Bitcoin (CRYPTO: BTC) rebounded about 10% on Thursday after plunging a total of 23% over the course the previous two 24-hour sessions where the drama surrounding FTX (CRYPTO: FTT) had a captivating impact on crypto trading.
Extreme fear and widespread selling occurred after it was reported that FTX mishandled customer funds.
The situation kicked off on Sunday, when Binance CEO and founder Changpeng Zhao said he planned to liquidate all the exchange’s remaining FTT tokens, the native crypto token of Sam Bankman-Fried's FTX trading platform.
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Bankman-Fried is now in crisis mode, requiring $8 billion in emergency funding to keep FTX out of bankruptcy.
Binance (CRYPTO: BNB) and eight other trading platforms are now on a mission to provide proof of fund reserves to calm investors who are worried about a more extensive lack of liquidity in the crypto space.
The move may lift sentiment in the sector. Technically speaking, Bitcoin looked set 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 the U.S. Bureau of Labor Statistics on Thursday morning showed inflation ticked lower in October, coming in at 7.7% versus the 8% estimate. The news provided momentum to the crypto sector and boosted Bitcoin up from its almost 2-year low.
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The Bitcoin Chart: Bitcoin’s surging price on during Thursday’s 24-hour trading period was taking place within Wednesday’s trading range, which has set the crypto into an inside bar pattern on the daily chart. The pattern leans slightly bullish in this case because of Bitcoin’s oversold conditions and because the crypto hasn’t printed a lower high since negating its uptrend.
- If Bitcoin continues to trend higher and breaks up from Wednesday’s mother bar, traders will want to see if the crypto prints a bearish reversal candlestick under the Nov. 5 high of $21,478, which would confirm a downtrend. If Bitcoin prints a higher low above $15,512 over the coming days, a new uptrend may confirm.
- The move higher was taking place on higher-than-average volume, which indicates a high level of interest from bullish traders. As of midday, Bitcoin’s trading volume on Coinbase was measuring in at over 73,500 compared to the 10-day average of 43,734.
- If Bitcoin closes the trading day near its high-of-day price, the crypto will print a bullish Marubozu candlestick, which could indicate higher prices will come during Friday’s session. If the crypto closes with a substantial upper wick, the temporary top could have occurred, and lower prices could be in the cards.
- Bitcoin has resistance above at $19,915 and $20,545 and support below at $17,580 and $16,000.
