Elon Musk Says BTC Will ‘Make It’ – 5 Things to Know About Bitcoin This Week


Bitcoin (BTC) is starting the week on shaky ground after its lowest weekly close in two years.

The largest cryptocurrency, which has weakened significantly since the FTX exchange implosion last week, continues to struggle with the downside.

In an increasingly volatile market, investors are unsure what to expect next as more firms sound the alarm about solvency and regulators step up scrutiny of the cryptocurrency space.

The mood among most is quite fearful, and even some of the industry’s best-known names are warning that the events of the past week have set them back several years.

Meanwhile, it’s business as usual for Bitcoin. FTX isn’t the first such setback it’s gone through, and under the hood the network remains as solid as ever.

Cointelegraph takes a look at the factors that will affect the price of BTC in the coming days as the average hodler struggles with large losses and continued volatility.

Cryptocurrencies for fresh FTX drop

While little is certain in the current cryptocurrency market environment, it is safe to say that FTX and its implications are now the number one source of Bitcoin price volatility.

The weekly chart says it all – a $5,500 “red” candle in the seven days from Nov. 13 to the lowest weekly close since mid-November 2020, data from Cointelegraph Markets Pro and TradingView shows.

BTC/USD 1-week candlestick chart (Bitstamp). Source: TradingView

At the time of writing, BTC/USD is still recently at $16,300, re-emerging as a relief bounce after the pair reached a total of $15,780 overnight on Bitstamp.

BTC/USD 1 hour candlestick chart (Bitstamp). Source: TradingView

The story is far from over when it comes to FTX, as listed firms and related entities are struggling.

So, commentators predict that there could be repeat performances in the coming days and weeks as knock-on effects drive more and more crypto names out of business.

Exchanges are particularly under the radar, with Crypto.com, KuCoin and others becoming sources of liquidity concerns.

That day, it caused a spike in withdrawal transactions on Crypto.com and Gate.io. warnings it could be the latest stock market to see a “bank run” as investors try to get their funds under control.

Data from on-chain analytics firm CryptoQuant showed that 1,500 BTC left Gate.io on November 13, and is currently at around 800 BTC and rising on November 14.

Bitcoin outputs (Gate.io) chart. Source: CryptoQuant

More broadly, the data showed exchange BTC reserves at an estimated 2.09 million BTC, which CryptoQuant notes may not reflect the true state of affairs due to confusion.

The last time stocks were this low was in early 2018.

Bitcoin currency reserves chart. Source: CryptoQuant

Bitcoin rises above $15,700 as Musk believes in BTC

With the ongoing uncertainty, making BTC price predictions is not an easy task.

Referring to the moving average converging divergence (MACD), analyst Matthew Hyland warned that the BTC/USD 3-day chart is about to repeat the bearish structure that caused losses both times it appeared in 2022.

“The Bitcoin 3-Day MACD will cross the Moon tomorrow for the first time since April,” he said. he wrote:

“If BTC can get positive price action before the 3-day close, this can be avoided. Last year, two previous transitions resulted in even lower prices.

BTC/USD chart. Source: Matthew Hyland/ Twitter

Hyland notwithstanding noted 2014 Mt. After the Gox hack, he said it took almost a year for bitcoin to find a macro price bottom after the initial shock.

“It hasn’t been 11 days since FTX was closed,” he said.

Fellow crypto analyst Il Capo, meanwhile, argued that the market is ready for a “final capitulation” sooner rather than later.

This, he said in a series of tweets, would send the market to new lows, first a “bull trap” and then an outright rejection.

For altcoins, he said the decline would be “on average 40-50%”.

In shorter timeframes, popular trader Crypto Tony feared that even the lowest weekly close in two years might not provide support.

“Nice bounce, but if we can’t hold the swing at $16,400, it was just a false exit and we expect a test lower,” he said. commented About the recovery from the intraday low of $15,780.

The move came with the tacit support of Twitter CEO Elon Musk.

“BTC will make it, but it could be a long winter,” he said he wrote day in a Twitter discussion.

