Bitcoin stable at $16k, bottomed out and will rise to $21k?
- Bitcoin (BTC) price is consolidating around $16,700, raising hopes that the bottom is in.
- According to several analysts, the FTX collapse contagion will not keep BTC down for long.
Over the past few days, the Bitcoin (BTC) market has found some stability around the $16,700 price, giving optimism among analysts that the bottom is in and the worst of the FTX contagion is over.
Jan Wüstenfeld, an independent Bitcoin market analyst, wrote that the FTX collapse is even likely to have a long-term positive effect on the price of BTC. One reason for his belief is the revelation that FTX had no actual Bitcoins that it will have to liquidate, as it operated a partial reserve based on paper Bitcoins.
Take yours #Bitcoin without exchange!
For your own good, and so they can’t issue fake paper Bitcoin anymore.
That way, Bitcoin can return to true price discovery. pic.twitter.com/TX1NebUPjg
— Jan Wüstenfeld (@JanWues) 16 November 2022
Other analysts have also pointed out that FTX and Sam Bankman-Fried bowing out of the market is a net positive, as the exchange’s CEO had anti-Bitcoin tendencies. The market now puts articles from SBF criticizing Bitcoin in a better perspective and points to his links to politicians who have worked against the crypto industry.
According to Bitcoin bull Nayib Bukele, the president of El Salvador, FTX was the exact opposite of Bitcoin as the cryptocurrency was created to prevent Ponzi schemes. Bukele said in a tweet;
FTX is the opposite of Bitcoin. Bitcoin’s protocol was created precisely to prevent Ponzi schemes, bank runs, Enrons, WorldComs, Bernie Madoffs, Sam Bankman-Frieds, bailouts and redistribution of wealth. Some get it, some don’t yet. We are still early,
Strong bullish sentiment for BTC returning to the market
The shared sentiment of Bukele and Wüstenfeld is the basis for several other market analysts also noting strong bullishness for BTC and expecting the price to return to $21,000 and higher. This is notable as this is not the first time centralized entities have caused a market collapse since BTC has recovered.
Apart from FTX, the market has gone through the collapse of entities such as Terra and Celsius Network. And each time, the market flight of the dubious altcoins has only made a stronger case for BTC adoption.
FTX collapse makes this bear market shorter no longer.
— Murad (@MustStopMurad) 17 November 2022
According to on-chain data, BTC is already seeing increased demand and a shift in the relationship investors have with centralized exchanges. Data from chain monitoring resource Coinglass shows that exchanges are seeing sharp BTC balance reductions.
Similarly, BTC institutional funds have also seen inflows in recent weeks. According to Coinshares’ report which noted weekly inflows into institutional funds totaling $42 million, investors see the FTX collapse as an opportunity.
“The inflows began later in the week on the back of extreme price weakness resulting from the FTX/Alameda collapse,” wrote James Butterfill, head of research at CoinShares.
Related: BREAKING: SBF Says FTX Has $9B Liquid Assets and Wants to Restart – Fake News or Real?