FTX is done — What’s next for Bitcoin, altcoins and crypto in general?

180 Views
FTX is done — What’s next for Bitcoin, altcoins and crypto in general?

2022 was a tough year for crypto, and November was especially hard on investors and traders alike. 

While it was incredibly painful for many, FTX’s blowup and the ensuing contagion that threatens to pull other centralized crypto exchanges down with it could be positive over the long run.

Allow me to explain.

What people learned, albeit in the hardest way possible, is that exchanges were running fractional reserve-like banks to fund their own speculative, leveraged investments in exchange for providing users with a “guaranteed” yield.

Somewhere across the crypto Twitterverse, the phrase “If you don’t know where the yield comes from, you are the yield!” is floating around.

This was true for

A steady flow of bad news could present a nice opportunity

Currently, Ether’s price looks a bit soft from a technical analysis standpoint, and the recent news about the FTX thief holding the 31st largest Ether spot position, plus concerns over censorship, centralization, the United States Office of Foreign Assets Control enforcement on this “whale” and other Ethereum-based protocols that have exposure or bankruptcy proximity to FTX and Alameda could stir up a bit of FUD that impacts the altcoin’s price action.

Uncertainty on when the Shanghai upgrade will be enacted and investor concerns about when staked coins can actually be withdrawn are also interesting conversations that could turn short-term sentiment against Ether.

The thesis is pretty simple. ETH has held support around $1,200–$1,300 pretty well through all of the previous months of bearish market developments, but will the potential challenges mentioned above lead to a test of the level again?

Stakers are essentially spotted long and earning yield, so at this juncture, opening a low-level short position with taking profits orders at $700–$600 could possibly be rewarding.

This newsletter was written by Big Smokey, the author of “The Humble Pontificator Substack” and resident newsletter author at Cointelegraph. Each Friday, Big Smokey will write market insights, trending how-tos, analyses and early-bird research on potential emerging trends within the crypto market.