Bitcoin Takes #1 Spot Amid Crypto Market Turmoil – Top 3 Coins to Watch for November 14th – November 20th
We are in the midst of a chaotic period for the cryptocurrency markets. The sudden collapse of the FTX exchange and its subsequent Chapter 11 bankruptcy filing has shaken investor confidence and crashed the prices of many cryptoassets. Let’s take a look at 3 cryptocurrencies that will be particularly interesting to follow in the next few days.
3. Solana (SOL)
Solana is a high-performance blockchain platform with smart contract capabilities. After launching its mainnet in 2020, Solana has emerged as one of the most credible competitors to Ethereum in the smart contract sector. Solana uses a Proof-of-Stake consensus mechanism combined with innovations such as Proof-of-History, which allows the blockchain to handle thousands of transactions per second while keeping costs low for users. The Solana project has attracted high-profile backers such as Alameda Research, Polychain and Andreessen Horowitz.
Why Solana? SOL markets will be fascinating to watch in the wake of FTX collapse
The FTX crisis has had a devastating effect on the SOL market. After rumors of potential insolvency of FTX and Alameda Research began to intensify early this week, SOL holders began selling their coins en masse as it became more likely that Alameda would have to sell its significant SOL holdings to access liquidity. The massive selling pressure unleashed in the Solana market brought the SOL price from around $36 on November 6th all the way down to a local low of $10.90 on November 9th.
FTX and Alameda Research have invested in several Solana-based projects, and the Solana ecosystem will lose an important supporter if the two companies really do collapse. As more details about the FTX / Alameda Research saga come out, the SOL markets will certainly be worth watching over the next few days.
Despite the recent chaos, however, there have still been positive signs showing that the Solana project has long-term goals. The Solana Mobile project is still ongoing, and the launch of the Solana-friendly Saga smartphone is expected in early 2023. According to an update on the Solana Mobile website, Ledger will integrate support for the Solana Mobile Stack (SMS) into its Ledger Live wallet software. In addition, Helium will provide a free 30-day subscription to the Helium Mobile 5G network to Saga phone owners in the US.
November 5, Google Cloud revealed that they run a Solana validator. Google’s cloud computing arm also said that next year, customers will be able to launch dedicated Solana nodes on Google Cloud.
2. BNB (BNB)
BNB is a token launched by the Binance cryptocurrency exchange in 2017. BNB has two main functions. Holders of the token get access to special benefits when using Binance – this includes lower trading fees, access to the exchange’s Launchpad and Launchpool programs, cashback on Binance Visa card purchases and more. The token is also used as the native resource of the BNB Chain blockchain. BNB Chain is a variant of Ethereum that offers significantly lower transaction fees to users, and it allows developers to easily deploy EVM-compatible decentralized applications. Formerly known as Binance Coin, BNB has now undergone an extensive rebranding.
Why BNB? Binance is ready to strengthen its position
With the collapse of FTX, Binance is poised to take an even bigger share of the cryptocurrency market, where it already holds a dominant position. Although Binance has intentionally distanced itself from the business and the BNB token in recent years, BNB is still widely used in Binance’s products and is seen by many crypto investors as an indirect way to bet on Binance’s success.
Binance recently announced its intentions to publish Merkle tree-based proof of funds, which could help bolster trust in the exchange at a time when trust in centralized cryptocurrency exchanges may very well be at an all-time low.
It is worth keeping in mind that the massive price crash of FTX’s FTT token may have soured crypto investors on exchange tokens in general, which could also have a negative impact on BNB. However, BNB is used as the native asset on the popular BNB Chain blockchain platform, which may make it more robust than other exchange tokens.
1. Bitcoin (BTC)
Bitcoin was the first cryptocurrency ever invented and remains the most valuable crypto asset on the market to this day. Bitcoin has a fixed supply limit of 21 million coins, and new coins enter circulation in a predictable manner – for this reason, some investors see Bitcoin as a digital alternative to gold. The Bitcoin network is maintained by “miners” who deploy their hardware to solve computationally intensive mathematical problems and compete with each other to add the next block to the Bitcoin blockchain.
Bitcoin pioneered blockchain technology and provides a censorship-resistant and highly secure network that allows users to send value to each other worldwide on a 24/7 basis. The network has operated successfully since its launch in early 2009.
Why Bitcoin? Tough market conditions can give us a better idea of where BTC might bottom
Although the FTX / Alameda saga has captured practically all the attention in the cryptocurrency markets recently, we should not forget that Bitcoin still reigns supreme in crypto. During the market turmoil, BTC briefly fell below the $16,000 level. Buyers stepped in to provide support at $15,800 and the positive US inflation news provided a timely boost to bring BTC back above $17,000.
In the 2018 Bitcoin bear market, BTC bottomed at about $3,200 from a peak of $20,000 – a decline of around 84%.
Bitcoin set its current all-time high in November 2021, at a price of approximately $68,700. If the price were to retrace 84% from this peak, Bitcoin would trade at around $11,000. This suggests that there may still be significant room for to fall for Bitcoin (assuming the retracement will be as deep as it was in 2018).
The collapse of FTX and Alameda Research is expected to have a domino effect on many players in the crypto industry – for example, crypto lender BlockFi announced on November 11 that the company is “unable to conduct business as usual” and froze withdrawals until further notice.
With the full extent of the FTX meltdown still unknown, it is probably wise to be prepared for a scenario where the BTC price goes even lower. In the meantime, it will be worth watching the traditional markets for positive signs that could also result in a more optimistic outlook for BTC.
