Cryptocurrencies rebound in face off news about FTX and Genesis 📈

4:12 PM November 23, 2022

Investors returned to the cryptocurrency market contributing to double-digit gains for some projects and giving hope for a renewed 'retest' of Bitcoin's resistance near $17,000:

  • Potentially bankrupt Genesis Capital, which operates in the cryptocurrency lending market, reassured the market yesterday, contrary to Bloomberg reports, indicating that it has no plans to declare bankruptcy at this time. The company likely still holds 175 million FTX exchange tolenes, which have fallen in value from nearly $80 to nearly $1.5 today. According to recent reports, Genesis Capital made loans to the bankrupt Alameda Research fund. The loans were to be 'collateralized' with FTX tokens, whose value is currently scouring the bottom;
  • Consulting firm Alvarez & Marsal, which advises FTX identified "significantly higher cash balances" than were initially known. The current FTX balance of $1.24 billion still represents a significant shortfall compared to the billions FTX owes its creditors. As of Saturday 19 November, FTX owed its largest 50 unsecured creditors $3.1 billion.

Bitcoin and Ethereum are trading higher today. Litecoin and Binanceoin, however, are the best performers, both gaining more than 10%. 

Start investing today or test a free demo

Open real account TRY DEMO Download mobile app Download mobile app

Long-term investors still losing their conviction?

The value of Bitcoin traded older than six months recently reached the highest value in the last 5 years. Nearly 130,000 BTC were issued on November 17, and the weekly average is still above 50,000 BTC per day. The on-chain data indicates significant stress on long-term investors which still poses a risk of capitulation since these investors hold the largest share of all available BTC on the market. Source: GlassnodeIn the face of the FTX bankruptcy, a total of 254,000 BTCs were sold that were more than 6 months old (nearly 1.3% of the total circulating supply of Bitcoin). The 30-day change shows that this is the steepest drop in the supply of older coins since the January 2021 bull market when long-term investors took advantage of the bull market to distribute Bitcoin at a profit. Source: GlassnodeThe Dormancy chart indicates the average 'age' of Bitcoin sold. The indicator shows that the average age of liquidated Bitcoin has increased and is now 44 days and signals a higher supply of long-term investors (blue chart). At the same time, the supply of 'dormant' Bitcoin, adjusted for internal reshuffling of on-chain wallets (red chart), has also increased and now stands at 78 days. The data confirms the supply-side reaction of investors with the statistically highest level of conviction to the collapse of the FTX exchange. Source: GlassnodeBinanceCoin chart, D1 interval. The Binance cryptocurrency exchange token has erased much of the losses caused by the drop in sentiment around the cryptocurrency market and is rising above the two key moving averages SMA50 (black line) and SMA200 (red line) signaling an attempted trend reversal. Following the collapse of FTX, the centralized exchange owned by Chanpeng Zhao accounts for about 64% of cryptocurrency trading and has become the main centralized player in the industry. Source: xStation5Bitcoin chart, H4 interval. The main cryptocurrency is trying to unwind the declines, on the chart we see a double hole formation near $15,500. The main resistance still runs around $17,000, which coincides with the 23.6 Fibonacci retracement and from where another downward impulse towards $14,000 could potentially be triggered. Source: xStation5

The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.

Share:
Back