Bitcoin is slowly coming back to a very interesting position in the chart. Some experts already see the November low as a turning point. By Gerd Weger
Bitcoin may gradually break out of its November lows. If this development continues, a chart situation similar to the one at the end of October could result. However, the Bitcoin mini rally was abruptly interrupted by the FTX crash in early November. If there are no more internal irritations in the crypto market itself, a bear market rally could now be in the cards for the start of the year.
Bitcoin and Ethereum with odds
The bankruptcies of Terra and crypto exchange FTX and their environment have led to lower prices this year. This is not unprecedented, as we have repeatedly emphasized here. During Bitcoin’s two previous major cycles, in 2014 and 2018, there were also huge price losses of up to 85%. Whether the November low is the last word remains to be seen. Some experts, like Bitmex founder Arthur Hayes, see it that way. In his view, anyone who might go bankrupt during the bear market is already broke. Since these companies often held large reserves of Bitcoin and Ethereum, these holdings have already been sold afterwards and no longer cause stress in the market. Therefore, Bitcoin has now bottomed out. A possible additional charge at the end of the year has not yet been discussed. Because the sharp price declines since the beginning of the year could still lead to the realization of tax losses before the end of the year. It is debatable whether investors have already largely realized such achievements.
Altcoins with new possibilities
Some altcoins in particular might still experience sudden price swings during the holidays. Dumping limits could be very interesting here in individual cases. Crypto investors should therefore also follow the courses at Christmas and between holidays. Because, as we know, there is a 7/24 trading of cryptocurrencies. The mood after the collapse of FTX has calmed down a bit. Nevertheless, distrust of key players persists. Rumors of bankruptcy keep pouring in on Singapore’s Crypto.com crypto exchange. Crypto.com is one of the main advertisers of the ongoing FIFA World Cup and is attracting attention with its perimeter advertising at every game. FTX had also invested heavily in the sports business and, as a sponsor, had received the naming rights to an NBA arena in Miami. A number of crypto exchanges attempt to respond with proof of liquidity. A proof of reserves is intended to prove that the respective crypto exchange actually holds the customer deposits. This proof of deposit must be confirmed by independent auditors.
How to properly invest in cryptocurrencies
Experts criticize the fact that the value of assets is compared to deposits during the testing procedure. However, they do not take into account the sum of all liabilities of the crypto exchange. Nevertheless: a first step towards more transparency. Nevertheless, investors’ maxim should remain to move large amounts of their cryptocoins to their own wallets. It is not for nothing that one of the most famous sayings in the crypto scene is: “Not your keys, not your coins”.
By the way: With the BÖRSE ONLINE Best of Krypto index, you can easily buy the ten largest coins with just one certificate traded in Germany.
This text first appeared in BÖRSE ONLINE 50/2022. Here you can get an overview of the magazine.
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The CEO and majority owner of the publisher Börsenmedien AG, Mr. Bernd Förtsch, has taken direct and indirect positions in the following financial instruments mentioned in the publication or related derivatives which could benefit from any price movements resulting from the publication : bitcoin
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