After the FTX bankruptcy last month, Bitcoin and cryptocurrencies are at lower levels than they have been all year and may stay that way for a long time, technical analysts at Canaccord Genuity told CNBC.
“Bitcoin and Ethereum Dropped Below Significant Support”
“The fact that Bitcoin and Ethereum fell below the key support near $18,431 and $1,256, respectively, confirms that they are in a new medium-term downtrend,” analyst Javed Mirza said in a note on Thursday.
“This is a strong technical downside and opens the door to a test of major support near $11,918 and $560 respectively, down 30% and 57% from current levels.”
A move towards these levels is “likely to bring longer-term consolidation over time,” he added. On Wednesday, Bitcoin surpassed $17,000 for the first time in two weeks, according to Coin Metrics. It also hovered around this level on Thursday morning. Ethereum was trading at around $1,200.
Mirza also said that both cryptocurrencies are experiencing a short-term, one- to two-week bounce. According to the analyst, this could push BTC and ETH higher by 27% and 15% respectively.
To confirm this short-term uptrend, the analyst says there should be a multiple-day close above the 200-day moving averages of $21,465 and $1,481 respectively. “The crypto industry bears resemblance to the internet craze of the 1990s,” Mirza said.