Bitcoin’s Big Reversal After FTX Mess, Bullish CPI Data, Oversold Conditions – Bitcoin (BTC/USD)

by James · November 10, 2022

Bitcoin BTC/USD retreated around 10% on Thursday after plunging a total of 23% over the previous two 24-hour sessions as the drama surrounding FTX FTT/USD had a captivating impact on crypto trading.

Extreme fear and widespread selling occurred after it was reported that FTX mishandled customer funds.

The situation started on Sunday, then Binance CEO and founder Changpeng Zhao said he planned to liquidate all of the exchange’s remaining FTT tokens, the original crypto token of Sam Bankman-Frieds FTX trading platform.

See also: Bitcoin not scaring Coinbase users, 95% flood exchange with buy orders

Bankman-Fried is now in crisis mode, requiring $8 billion in emergency financing to keep FTX out of bankruptcy.

Binance BNB/USD and eight other trading platforms are now on a mission to provide proof of fund reserves to reassure investors worried about a wider lack of liquidity in the crypto space.

The move could lift sentiment in the sector. Technically, Bitcoin appeared to bounce because the crypto had become oversold on the daily time frame, with a relative strength index measuring in at 24%.

Consumer Price Index data released by US Bureau of Labor Statistics on Thursday morning, inflation showed lower October, coming in at 7.7% against the estimate of 8%. The news boosted the crypto sector and boosted Bitcoin from its lowest in nearly 2 years.

Do you want direct analysis? Find me in the BZ Pro lounge! Click here for a free trial.

The Bitcoin Chart: Bitcoin’s rally during Thursday’s 24-hour trading period took place within Wednesday’s trading range, which has put the crypto into an inside bar pattern on the daily chart. The pattern leans slightly bullish in this case due to Bitcoin’s oversold condition and because the crypto hasn’t posted a lower high since it reversed the trend.

If Bitcoin continues to trend higher and break out of Wednesday’s mother bar, traders will want to see if the crypto prints a bearish reversal candlestick below the November 5 high of $21,478, which would confirm a downtrend. If Bitcoin prints a higher low above $15,512 in the coming days, a new uptrend could confirm.

The upward move took place on higher-than-average volume, indicating a high level of interest from bullish traders. By noon, Bitcoin trading volume on Coinbase was measured at over 73,500 compared to the 10-day average of 43,734.

If Bitcoin closes the trading day near its intraday high, the crypto will hit a bullish Marubozu candlestick, which could indicate higher prices will come during Friday’s session. If the crypto closes with a significant upper wick, the temporary top may have occurred and lower prices may be in the cards.