Bitcoin, Ethereum & co.: Is the sell-off really over? 2023 could change everything

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By Marco Oehrl

AiVIF.com - Cryptocurrencies such as Bitcoin and Ethereum have still failed to make any significant recovery from the FTX debacle. Trading continues near cycle lows amid doomsday scenarios that see BTC/USD plummeting to below $10,000 in the next year.

However, former BitMEX CEO Arthur Hayes is convinced that the existing cycle lows represent a bottom. He argues that the selling wave has already peaked, as all crypto companies that were threatened by the specter of bankruptcy have now gone bankrupt.

As part of the accompanying liquidity crisis, these companies were forced to sell off their most liquid assets, which of course included Bitcoin. Meanwhile, these companies are at a stage where they can no longer sell BTC before they disappear from the market for good:

"When you look at the balance sheet of any of these of the heroes, there's no Bitcoin on it because what do they do, they sold the Bitcoin as they were going bankrupt, they sold the Bitcoin during the wave before they went bankrupt.

I believe the US Treasury market will become dysfunctional at some point in 2023 due to the Fed’s tightening monetary policies… At that point, I expect the Fed will turn the printer bank on, and then boom shaka-laka — Bitcoin and all other risk assets will spike higher."

Hayes is not alone in his opinion. Investor Cathie Wood believes FTX's demise will help the DeFi sector experience accelerated growth. This is because, in a transparent and decentralized business environment, dubious dealings are impossible:

"I think what we’re learning because of FTX is how much more important fully transparent decentralized networks will be to financial services going forward… FTX, Celsius, 3AC were all closed networks. Opaque systems. You couldn’t see what was going on…"

From her perspective, that's why Sam Bankman-Fried preferred to give Bitcoin a wide berth. Too transparent, too decentralized, and therefore impossible to control.

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Bitcoin technical price markers

Bitcoin is currently losing -1.60% at a BTC/USD rate of $16,908, while the weekly loss is -2.33%.

The cryptocurrency managed to hold above the support of the 23.6% Fibo retracement of $16,986 for three consecutive days. Currently, however, trading is taking place below it and the December 7 low at $16,715 can be tested.

A daily close below this level would shift focus to the November 28 low, which is found at $16,013. Below that, subsequent losses toward the cycle low of $15,504 would be possible.

Only if it manages to sustainably hold above the 23.6% Fibo retracements, the probability of a recovery towards the 38.2% Fibo retracement of $17,841 increases. This resistance is reinforced by the psychological mark of $18,000 and the 55-day MA, which runs at $18,023.

(Translated from German)