The crypto market looks to be unraveling as panic sets in
The bitcoin price has collapsed and is nearing our initial target of $25,000. We note that we amended our measured move in an article yesterday, which is even lower. We cannot guarantee that bitcoin's price will meet our targets due to the constant flux in economic expectations to changing variables. However, it is safe to say that we are concerned that cryptocurrency prices have a bias to the downside - bitcoin is down over 20% for the week alone.
Participants will be concerned with yesterday's CPI numbers, higher than the consensus, as the Fed's aggressive tightening of policy is a headwind for the crypto market. Moreover, the savage capitulation of the stablecoin TerraUSD (UST) has enormously affected sentiment. This loss of confidence is understandable. Firstly UST was meant to have a one-for-one peg with the dollar. But, on the other hand, Luna, connected by algorithms to UST, has dived 93% since its close yesterday.
The situation is not helped by Coinbase (COIN), which the market has hammered. The crypto exchange's CEO tweeted yesterday that there is "no risk of bankruptcy." However, the suggestion that customer assets may lack bankruptcy protection, muddies the clarity of the tweet.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.
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