Bitcoin is currently experiencing what many will describe as a “last-ditch effort” by the bulls. It is experiencing notable price increases that may impact the coin’s performance on the monthly scale. Nonetheless, this does change the fact that the asset was mostly bearish over the last 28 days.
Most traders will agree that fundamentals played a huge role in price action as there were several. One thing that comes to mind is the collapse of FTX. It started with a simple beef between two important figures in the crypto space.
What many perceived as a show of power between the two individuals turned deeper than they anticipated. Binance CEO announced that it would sell off its FTT bag worth $500 million. Almaeda Research claimed it was going to buy up the assets to quell the growing panic among investors.
This never happened as the next few days presented a tale many would love to forget. FTT went to $1 from $18 which had a rippling effect on the entire crypto market. Further evidence after the main effect pointed to Sam Bankman-Fried as Fraudulent.
One such was that he took $300 million from funds raised for FTX, and used them for personal issues. The FTX-saga drove the clamor for self-custody of crypto assets to a new level as many traders removed their bags from exchanges into offline wallets. What effect did this have on BTC?
Bitcoin hits new low for 2022
On November 8, the entire market went into panic mode as the second-largest crypto exchange was closing up. They closed withdrawals and customers were unable to access their funds. This drove the prices of major cryptocurrencies to a level they’ve not attained for a while.
For example, BTC dipped to $17,144 from a high of $20,5967. Although the apex coin recovered, the intraday session ended with it recording losses of almost 10%. The blood bath was not over as the next intraday session proved.
It recorded another low the next and faced stricter market conditions compared to the previous day’s. This time, the asset under consideration flipped the $16k support as the bearish dominance peaked.
As a result, it hit a new yearly low of $15,632 and closed with losses of 14%. The apex coin went lower on the 21st day of the month as it lost $16,000 and ended the session at $15,479; the new low for 2022.
The massive decrease comes as no surprise as several outlooks pointed to it. One such suggested that the top coin will retrace to levels it hasn’t and hinted at the low for the 365-day period to around $16k or $14k.
November is coming to an end with BTC failing to reclaim any key levels. It may end with losses exceeding 17%. This marks the second worst-performing month of the year as bitcoin lost 17.5%. Several indicators were also affected by the downtrend.
BTC was Oversold
Bitcoin was oversold for the first time in a while. On November 9, when the downward trend accelerated, this occurred. The Relative Strength Index dropped to a low of 24.4, as we could see. The following day, it was better. As the bullish dominance reached its zenith, the metric likewise peaked at 51.
The Moving Averages have been out of focus for some time. This changed, though, when the asset retested the 200-day MA, which gave many people hope for an improvement in price performance. There was a bearish divergence before the significant dip.
A few days ago, we saw that the asset had a bullish divergence that suggested further price increases. We saw multiple greens on the chart to support this. The present was among the longest.
A Bearish Divergence Scare
In the first week of November, Bitcoin lost more than 22% of its value. This occurred after multiple daily declines following the FTX incident. As a result, MACD began the bearish convergence phase.
The longest candle of the month came as the 12-day EMA reversed. If market circumstances don’t improve, the metric will risk a divergence. The chart’s two green candles helped to slow the decline.
There was therefore no complete divergence. The 26-day EMA is on an upswing and is on the verge of intersecting the 12-day, so danger still looms. The Relative Strength Index experienced retracements as well
The indicator fell to a low of 38, sparking concerns that the asset might be oversold. As the RSI rose above 40 before the end of the period under study, this worry subsided.
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