What will trigger the next collapse in the crypto market? Here is a forecast by Mark Cuban, the billionaire investor, owner of the NBA team Dallas Mavericks, and a star of the reality show Shark Tank. According to Cuban, the next implosion in the crypto market could be caused by the discovery and removal of wash trades on centralized exchanges. This refers to FTX-style fraud committed by centralized exchanges. FTX's scheme resulted in a loss of billions of dollars of client funds.
"I think the next possible implosion is the discovery and removal of wash trades on central exchanges. There are supposedly tens of millions of dollars in trades and liquidity for tokens that have very little utilization," Cuban said. "I don't see how they can be that liquid." However, the Shark Tank's star added that he had no definite proof to back his words up.
Wash trading has long been a concern with cryptocurrency exchanges attempting to inflate their trading volumes. The Securities and Exchange Commission (SEC) prohibits wash trades, and regulators worldwide are increasingly cracking down on wash trading involving cryptocurrencies.
Kim Grauer, director of research at blockchain analytics firm Chainalysis, said in September 2022 that wash trading in the crypto space was "a legal gray area that we're all trying to figure out how this should be regulated and what's illegal."
Marc Cuban is a die-hard supporter of Bitcoin and considers it a very good investment. Earlier, he called gold investors "dumb". Cuban also revealed that he invests in crypto because he expects smart contracts to have a significant impact on the society, reducing its dependence on banks and governments.
On the technical side, Bitcoin's breakout above the key level of $17,460 has pushed the instrument into the $18,300 area, which will be the focus of today's trading session. Amid today's US inflation data release, a breakout of this level will push BTC up towards the next key resistance level of $18,720 and open the way towards testing $19,360. If Bitcoin comes under renewed pressure and drops below $17,400, it could then slide down towards $16,600 and $15,560. A breakout below these levels will send BTC down towards $14,650 and $14,370.
Ethereum bulls aim to break above the closest resistance at $1,420. It would be enough to move ETH out of its sideways trend, which began around November 6, and end the bearish wave. A consolidation above $1,420 would rebalance Ethereum, opening the way to a high of $1,570. A more distant target is $1,675. If the pressure on the trading instrument returns and ETH breaks through the support at $1,310, the recently formed level of $1,198 will come into play. A breakout below that level will push the trading instrument to the low of $1,073. Below $1,073 lie $999 and $934, and a drop towards these levels would be quite painful for cryptocurrency holders.