Who Remembers FTX? (Important Analysis) [Bitcoin Sentiment]

Good morning everyone!

For those who don't know me, I'm Alkaline. I write financial articles for free on MooMoo and post all of them on Medium. I trade stocks, options, futures with a spash of crypto on the side. I also enjoy tape reading, charting, and learning whatever I can about markets. I have different series called The Market, Deep Dives, and Deep Charts.

With that said, let's take an elevated look at Bitcoin Sentiment.

If you have been in markets during last November, you are probably aware of FTX, it's collapse, and how Bitcoin + other cryptocurrencies reacted.

Bitcoin reached it's lowest point since 2020.

Headlines came out about how Bitcoin was going to 0

Congress expressed their disaproval of Bitcoin

SEC Chairman Gary Gensler, an advocate against Bitcoin, basically said "I told you so" when Bitcoin headed for the lows

Investors were selling crypto left and right

The term "Not My Keys Not My Crypto" was spreading fear about owning crypto through a brokerage

Overall, markets were bearish on Crypto, but how did they respond?

Bitcoin BALLOONED right back up to $60,000 where we currently are.

But what does that mean today?

Yesterday, coinbase announced that they had accounting error which reported over $700 Million in crypto liquidations.

What happened to Bitcoin?

There was a "huge" sell off. But did that stop Bitcoin? No

Well, whats my point?

There is a strong bullish sentiment with Bitcoin. Whether from FTX, or from Coinbase's asset interference resulting in "Bitcoin liquidations", buyers still stepped in and kept Bitcoin from crashing. This tells me that there is a lot of belief in Bitcoin. If FTX was not enough to send Bitcoin lower than 10K when it was already down tremendously from the highs, then Coinbase itself is not going to get investors to sell either. Not only that, but there has been a ton of bearish news about Bitcoin recently as well.

With articles hitting the newswires about the "Bitcoin Halving", buyers were not done yet. This improves the bullish sentiment about Bitcoin overall as holders are looking to sell at the next all time highs. With confidence in their shoes, it would seem like the majority of crypto holders are looking for the next move, and not much can stop it from getting there. If FTX could not send Bitcoin to the lower lows, Coinbase certainly won't either. It would take a much larger catalyst to do so as it would appear that Bitcoin is overall more stable than expected.

Each time news comes out about Bitcoin, whether bearish or bullish, it continues to trend higher and higher. This is how bitcoin is prices on the front end. Bitcoin's price is 3/4 parts network and ecosystem, and 1/4 parts confidence. It has to be this way in order for it to stay decentralized. That is an important factor to consider. Investors and traders must remember that Bitcoin is not a stock, it has no earnings report. It has no governed performance metric, there is no EBITA lol. The price Bitcoin is at is just as reliant on the overall sentiment and confidence that it belongs there by the majority of buyers, as the SPY is reliant on the economy, macro and micro economics, and Jerome Powell lol.

Bitcoin 5 Minute

I already mentioned I expect some sort of pullback before moving higher, as this is a very typical breakout strategy. Right now, Bitcoin is forming a rising wedge on the day, and there is a lot of buy side liquidity to the downside. I would not be suprised if the price reached that liqudity, allowing more buyers to enter before reaching the all time highs.

What does this look like?

The brief wick looks like a signal for a downward move, but because of the large buying liquidity, the price rejected off the liquidity back to the upside. This does not alway happen, but I would not be suprised if buyers wanted to fill their orders again at these zones of liquidity.

Pullbacks are expected, and I think we might see one. But remember, if FTX, the SEC, and Coinbase can't bring Bitcoin to the lows, then the overall sentiment is bullish and would need a much larger catalyst for it to start a downward trend. However, for now Bitcoin is in an area of Bullish confidence.

Thank you for reading, and have a great day in markets