Bitcoin BTC saw major volatility after the Nov. 8 Wall Street open as turmoil over exchange FTX punished markets further.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
Binance hints at plan to buy FTX
Showed BTC/USD hitting $19,244 on Bitstamp, marking the pair’s lowest levels in two weeks and 24-hour losses of nearly 7%.
FTX remained the main topic in the industry, despite the United States midterm elections getting underway and Nov. 10 due to deliver fresh inflation data.
“Event of the week was supposed to be US CPI on Thursday, not two billionaires with acronyms for names nuking the market,” popular commentator Tedtalksmacro summarized.
Worries over solvency at FTX were not helped by a lengthy silence from the exchange’s executives as withdrawals stopped on the day.
Data from on-chain analytics platform CryptoQuant thus showed only a fraction of the previous day’s near-20,000 BTC balance reduction on FTX for Nov. 8.
BTC netflow (FTX) 1-day chart. Source: CryptoQuant
Further numbers revealed that exchange users were voting with their wallets elsewhere — removing funds from U.S. platforms such as Coinbase and depositing them to foreign-registered competitors such as Binance.
Binance was up a net 4,840 BTC for Nov. 8 at the time of writing, while Coinbase was conversely down 5,180 BTC.
BTC netflow (Binance) 1-day chart. Source: CryptoQuant
Engineer and trader Tree of Alpha nonetheless stayed optimistic about the eventual resolution of the FTX saga.
“For now we suffer,” part of a tweet read, adding that the “news playbook is omega long ftt majors if prices are still that bad when SBF and/or CZ announce they reached a deal and funds safu on both ends and withdrawals are back on.”
That thesis turned out to be true, as resumption of withdrawals sparked an instant march over $20,000 for Bitcoin.
A surprise message from Binance CEO, Changpeng Zhao, additionally revealed tentative plans for a buyout.
This afternoon, FTX asked for our help. There is a significant liquidity crunch, one post read.
To protect users, we signed a non-binding LOI, intending to fully acquire http://FTX.com and help cover the liquidity crunch. We will be conducting a full DD in the coming days.
Bitcoin grapples with support losses
For Bitcoin, suffering was also the name of the game on the day, while Arthur Hayes revealed a belief that the bad times may last far longer.
Amid the FTX withdrawal freeze, he unveiled a bet on $15,000 Bitcoin via put options with a strike date of March 2023.
Closer to home, monitoring resource Material Indicators acknowledged that the past 24 hours had significantly eroded support — and price theories — from recent weeks.
“BTC technical and psychological support obliterated,” it stated. Referring to moving averages (MAs), it said that the “100-Day MA, 21-Day MA, 50-Day MA and 2017 Top all lost in one D candle.”
An accompanying chart showed the BTC/USD order book on Binance, with support increasing below spot price.
“FireCharts shows decent bid liquidity, but don’t catch knives. Mitigate some risk by waiting for buying to resume or park your funds on the sidelines,” Material Indicators added.
BTC/USD order book chart (Binance). Source: Material Indicators/ Twitter
It remained to be seen at the time of writing whether spot strength could recover lost ground on hourly or daily timeframes.
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