Crypto Frontline

BTCUSD (Coinbase)

A new strong wave of selling unraveled over the past week, driven mainly by the bankruptcy of FTX, the 3^rd largest crypto exchange in the world. Tokens have been dumped at fire sale prices and Bitcoin was one of the collateral victims. The price broke below the September low and managed to find a short-term bottom around $15,500.

News around FTX can still move the market next week, given customers have billions in USD trapped. Analysts believe a significant loss of confidence occurred, which might explain why buyers are not willing to jump in, even if valuations are now even more attractive.

In terms of the technical levels to watch, $17,500 -$18-200 has become a key resistance zone, so the sentiment is bearish while below it. We suspect buyers can cap the downside if the price reaches $15,000, but traders should watch how the market unfolds around that level.

If BTC breaks above the resistance zone, it must do the same with the daily 20 EMA. We will shift to a bullish stance only after the market recoups all the losses generated during last week and breaks above $21,500. That seems like a distant target, at least for now.

ETHUSD (Kraken)

The daily 200 SMA turned out to be a major resistance for Ether and that’s where the impulsive leg started to unfold. ETH broke back inside and even below the range we’ve talked about for weeks, but managed to stabilize around $1,100.

Volatility has been compressing for the last three consecutive days, as market participants await more clues. In case selling resumes next week and the price breaks below $1,100, the key $1,000 will be up for grabs. We expect stronger bids there, given we are close to the holiday season and markets tend to be calm.

Even if the price breaks above the daily 20 EMA, that should not be regarded as a change in the overall trend. While below the 200 SMA, ETH is still in bearish territory. The FTX bankruptcy has shown that even large crypto companies are vulnerable during a downturn, so those awaiting a new bull run might want to reduce exposure.

AVAXUSD (Binance)

Avalanche lost 40% during the selloff and also broke below the June lows. Before this week, buyers were optimistic, since the price has been trading above the daily 20 EMA for multiple days in a row.

Despite that positive shift, once the liquidation kicked in, nothing could stop the drop. As we move forward, buyers should watch for further clues around $12 and $9.5, if the selling continues. An overshoot lower should not be excluded, especially if AVAX holders will have new reasons to sell.

Breaking back above $14 should be regarded as a small sign of relief and only then buyers can further build momentum. A change of hands can only occur if we get back up to $20. That would erase the recent losses and put buyers in a more favorable position.