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| By Alex Benfield |
The past week has not been kind to the crypto market, as support levels have broken and prices have fallen.
Currently, crypto is dealing with another wave of fear, uncertainty and doubt. You see, FUD is essentially when negative information about cryptocurrencies starts circulating, causing investors to become pessimistic about these assets.
And just when it looked like we were clear of the days of unsubstantiated FUD and rumored contagion, we are right back in the thick of things.
This time around, the FUD stems from some good old mysterious rumors of Binance (BNB, “C-”) insolvency.
To be specific, Binance has been accused — without any evidence as far as I am aware — of selling Bitcoin (BTC, “A-”) in order to buy up its own exchange token, BNB, and keep its price above a certain level.
The accusation started on X (formerly known as Twitter), and it’s speculated that this rumored selling of BTC was dragging down the market.
Now, I’ll leave the reason why Binance would want to prop up the price of BNB to the speculators.
But I’d like to remind you that at this time, no evidence has been provided to back up this rumor. Additionally, the Binance team — including the CEO of Binance, CZ — have vehemently refuted these claims.
Even so, just the mere rumors of more ick in the crypto ecosystem was enough to bring prices down to levels not seen since the June lows.
Up until recently, the market was uncharacteristically stable with no volatility to speak of, which had many analysts expecting a rally to new highs. Instead, we got a correction to the current levels.
Although there may still be a rally coming soon, it now seems doubtful that prices will run up to new highs in the next rally.
In general, the biggest bullish catalyst that could move the market in a meaningful way is the spot Bitcoin exchange-traded fund decision, which could come as soon as next month. However, with the way the Securities and Exchange Commission is acting, this decision could easily be delayed until next spring.
I talked about the ETF in detail last week, so I won’t delve too deep into that topic today.
But the main point is that the trade most small retail investors will want to make is to front-run BlackRock (BLK) and other large financial institutions to buy up BTC before demand goes through the roof. It seems like the obvious move, but sometimes the obvious trade is the best to make.
So, while the market may not rally to new highs for several months, this could be the perfect time to accumulate as much BTC as possible.
Turning to price action, Bitcoin has dipped back down to the $26,000 level, where it seems to have found some support over the past few days.
The key level to watch here is the June low of $25,100, and we’d like to see BTC remain above that level in order to keep any hopes of a rally to higher prices in the next few months.
Should BTC drop below $25,100, it’s likely to retest support at $20,000 and remain neutral for the medium term.
Meanwhile, Ethereum (ETH, “B”) has dipped down to the lows it set in June and is holding on to the support of its 200-week moving average.
At this point, ETH’s chart is a bit less bullish and it appears Ethereum is in for neutral price action for the time being.
For now, the bulls are defending that 200-week MA, so that will be a critical level to watch moving forward. Should the bulls hold that level, they could push ETH back to $1,800 and into the previous trading range.
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Notable News, Notes and Tweets
- Here’s another one for those of you who enjoy speculating: One address has accumulated over $3 billion in BTC over the past 90 days … without selling any. I wonder who could be behind the address.
- Sam Bankman-Fried, founder of the fallen crypto exchange platform FTX, doesn’t seem to be handling prison too well.
What’s Next
As we reflect on the tumultuous ebbs and flows of the crypto market, it's vital to remember that innovation and adoption cycles take time. Additionally, short-term volatility is inherent in emerging financial systems like cryptocurrency.
As such, FUD, rumors and short-term market reactions have always been part and parcel of the crypto space.
Yet, throughout crypto’s history, the underlying technology and the steadfast belief in its potential have always prevailed, eventually leading to greater heights.
Although the present might be fraught with uncertainty, it's essential to view the crypto market with a long-term lens.
The pioneers of this digital frontier have weathered many storms, and those who remain patient and steadfast often come out stronger on the other side.
In the grand narrative of cryptocurrency, it's not about the daily or monthly price swings but the transformative potential it holds for the future. To win in crypto, patience isn't just a virtue; it's a necessity.
Best,
Alex
