BTC Bears Target Sub-$15,000 on Weekend Jump in FTX Contagion Risk

Key Insights:

• Bitcoin (BTC) and ethereum (ETH) hit reverse on Sunday, with BTC ending a three-day winning streak.
• After a quiet Saturday session, FTX contagion fears resurfaced on news of FTX amounts owed to creditors.
• This morning, sentiment remained bearish, with Sunday’s news reports leaving a high degree of market uncertainty for investors to manage.

Ethereum (ETH) slid by 6.25% on Sunday. Reversing a 0.41% gain from Saturday, ETH ended the week down 6.51% to $1,140. Notably, ETH ended the day at sub-$1,150 for the first time since November 9.

A bullish start to the day saw ETH rise to an early high of $1,225. Coming up short of the First Major Resistance Level (R1) at $1,233, ETH slid to a late low of $1,130. ETH fell through the day’s Major Support Levels to end the session at sub-$1,150.

On Sunday, bitcoin (BTC) fell by 2.50%. Reversing a 0.06% gain from Saturday, BTC ended the week down 0.41% to $16,278. Notably, BTC ended a three-day winning streak while avoiding sub-$16,000.

A mixed start to the day saw BTC rise to an early high of $16,742. Coming up short of the First Major Resistance Level (R1) at $16,825, BTC slid to a late low of $16,184. BTC fell through the First Major Support Level (S1) at $16,552 and the Second Major Support Level (S2) at $16,408 to end the day at sub-$16,200.

On Friday and Saturday, BTC and ETH moved within tight ranges. Investors were in wait-and-see mode, with the markets anticipating more fallout from the collapse of FTX.

On Sunday, the mood soured, with news media outlets reporting the amounts that FTX owes to creditors. According to reports from the weekend, FTX owes close to $3.1 billion to its top 50 creditors and $1.45 billion to its top ten creditors.

The figures reveal a sizeable concentration risk on the part of creditors, raising the fear of further bankruptcies.

This morning, the mood remained bearish. After news hit the wires of FTX planning an asset sell-off and restructure, uncertainty remains over the final loss for creditors.

With investor confidence severely dented, the markets will need clarity on the final amount owed to creditors and the identity of the creditors to gauge the full impact of the FTX collapse.

Ethereum (ETH) Price Action

At the time of writing, ETH was down 1.62% to $1,122. A bearish start to the day saw ETH fall from an early high of $1,142 to a low of $1,108.

Technical Indicators

ETH needs to move through the $1,165 pivot to target the First Major Resistance Level (R1) at $1,200 and the Sunday high of $1,225. An ETH return to $1,200 would signal a bullish afternoon session. However, the crypto news wires and the NASDAQ Composite Index need to provide support.

In the event of an extended rally, ETH would likely test the Second Major Resistance Level (R2) at $1,260. The Third Major Resistance Level (R3) sits at $1,355.

Failure to move through the pivot would leave the First Major Support Level (S1) at $1,105 in play. However, barring another extended afternoon sell-off, ETH should avoid sub-$1,000. The Second Major Support Level (S2) at $1,070 should limit the downside.

The third Major Support Level sits at $975.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. Ethereum sat below the 50-day EMA, currently at $1,224. The 50-day EMA slid back from the 200-day EMA, with the 100-day EMA easing back from the 200-day EMA, delivering bearish signals.

A move through R1 ($1,200) would bring the 50-day EMA ($1,224) and R2 ($1,260) into play. However, failure to move through the 50-day EMA would leave ETH under pressure.

Bitcoin (BTC) Price Action

At the time of writing, BTC was down 1.65% to $16,009. A bearish morning saw BTC fall from an early high of $16,305 to a low of $15,890.

BTC fell through the First Major Support Level (S1) at $16,061.

Technical Indicators

BTC needs to move through S1 and the $16,401 pivot to target the First Major Resistance Level (R1) at $16,619 and the Sunday high of $16,742. A return to $16,500 would signal a bullish session.

In the event of an extended rally, BTC would likely test the Second Major Resistance Level (R2) at $16,959 and resistance at $17,000. Crypto news updates need to be BTC-friendly to support a return to $16,500.

The Third Major Resistance Level (R3) sits at $17,517.

Failure to move through S1 and the pivot would leave the Second Major Support Level (S2) at $15,843 in play. Barring another extended sell-off, BTC should avoid sub-$15,000. The Third Major Support Level (S3) at $15,285 should limit the downside. However, negative FTX-related news could send BTC to sub-$15,000.

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bearish signal. This morning, bitcoin sat below the 50-day EMA, currently at $16,822. The 50-day EMA slid back from the 200-day EMA, with the 100-day EMA falling back from the 200-day EMA, delivering bearish signals.

A BTC move through R1 ($16,619) would give the bulls a run at the 50-day EMA ($16,861) and R2 ($16,959). However, failure to move through the 50-day EMA would leave BTC under pressure and sub-$15,000 in play.