3 key crypto price events to watch in the wake of the FTX and Alameda debacle

Up until the commencement of this week, Bitcoin (BTC) had been demonstrating record-low volatility, and this gave altcoins capable latitude to overgarment immoderate bully method setups. 

At the aforesaid time, on-chain information and method investigation were opening to suggest that BTC was midway done carving retired a bottom, and galore analysts believed that brighter days laic ahead.

Fast guardant to the present, and the volatility spike the marketplace received really turned retired to beryllium a achromatic swan event.

As you already know, FTX is kaput.

Alameda Research is kaput.

BlockFi has put a halt to withdrawals, citing an inability to “operate arsenic usual,” truthful it’s “pausing lawsuit withdrawals arsenic allowed nether our Terms,” suggesting that the institution is besides kaput.

The contagion is spreading, and the shrapnel from this Krakatoa-level lawsuit is bound to ripple passim the full crypto ecosystem.

At this time, it’s hard to marque a assured short-term concern thesis for assets by simply looking astatine the chart, and the champion happening unsure investors tin bash is either instrumentality to a time-tested program oregon bash nothing.

The astir apt short-term result is volatility volition stay high, and crypto prices volition proceed to whipsaw for a while.

Nobody is comfy focusing connected the imaginable antagonistic outcomes that prevarication up for the crypto assemblage and cryptocurrency prices, but it’s each investor’s work to see the implicit worst outcomes and person a contingency program successful place.

That mode you don’t freak retired erstwhile crap truly hits the fan.

Here are a fewer things to support an oculus connected implicit the coming days.

USDT/USD vs. USDC/USD

During precocious volatility events, stablecoins sometimes interruption their peg with the dollar. If there’s immoderate chaotic FUD astir Bitcoin being banned, hacked oregon dying, stablecoins prices sometimes emergence supra $1.00 arsenic traders question structure successful assets fixed to the dollar.

During crypto achromatic swan events, sometimes Tether (USDT) loses its dollar peg. It’s happened a fig of times successful the past, and usually, erstwhile the fume clears it regains the 1:1 peg.

On Nov. 9, USDT/USD broke beneath its dollar peg, dipping arsenic debased arsenic $0.97 astatine 1 point, according to information from TradingView and Coinbase. While USDT dipped beneath its peg, USD Coin’s (USDC) worth spiked to $1.01.

USDT/USD peg. Source: TradingView

While we won’t research the unconfirmed reasons wherefore determination was dislocation betwixt the two, the unsubstantiated rumors related to Tether and Alameda Research tin easy beryllium recovered connected Twitter.

What’s important to enactment present is that panic tin easy beryllium triggered by mendacious information, rumors and lies, truthful it doesn’t substance if the rumors astir Alameda/Tether are wholly false.

If it spreads connected societal media and spooks investors, they’re going to enactment and successful this case; galore volition oregon are successful the process of flipping their USDT to USDC, BTC oregon different stablecoins.

Similar behaviour was seen during the Terra and Celsius implosion. On May 12, USDC’s terms spiked from $1.00 to $1.06–$1.19, according to information from TradingView and KuCoin. On the aforesaid day, USDT’s worth concisely dropped to $0.98 and $0.94.

USDC/USD peg. Source: TradingView

When the terms is dislocated and determination are spreads crossed exchanges, making stablecoin conversions becomes costly and the acquisition of swapping from 1 to the different oregon from an altcoin to stablecoin tin go unpleasant.

The USDT and USDC dollar peg is thing worthy keeping an oculus on.

Bitcoin terms expectations

The Nov. 8 sell-off yet pushed BTC’s terms retired of the 146-day scope wherever the terms fluctuated betwixt $24,500 and $18,600.

BTC/USDT 1-day chart. Source: TradingView

This is simply a significant scope break, and from the viewpoint of method analysis, nonaccomplishment to recapture this scope and accrued selling could spot the terms portion done the measurement illustration spread to find enactment successful the $11,000–$12,000 range.

Unpleasant, yes, but that’s conscionable the existent reality.

If Bitcoin is capable to reclaim and clasp the $18,000 handle, astatine slightest the terms volition backmost successful its erstwhile range, and that would beryllium a bully sign.

A glimpse astatine the Ether (ETH) illustration reflects a akin set-up wherever ETH dropped retired of a 148-day scope betwixt $2,000 and $1,250, but the terms has already reclaimed the erstwhile range.

ETH/USDT 1-day chart. Source: TradingView

Bearish traders person a downside people successful the $700 range, but it’s absorbing to spot however the terms has rebounded to commercialized backmost astir $1,250.

Related: Genesis Trading reveals $175M of funds are locked successful FTX

The marketplace is searching for firmer footing

A batch of crypto-focused companies and concern groups person vulnerability to FTX and Alameda research, which besides means these aforesaid companies present person immoderate holes successful their ain equilibrium sheets.

— Being Satoshi (@BeingSatoshi) November 10, 2022

A fistful of these crypto-native companies besides clasp significant-sized bags of assorted altcoins and decentralized concern (DeFi) tokens. To salvage the existent losses, marque bully connected their ain loans, and conscionable their lawsuit obligations, it’s imaginable that a fig of these BTC, altcoin and DeFi token stashes could find their mode to being marketplace sold connected spot exchanges.

Altcoins are already down badly, and immoderate are comparatively illiquid, meaning a crisp summation successful selling could enactment beardown downward unit connected price.

Before buying what looks similar once-in-a-life-time dips and rhythm bottoms, investors should excavation astir and instrumentality a person look astatine who are immoderate of the bulk holders of the token/project and retrieve that FTX’s multi-billion-dollar implosion is yet to beryllium afloat felt passim the sector.

Now is the clip to probe and bash owed diligence earlier making immoderate concern successful immoderate cryptocurrency.

This newsletter was written by Big Smokey, the writer of The Humble Pontificator Substack and nonmigratory newsletter writer astatine Cointelegraph. Each Friday, Big Smokey volition constitute marketplace insights, trending how-tos, analyses and early-bird probe connected imaginable emerging trends wrong the crypto market.

The views and opinions expressed present are solely those of the writer and bash not needfully bespeak the views of Cointelegraph.com. Every concern and trading determination involves risk, you should behaviour your ain probe erstwhile making a decision.