News Updates November 18, 2022

1. FTX Collapse Leaves Total Crypto Market Cap Under $800B, Close to 2022 Low
The debacle involving Sam Bankman-Fried's crypto empire has triggered a slide in cryptocurrency prices that wiped out some $183 billion of value from digital assets this month. With investor confidence in cryptocurrencies ebbing as a result of the collapse of Sam Bankman-Fried’s FTX exchange, the total market capitalization of digital assets has fallen this month below $800 billion, a level not seen since early 2021, according to data from TradingView.
The latest wave of turmoil in digital-asset markets shaved some $183 billion from the industry market cap. The figure dropped to $736 billion on Nov. 9, the lowest since January 2021.The decline came as the FTX drama sent prices for bitcoin and other cryptocurrencies into a fresh tailspin. Bitcoin (BTC), the largest cryptocurrency, fell 22% during the seven days through Nov. 13, its worst weekly performance in five months.

Bitcoin now makes up $319 billion worth of the entire cryptocurrency market's capitalization. At the peak of the bull market about a year ago, when bitcoin reached its all-time high around $69,000, its market value was north of $1 trillion.

The debacle involving Sam Bankman-Fried's crypto empire has triggered a slide in cryptocurrency prices that wiped out some $183 billion of value from digital assets.

Total crypto market capitalization, by month. 

With investor confidence in cryptocurrencies ebbing as a result of the collapse of Sam Bankman-Fried’s FTX exchange, the total market capitalization of digital assets has fallen this month below $800 billion, a level not seen since early 2021, according to data from TradingView.

The latest wave of turmoil in digital-asset markets shaved some $183 billion from the industry market cap. The figure dropped to $736 billion on Nov. 9, the lowest since January 2021.

The decline came as the FTX drama sent prices for bitcoin and other cryptocurrencies into a fresh tailspin. Bitcoin (BTC), the largest cryptocurrency, fell 22% during the seven days through Nov. 13, its worst weekly performance in five months.

Bitcoin now makes up $319 billion worth of the entire cryptocurrency market's capitalization. At the peak of the bull market about a year ago, when bitcoin reached its all-time high around $69,000, its market value was north of $1 trillion.

The entire crypto market capitalization hit the $3 trillion mark then but has been declining since.

The price of bitcoin is down 5% over the last seven days and has been trading in a range of $15,000-$17,000.

During previous market crashes the total market cap of the cryptocurrencies also lost considerable ground. In July 2021, total market cap fell to $1.1 trillion after reaching highs of $2.5 trillion in May that year.   
 
 

The debacle involving Sam Bankman-Fried's crypto empire has triggered a slide in cryptocurrency prices that wiped out some $183 billion of value from digital assets this month.

 
Total crypto market capitalization, by month.With investor confidence in cryptocurrencies ebbing as a result of the collapse of Sam Bankman-Fried’s FTX exchange, the total market capitalization of digital assets has fallen this month below $800 billion, a level not seen since early 2021, according to data from TradingView.
The latest wave of turmoil in digital-asset markets shaved some $183 billion from the industry market cap. The figure dropped to $736 billion on Nov. 9, the lowest since January 2021.
 
The decline came as the FTX drama sent prices for bitcoin and other cryptocurrencies into a fresh tailspin. Bitcoin (BTC), the largest cryptocurrency, fell 22% during the seven days through Nov. 13, its worst weekly performance in five months.
Bitcoin now makes up $319 billion worth of the entire cryptocurrency market's capitalization. At the peak of the bull market about a year ago, when bitcoin reached its all-time high around $69,000, its market value was north of $1 trillion.
 
The entire crypto market capitalization hit the $3 trillion mark then but has been declining since.
The price of bitcoin is down 5% over the last seven days and has been trading in a range of $15,000-$17,000.
During previous market crashes the total market cap of the cryptocurrencies also lost considerable ground. In July 2021, total market cap fell to $1.1 trillion after reaching highs of $2.5 trillion in May that year.

2. Exchanges rushed to show proof of reserves. It's not enough.

Centralized exchanges still standing after the fall of FTX rushed to show proof of reserves. It's a nice show, but it's not enough, experts say.

Proof of reserves — or showing exactly what an exchange holds — is an attempt at the type of transparency that was, as recent bankruptcy filings showed, badly lacking at FTX. And so to reassure customers in the wake of the failed exchange's collapse last week, exchanges including Binance, OKX and Crypto.com held up their proof amid social media choruses of "not your keys, not your crypto" and calls for greater clarity around the reserves of such exchanges.  

On the face of it, the transparency is a welcome move. But proof of reserves is just a single snapshot and doesn't show the full picture, experts say.

Assets are shown at a fixed point in time, which gives opportunities for manipulation, Bank of America wrote in a Nov. 17 note regarding proof of reserves.

What's missing?

The exercise also has limited value because it's just a single facet of many interconnected financial metrics, Wayne Trench, CEO of exchange OSL, said.

"They don't reveal audited fiat reserves, client and company liabilities, company loans, or much of the other required information necessary to ascertain a firm's financial health," Trench noted.  

OSL is owned by BC Technology Group, a public company based in Hong Kong that is subject to regulations and regular audits. While acknowledging that traditional structures aren't bulletproof either, the company stressed that regular and transparent audits, the segregation of client assets in bankruptcy remote trusts, and being subjected to tier-one regulatory supervision and oversight currently provide significantly higher levels of investor protection.   

