A widely followed crypto analyst is looking at the wider crypto markets following this week’s FTX meltdown.
Crypto analyst Justin Bennett tells his 111,400 Twitter followers that king crypto Bitcoin (BTC) is testing a low that it hasn’t experienced since June 2022.
“BTC is retesting the June low.
Resistance for now. A reclaim would be bullish and pretty incredible given the week we’ve had, but nothing would surprise me at this point.”
With BTC trading for $17,744 at time of writing, Bennett says he doesn’t think there are many more long positions to clear out.
“I warned about the long liquidations below $18,000 when BTC was $20,800.
Even said I thought we were close to the top, which we were.
Those longs have been cleared out, and there isn’t much liquidity below this week’s low.
Extract from that what you will.”
Bennett next moves on to the US Dollar Index (DXY), an indicator of the US dollar’s strength against a basket of assets. Generally speaking, a weakened DXY usually means strength for crypto markets.
“The DXY is already down 1.8% today.
Last Friday’s 2% decline was the largest single-day percentage drop since 2015.
Crazy to have two daily candles like this in two consecutive weeks.”
Bennett also makes a bold prediction based on the DXY’s activity.
“If the DXY ends the week below 109.30, a run at the 102-103 multi-year highs seems increasingly likely.
That would be short-term bullish for risk assets.
So be careful assuming today’s crypto rally is nothing more than a bull trap.”
Bennett also looks at the total crypto market cap (TOTAL), a measure of the entire digital asset space. The trader says TOTAL is testing a level it must flip to be bullish.
“TOTAL is testing the underside of this triangle.
$850 billion is resistance. It’s also the level bulls need to reclaim for crypto to flip bullish.”
TOTAL has shot up to $900 billion at time of writing, just above the resistance level highlighted by Bennett.
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Source: https://dailyhodl.com/2022/11/10/popular-crypto-analyst-breaks-down-bitcoin-btc-and-us-dollar-strength-in-the-wake-of-ftx-fiasco/