FX.co ★ Market concerns over situation at Binance

Bitcoin rapidly ended its uptrend on the 4-hour timeframe, which was supported for some time by the uptrend line. Currently, BTC has fallen below it. However, it doesn't really mean that Bitcoin will continue to decrease right now. The standard pattern for BTC at this point is collapse this is followed by a few weeks or months of flat, and then by another collapse. Therefore, the cryptocurrency may trade below $17,582 or $18,500 and move sideways for a few more weeks. The current local low is near $15,500. BTC may stay in this range in the near future.

However, Bitcoin may quickly resume its drop if new reports come in from the cryptocurrency industry about problems with any major companies. Over the past few weeks, there have been widespread rumors about liquidity issues at the world's largest crypto exchange, Binance. Its CEO, Changpeng Zhao, claimed that the exchange does not have any difficulties and has enough reserves to make all payments to investors. A recent report from the audit firm Mazars was expected to reassure market participants. The report said that Binance indeed has sufficient reserves and its internal controls are not in doubt. However, experts interviewed by The Wall Street Journal later questioned Mazars' report. They stated that the audit provided no insight into the accuracy of Binance's accounting and noted the company's opaque corporate structure. Afterwards, analytics platform CryptoQuant reported that the data on the exchange's collateralization was correct. Perhaps, someone really wants to sink the largest crypto exchange. Alternatively, the exchange might actually be in trouble but wants to reassure investors through falsified reports to avoid triggering a run on deposits and massive outflows.

In any case, it is quite possible that FTX was not the only exchange to misuse client funds. Other companies might also be guilty of this. Consequently, virtually any large company could face problems in the market amid a downturn lasting more than a year. We just have to wait for more news and keep track of the situation. Where there is smoke, there is fire, and if there is more smoke, Bitcoin and the entire crypto market could plunge once again. New bankruptcies may also send the market downwards.

On the 4-hour timeframe, BTC quickly finished the uptrend after consolidating below the trend line. Therefore, currently the cryptocurrency is expected to reverse downwards with a target of $12,426. There are still no signs that Bitcoin could increase strongly in the near future.