3. Here’s How Some FTX Account Holders Can Get Their Money Back – But Time Is Running Out
Entrepreneur Joshua Browder, CEO of robo-lawyer DoNotPay, said certain customers have a chance if they file a Schedule E tax form.

Some FTX account holders can get their investments back, but they will have to act fast, according to Joshua Browder, CEO of DoNotPay, a chatbox that offers legal advice.
The entrepreneur told CoinDesk TV’s “First Mover” program on Friday that users can get the money back if they file a “Schedule E” tax form with their bank, but only if their accounts were funded by an ACH direct deposit or credit card in the past 60 days.
ACH transactions, or Automated Clearing House network, is an electronic bank-to-bank payment method. DoNotPay is offering the exchange’s account holders a way to get back their funds free of charge in part because it received an investment from FTX several months ago.

4. Can Bitcoin bulls trigger a new rally to $18,000 as bears lose momentum?

Amid increased fears of a further price correction, Bitcoin (BTC) has managed to find some stability below the $17,000 level after days of a tussle between bulls and bears. The asset is looking for a price uptrend after the heightened volatility caused by the FTX cryptocurrency exchange collapse has, for now, at least subsided. 

 
With the newfound stability, Kitco News analyst Jim Wyckoff on November 18 noted that Bitcoin was facing a threat of a downside price breakout. However, based on recent price movement, the flagship cryptocurrency appears to have acquired new strength helping contain any further losses. 

“Recent price action had formed a bearish pennant pattern on the daily bar chart. However, the bulls have stabilized prices to prevent a bearish downside price “breakout” from the pattern. Bulls have now gained a slight bit of strength late this week, but the bears still have the overall near-term technical advantage,” Wyckoff said. 

Bitcoin exhausts downward momentum 

Furthermore, Bitcoin appears to have exhausted its downward momentum as the asset seeks to build on the support level formed at $16,200. However, Bitcoin is still trading below the $18,000 level, which acted as a key support position in recent weeks. 

Bitcoin technical analysis
Despite Bitcoin’s short-term stability, the asset’s technical analysis remains bearish, with the summary aligning with ‘sell’ at 14. For moving averages, recommend a ‘strong sell’ at 13, while oscillators are ‘neutral’ at eight on the daily gauges. 

In the meantime, Bitcoin was trading at $16,600, representing gains of less than 1% in the last 24 hours. At the same time, the weekly chart indicates losses of about 1.70%.

5. Did Bitcoin Bottom or Is Another Drop to $15K in Play? (BTC Price Analysis)

It’s clear that the market remains fearful of potential contagion from the FTX fallout. As a result, market participants are offloading their assets from the exchanges, which might trigger the last phase of this bearish cycle’s capitulation.

Technical Analysis

The Daily Chart
The market has likely entered a new phase of short to mid-term consolidation as the price dropped significantly. Nevertheless, during the consolidation phase, the price might retest the $18K-$19K region and then continue the bearish toward the $15K level.

On the other hand, the 100-day moving average, standing at $19K, also aligns with the broken trendline, making this static level a powerful resistance. Hence, a consolidation toward the 100-day moving average and the broken trendline at the $18K-$19K price range will be the most probable scenario for Bitcoin in the short term.

The 4-Hour Chart

Typically, the market enters a consolidation phase after an expansion move and forms continuation correction patterns. As the following chart depicts, the price has formed a triangle pattern after the recent shakeout and is about to break the pattern to the top. In case of a breakout, the price will likely experience a spike.

Furthermore, during the recent drop, an imbalance has been formed in the 4-hour timeframe between the $18.7K and $19.2K levels, which also aligns with the well-known 61.8 level of the Fibonacci retracement for the recent bearish rally, making it a significant resistance. Accordingly, The price will probably consolidate toward the $18.5K-$19.2K region and use the existing imbalance to continue the bearish trend toward the $15K support.

6. Co-Founder of Russia’s Largest Crypto Pyramid Finiko Arrested in UAE.

One of the founders of Russia’s most notorious Ponzi scheme in recent times, Finiko, is in detention in the United Arab Emirates, according to a Russian media report. The close associate of the crypto pyramid’s mastermind left the Russian Federation as the scam collapsed last summer.

UAE Authorities Review Russian Extradition Request for Top Finiko Member
Zygmunt Zygmuntovich, a co-founder and high-ranking representative of arguably the largest Ponzi scheme in Russia since MMM in the 1990s, has been captured in the United Arab Emirates (UAE), the Russian portal “Business Online” reported on Thursday. The arrest has been confirmed by Russia’s Prosecutor General’s Office.

According to the publication, the 24-year-old man, a German national, has been held in a prison in the Gulf state since early September. Russian prosecutors told the news outlet they were informed about his detention by the local Interpol bureau. Russia has already filed an extradition request with the country’s Ministry of Justice which is currently under consideration by the competent authorities in Abu Dhabi.

Zygmuntovich was put on an international wanted list when Russian law enforcement launched a criminal investigation into the fraudulent investment scheme, along with Marat Sabirov and Edward Sabirov, two other associates of Finiko’s founder Kirill Doronin, who has been in jail since July 2021. The three men managed to leave Russia as the financial Pyramid was crumbling.

The whereabouts of the Sabirovs are unknown at this point in time and the exact circumstances in which Zygmuntovich was arrested are also unclear. But knowledgeable sources have told “Business Online” that his two former partners might have tipped off security forces about his location.