This past week was once again a reminder of how risky the cryptocurrency market can be and how in many ways, it is still “the wild wild west.” The collapse of the world’s second-largest crypto broker, FTX, and Sam Bankman-Fried’s (FTX’s CEO) $16 billion net worth wipeout is still an ongoing and developing story where new pieces of information are being released every day. What we do know for sure, though, is that this has been one of the largest capital losses of all time, and the effects of this crush are being felt all across the cryptocurrency market.
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As a follow-up to last week’s article, this piece will go over the cryptocurrencies to watch this week: Bitcoin (BTC-USD), Ethereum (ETH-USD), Ripple (XRP-USD), and Litecoin (LTC-USD).
Bitcoin (BTC-USD)
The collapse of FTX didn’t just affect its native FTX token (FTT-USD) but also Bitcoin and most of the other cryptocurrencies.
With the release of the news, the biggest crypto by market cap broke below the support level at $18,000. This was the first time Bitcoin sellers were strong enough to push below this level since June. From there, the way further down was fast and aggressive and led all the way to a new yearly low near $15,600. The last time the price was at this level was back in November 2020.
At writing, buyers have come into the market and managed to push the price a bit higher to around $16,700. If the bullish momentum continues this week, the next resistance level to watch is at $20,000. However, if the negative sentiment caused by the FTX scandal continues to spread fear across the market, the next support for Bitcoin is around $11,800.
Ethereum (ETH-USD)
Just as mentioned in last week’s market breakdown, the 200-day moving average (white line on the chart) acted as a resistance. Immediately after touching this level, the price dropped lower following the FTX news to reach its lowest level in five months at ~$1,080.
The $1,000 level is extremely important for Ethereum, as not only is it a strong support area, but it is also a number that has strong psychological effects on traders.
After touching that support level, the price has managed to recover. At the time of writing, Ethereum is currently trading at $1,250. In the event of a continuation higher, the next resistance level will be at $1,400. However, if sellers regain control, the next major support level is far away at $500.
Ripple (XRP-USD)
Ripple’s XRP token is down by 25% in the last seven days. After the support level at $0.44 failed to hold, the price melted down very fast to the next support level at $0.315. From there, buyers finally came into the market and pushed the price up higher.
As of now, XRP is trading at $0.34. If the movement lower continues this week, the next support level will be at around $0.25. However, if buyers push higher, the 200-day moving average (white line on the chart) should then act as a resistance area around the $0.40 mark.
Litecoin (LTC-USD)
As mentioned in last week’s market breakdown, Litecoin continues to show relative strength to the rest of the market. The token is down by 14% in the last seven days, less than all other major cryptos.
At writing, Litecoin is back above the major support level at $57. In the event of a continuation of this move higher, the next area of resistance will be at $64. However, if sellers regain control and push the price lower, the next support area is at $50.
Conclusion: Anything Can Happen in Crypto
Last week’s event shows that, once again, anything can happen in crypto. The waves from the collapse of Sam Bankman-Fried’s empire are still hitting the market. At this moment, I feel the best thing to do is sit on the sidelines for a few days and wait for the dust to clear until things become easier to trade.
One thing I can confidently say is that crypto is not going anywhere. It may take some time for the market to lick its wounds and recover, but the future remains bright for the industry as a whole.
