette Up or Down
2022.12.13 02:03
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Crypto Roulette Up or Down
Budrigannews.com – Since escaping the chaos of the FTX collapse, plucky bitcoin has been holding steady and gaining strength to reach $30,000 in 2023.
Since being crushed by the FTX collapse, battered bitcoin has been unresponsive, taking a long, ragged breath before plunging toward $5,000.
In the eerie aftermath of the FTX-induced market mini-crash in November, the world’s dominant cryptocurrency has certainly been uncharacteristically muted over the past two weeks, hovering around $15,770 and $17,350.
“The question that needs to be asked of us right now is: Do sellers still exist in this market? According to Jacob Sansbury, co-founder of Pluto, “No, to my mind, there aren’t that many left,”
Sansbury is of the opinion that the majority of over-leveraged miners, who typically hold substantial bitcoin holdings, have exited positions in order to repay debts borrowed in conventional currency to fund their equipment and operations.
Indeed, the fact that there are fewer coins available for sale could be to blame for bitcoin’s recent calm: According to Coinglass data, the amount held on exchanges for trading is now 1.97 million, down significantly from 2.33 million at the beginning of the year.
Already, significant offloading has taken place; According to Glassnode data, investors were forced to exit long-term positions in November, resulting in a realized loss of $10.16 billion over seven days—the fourth-largest loss ever recorded by this measure.
The cryptocurrency is expected to experience its first annual loss since 2018 and has already lost more than 60% in 2022.
According to on-chain data, many remaining investors are storing their bitcoin offline in “cold storage,” which should raise the floor price to around $16,000, according to Sologenic co-founder Bob Ras.
He continued, “It’s hard to imagine BTC going significantly lower, barring any more surprises in the market.”
Ras believes that the price of bitcoin would be close to $25,000 right now if it weren’t for the well-publicized collapses of crypto players FTX, Celsius, and this year.
But this is cryptocurrency, and there are a number of potential selling triggers in the future, so there may be additional surprises.
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The first possible danger is the possibility that more bitcoin miners will have to sell their holdings in order to stay afloat as mining becomes more expensive.
“Excavators as a gathering begin to become unrewarding under $20,000, so we’re beneath (that) point,” noted Ben McMillan, boss speculation official at IDX Computerized Resources.
Since November, CrytpoQuant’s miner reserve indicator, which measures the amount of bitcoin in miners’ wallets, has decreased by approximately 7,722 bitcoin.
Market participants also raised concerns regarding the Grayscale Trust, the largest bitcoin fund in the world with assets of $10.9 billion. On November 22, the CEO of parent company Digital Currency Group informed shareholders that Genesis Trading’s crypto lending arm owes $575 million to Genesis.
According to data from Coinglass, shares of Grayscale Bitcoin Trust have not traded at a premium since March 2021, and the discount to its net asset value is at an all-time low of 48%.
Grayscale maintained that all was normal and that its underlying assets were unaffected, while DCG stated last month that Genesis’ lending business issues had no effect on DCG or its subsidiaries.
“This could be the other shoe to drop,” said McMillan, alluding to the chance of Grayscale running into monetary difficulty. ” All things considered, if bitcoin can hold the $15,000 line through the DCG exercise, that would be areas of strength for a going into 2023.
Crypto watchers asserted that the Federal Reserve’s final meeting of the year on Wednesday could further undermine risk appetite and bitcoin’s prospects.
VanEck and Standard Chartered (OTC:) raised the long-shot possibility that bitcoin could reach $30,000 or $5,000 in 2023. respectively.
Regarding the technicals, a number of analysts cited indicators indicating that bitcoin may have found support between $16,000 and $16,800.
Eddie Tofpik, head of technical analysis at ADM Investor Services, warned that any long-term rally would likely be difficult and that the cryptocurrency could also encounter resistance around the $17,490 level.
He stated, “Whenever we see a rally, it’s one step up, then two or three steps down.”
In light of the turmoil that occurred in November, Arcane Research analyst Vetle Lunde suggested that long-term wagers might be appealing.
However, there is a lot of uncertainty.
Lunde continued, “Be aware that massive drawdowns typically are followed by a long-lasting directionless market filled with apathy and incomprehensible second-guessing.”
