What’s Driving Bitcoin?
- Binance signs a letter of intent to acquire FTX.com
- Bitcoin (BTC/USD) falls to fresh two-year low as liquidity concerns fuel volatility
- Volume surges as the crypto market cap falls below $1 Trillion
Mayhem in cryptocurrency intensifies fears over a liquidity crunch while a potential Binance, FTX deal looms
Cryptocurrency is back in the headlines after Binance CEO, and founder Changpeng “CZ” Zhao signed a letter of intent to acquire former rival FTX.com.
With a resurgence in volatility and intensifying fears of a liquidity crunch driving Bitcoin lower, BTC/USD fell to a low of $17,144 before finding temporary support above $18,000.
Over the past week, crypto hedge fund Alameda Research and sister company FTX have come under scrutiny after a recent publication by CoinDesk raise concerns over the firms balance sheet. As Sam Bankman-Fried heads up both the exchange and the hedge fund, the FTT token (the native token of FTX) has proven to be essential for both.
Source: CoinDesk – 02 November 2022
Four days after the revelations, Binance CEO Zhao announced his intentions to liquidate its remaining FTT exposure, triggering a liquidly meltdown which has driven FTX to the brink of collapse.
For the full story read: Bitcoin (BTC) Slumps as FTX and Binance Spat Hits Market Sentiment
With fears sending jitters through the crypto markets, another tweet confirming Binance’s intention to acquire FTX.com helped temporality ease the downward move. But with a non-binding agreement adding to uncertainty, digital assets may be in for a rocky ride.
Bitcoin Technical Analysis
After rebounding from the June 2022 low, BTC/USD has been trading sideways between a broader range of $18000 and $25000. With rumors of China’s reopening driving BTC higher last week, a shift in sentiment and rising volatility allowed bears to drive Bitcoin to a fresh 2022 low of $17,114.
As bearish momentum gains traction, Bitcoin is currently trading over 15% lower for the week. With price action hovering around the June low of $17,592, a retest of the recent low ($17,114) and below $17,000 could see the 23 Nov 2020 low providing support at $16,218.
Bitcoin (BTC/USD) Daily Chart
Chart prepared by Tammy Da Costa using TradingView
--- Written by Tammy Da Costa, Analyst for DailyFX.com
Contact and follow Tammy on Twitter: @Tams707
