KEY POINTS:
- Mark Newton of Fundstrat Global predicts that the price of Bitcoin may fall as low as $10,000.
- As Binance withdraws from the FTX contract, the price of bitcoin drops.
- Analysts anticipate high volatility as the US prepares to release CPI statistics.
Following the FTX fiasco, Mark Newton, Head of Technical Strategy at Fundstrat Global Advisors, predicts that Bitcoin (BTC) might fall as low as $13,000. He noted that it shouldn't be ruled out that as things get worse, the salary might fall to the $9.96k–$10k area.
After Binance pulled out of an agreement to buy its rival FTX, which is experiencing economic turmoil, the cryptocurrency market experienced a significant sell-off that caused Bitcoin's price to drop below USD16,000 late on Wednesday.
Binance announced that it would not be purchasing FTX based on "business due diligence" and "the latest press stories alleging mishandled customer monies and purported US agency investigations." Investors who had hoped that Binance would support the faltering exchange were left in disbelief after learning the truth.
Numerous other industry watchers agree with Newton, and JP Morgan experts predict that the price of BTC will fall to $13,000. According to analysts, the current circumstances will cause "a cascade of margin calls" in the cryptocurrency industry.
Similar to this, a well-known cryptocurrency analyst going by the handle AlitcoinSherpa said there is a strong chance BTC will follow historical trends. The analyst believes the asset can retrace to $20,000 in the future. At that price, he claims, "significant opposition for Bitcoin" would arise.
The analyst did stress that there would be increased buying pressure if Bitcoin rose to $12,000 though.
A fall to $10,000 is still feasible, according to seasoned crypto trader Michael van de Poppe, but it would depend on how the market reacts to the crisis.
Mike McGlone, a commodity strategist for Bloomberg Intelligence, also noted that Bitcoin has a support level around $10,000 and that the FTX situation might trigger "macroeconomic dominoes."
Analysts anticipate that the next revision to the U.S. Consumer Price Index, which will be released on November 10th, could increase market volatility for cryptocurrencies. The last time statistics on inflation were released, the cost of Bitcoin decreased. At the time of publication, the price of Bitcoin was $16,683, a decrease of more than 8% from the previous day.