16.12.202212:12 Forex Analysis & Reviews: Will Bitcoin be saved by fraud?

Ignorance is no excuse. Accusing FTX's founder of fraud was a breath of fresh air for the entire crypto market. If people had believed Sam Bankman-Fried's words about not knowing how it all works, the whole industry would have been hit. Capital outflows from Binance, which reached $3.7 billion in a week, would have accelerated, and BTCUSD quotes would have continued to go down. Fraud looks much better because the rest of the crypto exchanges can be crystal clear. And when confidence in an asset is restored, it can find the bottom.

For those with a glass half full, looking for the good when things are bad is commonplace. Seemingly, the collapse of Bitcoin by 70%, the collapse of the TerraUSD stablecoin, and the bankruptcy of FTX made crypto winter so severe that it is now difficult to find a person who would adhere to the FOMO strategy "buy or lose." Fear of losing profits was typical for the crypto market a year ago, now it is in a very different situation.

But all things come to an end, good and bad. And if the market can learn the lessons, the crypto winter will end. According to Deutsche Bank, the FTX bankruptcy exposed vulnerabilities in the crypto system, including insufficient reserves, conflicts of interest, lack of regulation and transparency, and unreliable data. All of these can be addressed by bringing the crypto ecosystem closer to the established financial sector.

Investors, who slowed the capital outflow from Binance from 40,353 bitcoins on December 12 to 3,279 on December 15, understand this very well. It looks like the worst in terms of structural problems for the crypto market is over. It may start to regain lost correlations with U.S. stock indices.

Dynamics of capital flows on the Binance exchange

Alas, the dynamics of the latter suggests that the fall of BTCUSD is in danger of continuing. Even despite the gradual restoration of confidence in the crypto industry. The Fed is to blame for everything, for not paying attention to the slowdown in inflation in the United States in November from 7.7% to 7.1% and is ready to raise the federal funds rate by another 75 bps to 5.25% in 2023. Given the central bank's predicted GDP slowdown to 0.5%, a recession is likely next year. And the S&P 500 fears it. It's not for nothing that the broad stock index collapsed in response to disappointing statistics on U.S. retail sales.

So there is both good news and bad news for Bitcoin. The good news is that the accusation of fraud to the FTX founder and the slowdown in the outflow of capital from crypto exchanges indicate the restoration of trust in the system. The bad news is that the terrible times for risky assets, led by U.S. stocks, seems not yet over.

Technically, on the daily chart, BTCUSD clearly worked out the buying strategy from 17,400, followed by a reversal from the 18,000 pivot point. If the attack of the "bears" is not stopped by moving averages, there is a high probability that Bitcoin will fall to 16,500. The recommendation is to hold shorts and increase them on pullbacks.