Bulls fight bears after Bitcoin leaves uptrend channel

Bulls fight bears after Bitcoin leaves  uptrend channel
Crypto
Ara Zohrabyan
Author:
Ara Zohrabyan
Published on: 19.12.2022 17:38 (UTC)
Post reading time: 1.84 min
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Bitcoin price bearish momentum seems to have been checked by bulls while the price has fallen below $16,800 after breaking out from the uptrend channel. Looks like bulls are holding on their own after bears won control and drove the price down, breaching the lower bound of the upward channel. Most likely bears will regain control currently if the sentiment is not reversed!  



Global financial markets are gripped by uncertainty  as Fed chair Powell said the central bank’s policy was “still not restrictive enough” in light of too-high inflation after the Federal Reserve raised interest rates 50 basis points on December 14. As traders worry the monetary tightening is going to tip the world economy into recession Binance withdrawals surged on concerns about Its reserves, but later reports allayed fears Binance might be exhibiting ‘FTX-like’ behavior while VanEck estimate says Bitcoin could drop to $10,000-$12,000 in coming months.   

 

Blockchain intelligence platform Nansen said last Monday Binance suffered $902 million in net outflows, the difference between the value of assets arriving and leaving the exchange. Nansen clamed Binance’s net outflow surpassed those of all other centralized exchanges’ in the 24 hours, and is almost nine times larger than the second largest outflow.

 

Couple days later the Seoul-based analytics firm CryptoQuant wrote Binance is not experiencing the same volume of outflows that FTX had in the days before its collapse. CryptoQuant estimated Binance’s Bitcoin reserves (liabilities) at 591,939 BTC with collateralization at 101% when taking the exchange's assets and debtors into account, according to on-chain data. It estimated that While withdrawals have increased, they are small compared with the exchange’s $57.4 billion reserves.   

 

VanEck report estimates that Bitcoin may “test $10,000-$12,000 in Q1 amid a wave of miner bankruptcies.” The report says the Bitcoin balance held in miner wallets has declined by over 25,000 BTC (US$444 million) since July, hitting a 14-month low of 1.818 million BTC. This is partly explained by falling Bitcoin prices as miners have to sell more Bitcoin to cover rising operation costs. And lower prices lead to miner capitulation – a situation where weak miners exit the market, selling their reserves and causing the price to drop further. 

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