Twitter discussion (screenshot). Source: Twitter

Another short-term price catalyst came in the form of the largest exchange Binance, which opted to create a special recovery fund to protect businesses.

A quiet macro week focuses on equity correlation

The picture outside of cryptocurrency further underscores the extent to which FTX marks a “black swan” event for the industry.

While Bitcoin and altcoins were busy losing more than 25% on the day, US stock markets recovered from losses earlier in the month.

Thus, as research firm Santiment points out, there is a clear distinction between Bitcoin and risk assets, which helps break the correlation that has persisted over the past year.

“As the trading week closes, the story of the week is a distinct separation between crypto (following FTX’s fall from grace) and equities,” he said. summarized in a tweet last week:

“If $BTC traders’ confidence recovers after the unfortunate events, there is a bullish divergence with the SP500.”

BTC, ETH vs stocks, gold correlation annotated chart. Source: Sentiment/ Twitter

Market commentator Holger Zschaepitz further noted that the gap in Bitcoin’s performance against the Nasdaq has widened.

“A cliff in bitcoin’s weekly performance, the biggest gainer on the Nasdaq since 2020. Cryptospace shrinks to the equivalent of 1% of global stocks,” part of the new comments to read on the day

This declining correlation could come at a macro-beneficial time, as the strength of the US dollar makes for some erratic moves of its own.

The U.S. dollar index (DXY), which attempted to break above 107, failed before the Nov. 14 Wall Street open, prompting riskier assets to rally.

However, any reversal towards recent highs and the picture can quickly look very different.

Intraday DXY lows, however, saw the index return to support untested since mid-August.

US Dollar Index (DXY) 1-day candlestick chart. Source: TradingView

However, popular trading outfit Stockmoney Lizards, which comments on longer-term performance, said that the DXY has broken the parabolic curve since 2021.

“Correction will be good for Bitcoin,” some Twitter comments he added.

US dollar index (DXY) interpretive chart. Source: Stockmoney Lizards/ Twitter

As miners’ sales slow, “buy the dip” fever ensues

While many of the current hodlers are trying to pull coins out of exchanges or figure out how to cure losses, not everyone is sitting still.

On-chain data shows that when BTC/USD hit multi-year lows last week, both large and small investors jumped at the opportunity to “buy the dip”.

According to on-chain analytics firm Glassnode, wallets between 1 and 10 BTC have seen a dramatic increase.

Bitcoin addresses 1-10 BTC with chart. Source: Glassnode

This trend is also evident among Bitcoin’s largest cohort of hodlers, the “mega whales.” Those institutions with wallet balances of 10,000 BTC or more are also growing, and now number around 130, Glassnode shows.

“Whales are gathering at an unprecedented rate,” noted social media commentator Crypto Rover reacted.

Bitcoin addresses chart 10,000 BTC or more. Source: Glassnode

A group that is not currently in collection mode is miners. After a sharp drop in reserves last week, BTC is still trending lower, driven by miners tracked by CryptoQuant.

From 1,858,271 BTC on November 8th, miners’ reserves are now only 1,853,606 BTC as of writing on November 14th.

Nevertheless, reserves remain higher than at the beginning of 2022, and recent sales represent an insignificant part of the miners’ overall position.

Bitcoin miner reserves chart. Source: CryptoQuant

The sentiment data offers some hope

As expected, the overall mood of the cryptocurrency market took a big hit thanks to FTX – but is it really that bad?

Related: $3 billion worth of Bitcoin exits exchanges this week amid FTX contagion fears

According to the Crypto Fear & Greed Index, the industry can actually take most of the bad news in its stride.

Over the weekend, the Index’s score hit a local low of 20/100, which characterized market sentiment as “extremely fearful.”

That’s a 50% drop from the 40/100 peak seen on November 6, marking a three-month bullish streak.

Despite this, 2022 saw even lower scores, with Fear and Greed reaching just 6/100 for the year.

If it falls further, even a fresh 50% drop from current levels will only touch the macro price bottom area for BTC/USD – around 10/100.

Crypto Fear and Greed Index (screenshot). Source: Alternative.me

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