- On Friday, bitcoin (BTC) slid by 4.21% to end the day at $16,642. Notably, BTC ended the day at sub-$17,000 for the first time in nine sessions.
- News of accounting firm Mazars suspending crypto operations hit BTC, with recession fears adding to the bearish mood.
- The Fear & Greed Index slipped from 29/100 to 28/100 in response to the BTC return to sub-$17,000.
On Thursday, bitcoin (BTC) slid by 4.21%. Following a 2.47% loss from Thursday, BTC ended the day at $16,642. Notably, BTC ended the day at sub-$17,000 for the first time in nine sessions.
A bullish start to the day saw BTC rise to a mid-morning high of $17,544. Coming up short of the First Major Resistance Level (R1) at $17,727, BTC slid to a final-hour low of $16,550. BTC fell through the First Major Support Level (S1) at $17,159 and the Second Major Support Level (S2) at $16,945 to end the day at $16,642.
Crypto Exchange Liquidity and Recession Fears Hit Sent BTC South
On Friday, news of accounting firm Mazars Global pausing crypto operations hit investor sentiment. The Wall Street Journal reported that Mazars Global removed its Binance Proof-of-Reserves report from its website while announcing that it had suspended crypto-related services.
According to CNBC, Mazars Group said that it had,
“Paused its activity relating to the provision of Proof of Reserves Reports for entities in the cryptocurrency sector due to concerns regarding the way these reports are understood by the public.”
On Thursday, Binance CEO CZ stated that no amount of withdrawals can cause issues for Binance. CZ added,
“This is majorly different than fractional reserve banking. Binance holds assets 1:1.”
In the same tweet, CZ confirmed that the USDC issue was related to bank-conversion channels and working hours.
While Binance was back in the spotlight, recessionary jitters continued to weigh on riskier assets.
According to prelim figures, the US manufacturing PMI fell from 47.7 to 46.2, with the all-important services PMI down from 46.2 to 44.4. The services PMI stood fell to its lowest level since September 2021 (43.7).
The NASDAQ Index responded to the numbers, falling by 0.97%, with the S&P500 ending the day with a 1.11% loss.
Today, investors will likely monitor the crypto news wires for updates on Binance and other crypto exchanges. With the dust yet to settle from the collapse of FTX, suggestions of a liquidity crunch would send BTC and the broader crypto market into another tailspin.
The Fear & Greed Index Fall to 28/100 on BTC Return to Sub-$17,000
Today, the BTC Fear & Greed Index slipped from 29/100 to 28/100. The pullback came in response to another bearish crypto session that led BTC to sub-$17,000 for the first time in eight sessions.
However, despite the BTC return to sub-$17,000, the Index pullback was modest, suggesting investor calm over the news of Mazars Global suspending crypto services. Notably, the accounting firm did not insinuate inaccurate information but appeared to want to distance itself amidst the increased scrutiny.
With exchange liquidity being the market focal point in the wake of the FTX collapse, news of another major exchange facing a liquidity crunch would send the Index tumbling.
Avoiding sub-20/100 remains the key near-term. The bulls will need to target the pre-FTX collapse November 6 high of 40/100 to support a BTC run at $20,000.
Bitcoin (BTC) Price Action
At the time of writing, BTC was up 0.34% to $16,698. A range-bound start to the day saw BTC rise to an early high of $16,738 before falling to a low of $16,609.
BTC needs to move through the $16,912 pivot to target the First Major Resistance Level (R1) at $17,274 and the Friday high of $17,544. A BTC return to $17,000 would signal a bullish session. However, investors will need convincing reassurances from exchanges of adequate reserves to support the recovery from Friday’s pullback.
In the event of an extended rally, BTC would likely break out from the Second Major Resistance Level (R2) at $17,906 to bring $18,500 into view. The Third Major Resistance Level (R3) sits at $18,900.
Failure to move through the pivot would leave the First Major Support Level (S1) at $16,280 in play. Barring a risk-off-fueled sell-off, BTC should avoid sub-$16,000 and the Second Major Support Level (S2) at $15,918. The Third Major Support Level (S3) sits at $14,924. An adverse crypto market event would bring sub-$16,000 into play.
Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. This morning, BTC sat below the 100-day EMA, currently at $17,178. After Friday’s bearish cross, the 50-day EMA pulled back from the 200-day EMA, with the 100-day EMA easing back from the 200-day EMA, delivering bearish signals.
A move through the 100-day EMA ($17,178) would support a run at the 50-day EMA ($17,273) and R1 ($17,274). However, failure to move through the 100-day EMA ($17,178) would leave S1 ($16,280) in view.