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A month after the collapse of the FTX (FTT-USD) cryptocurrency exchange and a month-long period of consolidation in the range of $15,500-$17,200 per Bitcoin (BTC-USD), the most popular cryptocurrency was trying to break out of the bearish trend and was trading above $18,000 for a short time. Despite the appearance of the first signs of optimism in the market, the situation began to worsen again, primarily due to news of a potential criminal case against the world’s largest crypto exchange Binance (BNB-USD), and doubts about the quality of the audit report on its reserves. As a result, on December 13, Binance customers withdrew funds in the amount of about $1.9 billion, which is one of the largest values in recent years.
N_Aisenstadt – TradingView
At the moment, the key tasks for analysts, investors, and traders of cryptocurrencies are to determine whether the short-term period of sideways movement is just a respite before the continuation of the bearish trend or whether the situation in the market has begun to change and we can see a restart of the bull cycle again. In this article, I will present an analysis of the impact of the Fed’s interest rate hike on the crypto industry, the financial situation of miners, and the situation around Binance and Tether, which is the world’s largest stablecoin.
The situation around the largest crypto exchange Binance
More than a month has passed since the bankruptcy of one of the world’s largest cryptocurrency exchanges, FTX, but at the same time, the nervousness in society does not fade away but only intensifies. This is reflected in the withdrawal of Bitcoins from exchanges to cold wallets or their exchange for fiat currencies. In the first half of December, the rate of withdrawal of coins reached a record level of 201,650 Bitcoins per month, which has not happened since the emergence of cryptocurrencies as investment assets.
Author’s elaboration, based on Glassnode
Moreover, one of the key cyclical indicators, namely Reserve Risk, can be used to determine the ratio of risk and reward in relation to the confidence of long-term investors in Bitcoin. This indicator is able to model the relationship between the current price of an asset and investors’ confidence in its ability to rise in price in the future. At the moment, Reserve Risk continues to fall, which indicates that the panic in the market continues, which is what long-term investors take advantage of by accumulating Bitcoin. These investors are convinced of the prospects for the global use of cryptocurrencies and …….
