Crypto wrap: Market stable even as FTX fallout claims one more victim

The cryptocurrency market remained stable despite the FTX fiasco adding crypto finance firm BlockFi to its list of victims. On November 28, BlockFi filed for Chapter 11 Bankruptcy, with over $1 billion in outstanding liabilities and over $350 million in crypto assets frozen on FTX.

"Surprisingly, the crypto market's reaction to these events was fairly neutral, and trading remained rangebound throughout the week," Parth Chaturvedi, crypto ecosystem lead at crypto app CoinSwitch, said.

The total market cap has improved marginally from $855 billion last Friday to $859 billion on December 9. Bitcoin was up 1.5 per cent in the last seven days and was trading at $17,219 on Friday, according to coinmarketcap. Ethereum was flat, gaining 0.29 per cent to $1,283.

"Bitcoin bulls have tried keeping the bar above the $17,000 level for the past seven days. Even though Bitcoin touched the $17,424 mark, bulls could not hold there for long," Alankar Saxena, CTO of crypto asset management platform Mudrex, said.

The market cap rose to $870 billion earlier this week but later fell to $833 on November 6.

"Earlier this week, there was a small pump, but any pump in current market conditions shouldn't be relied much upon as all of them are unsustainable," Vivekanand Pandey, co-founder of crypto asset management platform Kunji, said.

"The primary support driver for broader 'risk-on assets' has been the continued expectation of the Fed slowing down on its hiking cycle as inflation and employment data suggest that the economy is cooling off," Chaturvedi said.

With more and more crypto firms filing for bankruptcy, the immediate future of the crypto market remains uncertain. In 2022 alone, at least five such companies, including Three Arrows Capital, Voyager Digital and Celsius Network, have filed for bankruptcy.

What to expect next?

"The immediate support lies at $17,100, while the resistance holds at $17,280 and then $17,400. If it fails to clear the resistance, there could be a fresh bearish reaction," Saxena said.

"On the other hand, Ethereum has been trading above the $1,200 level as whales and sharks continue to add their holdings. Further growth is possible only if the rate gets to the $1,300 area and fixes there," he added.

"Next week little volatility with possible upside move should be expected, owing to the expectation of little dovish CPI print and drop in interest rate hike magnitude," Pandey said.