By Marco Oehrl
It was the tightening of the Fed monetary policy that caused stocks and cryptos to fall in equal measure. However, cryptocurrencies were hit particularly hard, with the terra collapse threatening entire ecosystems back in May. At that point, it was assumed that things could not get any worse.
But the great savior, Sam Bankman-Fried, who supported troubled projects with sums in the triple-digit millions, made a few mistakes himself while juggling billions. Mistakes that caused his own empire to implode and permanently undermined confidence in the crypto industry. His multi-billion dollar ventures also involved some institutional investors who now have to write off their holdings.
Even Bitcoin advocates like Galaxy Digital CEO Mike Novogratz have now been forced to scale back their expectations for the future of this market.
Less than six months ago, Novogratz expected bitcoin to reach the magic $500,000 mark within the next five years. Even the terra collapse couldn't dissuade him from sticking to that price target.
But FTX has changed everything, so as things stand today, he's backing away from that forecast. He still trusts BTC to reach $500,000, but not in the next five years.
Mobius Capital Partners founder Mark Mobius sees hard times ahead for bitcoin. While reports of a possible bottom are piling up, he thinks it's likely that BTC will test $10,000 in 2023.
That's because holding cryptocurrencies has become less attractive with the demise of FTX. In times of low central bank interest rates, crypto yield projects that promised returns of 5% or more for holding cryptos flourished. However, that ecosystem was based in significant part on FTX and now appears doomed, Mobius said:
"Of course there have been a number of offerings of 5% or higher interest rates for crypto deposits but many of those companies offering such rates have gone bust partly as a result of FTX.
So as those losses mount people become scared of holding the crypto coin in order to earn interest."
Bitcoin technical price markers
Bitcoin is currently falling -0.77% at a BTC/USD price of $16,953, while the weekly gain is 3.01%.
The cryptocurrency failed to confirm the November 30 rise above the 23.6% Fibo retracements, as yesterday saw a daily close just below $16,986. Thus, the market seems poised for further losses, which means that a test of the November 21 low at $15,504 is to be expected.
Only if there is a sustained rise above the 23.6% Fibo retracements can the 38.2% Fibo retracement of $17,841, the 55-day MA of $18,424, and the 50% Fibo retracement of $18,533 be targeted.
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