Bitcoin Drops Below $17,000, Cryptocurrencies Fall in Reaction to FTX Failure

Bitcoin Drops Below $17,000, Cryptocurrencies Fall in Reaction to FTX Failure

Bitcoin (BTC), ether (ETH) and cryptocurrency-related stocks like MicroStrategy have seen sharp declines after FTX announced it was filing for bankruptcy and stepping down as CEO of Sam Bankman-Fried.

Comparison of Bitcoin, Ether and MicroStrategy. Source: Trade View

Drop into cryptocurrency related stocks

MicroStrategy stock, led by outspoken bitcoin advocate Michael Saylor, is down 32.57% as of November 11 over a five-day period. MicroStrategy holds about 130,000 BTC, so its stock price is highly correlated with BTC/USD. Meanwhile, the high-tech Nasdaq gained 0.79%.

Mining stocks also posted losses on November 11, with the Hashrate Index cryptocurrency mining stocks posting a loss of 0.14% at the time of writing. The market performance of the top miners is much weaker, with Marathon down 4.95%, Riot down 5.74%, and Hive down 16.08%.

The performance of mining stocks ranked by market cap. Source: Hashrate Index

Meanwhile, the price of ETH fell by 22% last week, despite Ether turning deflationary for the first time since the Merger. More than 8,000 ETH have been burned in the past seven days, bringing the annual rate to -0.354%.

7-day Ether supply statistics. Source: Ultra Sound Money

In addition to the FTX debacle that has hampered the price of Ether, there has been a huge amount of futures liquidation after the price hit its lowest level since the beginning of the month at $1,070 this week.

Bitcoin price falls below June low

Data from Cointelegraph Markets Pro shows that bitcoin has also lost 20% of its value in the past week. In addition, bitcoin hit an annual low of $15,742 due to the fall of FTX.

Bitcoin price index. Source: Cointelegraph

Additionally, the crash in bitcoin price is causing miners to sell at an accelerated pace, further increasing the downward pressure.

According to Charles Edwards, founder of the Capriole Fund, bitcoin miners hit the red level on the open source miner selling pressure chart, which represents the biggest selloff in nearly five years.

Bitcoin miners are hurting and selling more than they have in almost 5 years! Presentation: The selling pressure of bitcoin miners. A free and open source indicator that tracks on-chain data to highlight times when bitcoin miners are selling more of their reserves than usual. — Charles Edwards (@caprioleio) November 11, 2022.

The increase in miner sales coincided with a bitcoin whale moving 3,500 BTC for the first time since 2011.

Is BTC about to bottom out?

But analysts are divided on whether BTC has taken off. For example, the trader Mags sees two possibilities.

He has tweeted :

“Two possibilities: a) The bottom is already in place ($15,500) and we’re ahead of everyone waiting for $14,000. b) We see a deep retest and go well below $14,000, maybe $11,500 – $12,000”.

Other popular analysts, like John Wick, do not believe that the bottom line has been reached.

“I brought everybody up and said if that lower end of the bracket broke I’d be short again,” he said. “I also mentioned that I don’t think the bottom has been reached. I hope you made your orders ahead of time.”

#BTC I warned everyone and said that if the lower part of the support was broken I would be short again. I also mentioned that I didn’t think the low points were hit. I hope you have placed your orders in advance. Dots again coming on the move soon and they have every move predicted — John Wick (@ZeroHedge_) November 11, 2022.

The views and opinions expressed herein are solely those of the author and do not necessarily reflect those of All investment and business transactions involve risk. You should do your own research before making a decision.

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