Will Binance fall? How low can Bitcoin go then?
Updated
The price of Bitcoin faltered shortly after our previous post. Indeed, Bitcoin erased all of its gains and returned to the narrow range before breaking below it. Currently, it trades near the range’s lower bound at 16 800$. As for our stance, we continue to be bearish on BTCUSD and remain skeptical of calls for the market bottom. We believe the bear market has not ended, and Bitcoin will mark new lows over time. Accordingly, we maintain our price targets of 15 000$ and 13 000$.
However, there are growing chances of Bitcoin dropping much lower than that. Especially if we consider that the stock market might be only halfway through the bear market and the economic situation will continue to deteriorate in the coming months. We view more interest rate hikes as very negative for Bitcoin and the overall cryptocurrency space, which is highly correlated with the stock market. As a result, we expect this to weigh on the corporate side of the market, which brings us to what many people have questions about - Will Binance fall? We simply do not know. But we know that a financial institution needs liquidity and to generate enough revenue in order to stay in business. In 2022, Binance’s competitor Coinbase has been having problems achieving the latter.
The company has lost more than $1.9 billion in the first three quarters. In addition to that, Coinbase disclosed a staggering decline in trading volume from $327 billion to $159 billion(YoY) in the third quarter of 2022 (down from a peak of $547 billion. in Q4 2021). All that, while Coinbase has only about $8.1 billion in market cap. All that makes us wonder whether the systemic fall has to come from Binance. Perhaps, Binance might fall as a result of other companies going bust in one coordinated fashion. Therefore, we raise caution to a very high level. In the case of the systemic downfall, we foresee Bitcoin dropping below 10 000$.
Illustration 1.01
To support our bearish thesis, we would like to see the inability of the price to hold above 16 800$. Furthermore, we would like to see a pick-up in volume accompanying a price lower.
Technical analysis
Daily time frame = Neutral/Slightly bearish
Weekly time frame = Neutral/Slightly bearish
Illustration 1.02
Illustration 1.02 displays the daily chart of BTCUSD and two simple moving averages. We would like to see a bearish crossover between these moving averages to further support our bearish thesis.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
However, there are growing chances of Bitcoin dropping much lower than that. Especially if we consider that the stock market might be only halfway through the bear market and the economic situation will continue to deteriorate in the coming months. We view more interest rate hikes as very negative for Bitcoin and the overall cryptocurrency space, which is highly correlated with the stock market. As a result, we expect this to weigh on the corporate side of the market, which brings us to what many people have questions about - Will Binance fall? We simply do not know. But we know that a financial institution needs liquidity and to generate enough revenue in order to stay in business. In 2022, Binance’s competitor Coinbase has been having problems achieving the latter.
The company has lost more than $1.9 billion in the first three quarters. In addition to that, Coinbase disclosed a staggering decline in trading volume from $327 billion to $159 billion(YoY) in the third quarter of 2022 (down from a peak of $547 billion. in Q4 2021). All that, while Coinbase has only about $8.1 billion in market cap. All that makes us wonder whether the systemic fall has to come from Binance. Perhaps, Binance might fall as a result of other companies going bust in one coordinated fashion. Therefore, we raise caution to a very high level. In the case of the systemic downfall, we foresee Bitcoin dropping below 10 000$.
Illustration 1.01
To support our bearish thesis, we would like to see the inability of the price to hold above 16 800$. Furthermore, we would like to see a pick-up in volume accompanying a price lower.
Technical analysis
Daily time frame = Neutral/Slightly bearish
Weekly time frame = Neutral/Slightly bearish
Illustration 1.02
Illustration 1.02 displays the daily chart of BTCUSD and two simple moving averages. We would like to see a bearish crossover between these moving averages to further support our bearish thesis.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
Trade active
Bitcoin broke below the lower bound of the narrow range, which is bearish. 
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