Bitcoin Price May Still Drop 40% After FTX’s ‘Lehman Moment’: Analysis

Bitcoin (BTC) saw further rejection to $17,000 on Nov. 18 as jittery markets bore more fallout from FTX.

BTC/USD 1 hour candlestick chart (Bitstamp). Source: TradingView

BTC gets a $12,000 price target

Data from Cointelegraph Markets Pro and TradingView showed that BTC/USD failed to flip $17,000 to support, a trend that has been in place for almost a week.

The pair, like major altcoins, remained firmly shackled by cold feet over the FTX debacle and its fallout for various crypto firms.

For analysts, the outlook remained grim, with already gloomy forecasts worsening in light of recent events.

“This underperformance of all crypto assets is here to stay until most of the uncertainty has cleared up, probably only around the turn of the year,” trading firm QCP Capital wrote in its latest circular to Telegram channel subscribers. that day.

In a lengthy market roundup, QCP wrote that its price forecasts for both Bitcoin and Ether (ETH) now had to drop to reflect the impact of FTX.

Updating an Elliott Wave theory-based forecast from June, he confirmed that BTC/USD now had a target of $12,000 and ETH/USD $800.

“As a side note, crypto markets have been trading similarly to commodities since the 2017 high, with extended Wave 5s being the longest wave,” the post added.

“Therefore, such potential price action with new lows in the new year would be characteristic of previous bear market sell-offs.”

An accompanying chart highlighted the divergence between cryptocurrencies and stocks in November, the correlation between them being firmly shaken thanks to underperforming cryptocurrencies.

BTC/USD vs. ETH/USD vs. S&P 500 chart. Source: QCP Capital

Meanwhile, popular trader and analyst Cantering Clark pointed out that if the current bear market in risky assets were to copy the global financial crisis, there would still be huge losses.

“The Lehman bankruptcy was the climax of the 2008 financial crisis. Qualitatively it was background material, but the market stopped and then committed to go down 40%,” part of a tweet. read.

“Never say never, and don’t let your guard down.”

Annotated chart of the S&P 500. Source: Cantering Clark/Twitter

As Cointelegraph reported, $13,500 has also become a popular downside target.

The crypto pie “is being cut massively”

Continuing, QCP also raised concerns about declining volumes and open interest (OI) on centralized (CEX) and decentralized (DEX) exchanges.

Related: US Cryptocurrency Exchanges Lead Bitcoin Exodus: Over $1.5B in BTC Withdrawn in One Week

“So far, CEX derivatives trading volumes have been hit the hardest. Combined futures OI is now back to pre-2021 levels, a massive step back for the industry,” he wrote.

Bitcoin futures open interest chart. Source: QCP Capital

On the subject of DEXs, he said that the data “implies that the entire crypto pie is being cut massively.”

“Overall, DeFi TVL is now less than 1/4 of last year’s peak!” the post is summarized along with more explanatory graphics.

“Even DEXs, which would be expected to gain more, have only seen volumes rise to July/Aug levels, even with all the emergency tokens/stables/chain swap due after FTX.”

DEX volumes chart. Source: QCP Capital

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