• The Securities Commission of The Bahamas (SCB) stated that it had transferred assets out of FTX’s subsidiary, FTX Digital Markets, to another digital wallet.
  • Investment firm Multicoin Capital believes that the crypto market is set to deteriorate further.
    Bitcoin (BTC) price is currently trading at $16,850 and would need to attain a 34% rally to climb back to the mid-June price of $22,500.

FTX exchange's standing continues to worsen as the bankrupt firm faces more scrutiny from regulators. The repercussions of the exchange's collapse have led to severe disruptions in the crypto market. In the wake of this situation, Bitcoin holders might decide to safeguard their investments by selling them off at this price level.

FTX's woes deepen

FTX was at the crosshair of the Securities Commission of Bahamas (SCB) earlier this week. As reported by FXStreet, the regulator joined hands with the Financial Crimes Investigation Branch to investigate FTX's misconduct. The development came after FTX stated it would begin facilitating withdrawals of Bahamian funds at the behest of the SCB, which the commission soon refuted.

However, recent revelations show that the SCB had already taken action against the exchange days before launching its investigation. In an announcement on November 17, the regulatory body stated that it took control of FTX Digital Markets' (FDM) assets by transferring them to a digital wallet controlled by the SCB. The commission stated that they did so to keep the assets safe and protect the interests of clients.

The move makes sense as FDM's management of the assets had become worrisome, and the same was also verified by the exchange's liquidators. As per court filings, Joint Provisional Liquidators suggested that the bankrupt exchange might have committed serious fraud and mismanagement.

This makes things worse for FTX and the crypto market as well, a sentiment shared by investment firm Multicoin Capital. The crypto venture firm informed its investors in a letter on Thursday that further downfall is expected before the market rebounds. 

Multicoin went on to state that the fund had already declined by 55% this month as they had too many assets on FTX. The fund believes that it might be able to recover some of its funds, but the ongoing bankruptcy proceedings will make it difficult. Furthermore, Multicoin believes that the situation could deteriorate, stating,

"Many trading firms will be wiped out and shut down."

Bitcoin price rise may not be fruitful

Bitcoin price is currently trading at $16,833, but the volatile movement could take the king coin in either direction. 

If the buying pressure remains consistent, Bitcoin price would be able to breach its immediate resistance at $17,199 to initiate an uptick to tag $17,729. However, a rise to mid-June price ($22,590) demands a rally of 34.43%, which would require Bitcoin to flip the inefficiency of $18,730 to $19,229, labeled as Fair Value Gap (FVG) into support.

June lows, which were once the support level for Bitcoin price, now represent a sell-off opportunity for stranded investors. Since BTC has stayed below the $22,590 mark for about three months now, any instance of recovery would motivate these investors to seek a break-even haven.

BTCUSD 4-hour chart

BTCUSD 4-hour chart

Based on IntoTheBlock’s Global In/Out of the Money (GIOM). the price range between $17,900 and $23,900 harbors roughly 6.21 million addresses that purchased over 3.06 million BTC at an average price of $20,509. These holders are currently sitting “Out of the Money” and will likely sell their holdings if Bitcoin price reaches its breakeven levels, triggering a reversal.

This outlook is crucial in understanding the market sentiment and coincides with the stale outlook from Multicoin Capital after FTX’s collapse.

Bitcoin between $17,900 and $23,900

Bitcoin between $17,900 and $23,900

On the other hand, if Bitcoin price does not recover at all and declines further, it would retest the $16,215 support level. Drawdown from here could see BTC tagging the critical support at $15,791, losing which could invalidate the bullish thesis, pushing the king coin toward the lows of $15,000.


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Cryptos feed Join Telegram

Recommended content

Recommended Content

Editors’ Picks

Is there more upside to Dogecoin-killer Shiba Inu’s rally after 100% gain in 90 days?

Is there more upside to Dogecoin-killer Shiba Inu’s rally after 100% gain in 90 days?

Shiba Inu token burn rate climbed by 67% since February 4. A total of 13,518,918 SHIB tokens have been burned according to the Shibburn portal. The meme coin gained 100% against competitor Dogecoin in the last 90 days. 

More Shiba Inu News

Why Bitcoin is still in a bear market and what this means for BTC price?

Why Bitcoin is still in a bear market and what this means for BTC price?

Bitcoin is currently in a bear market, according to analysts despite the massive rally of January. The selling pressure on the asset has reduced with miner inflow to exchanges declining to multi-year lows. 

More Bitcoin News

Here's what the new Dogecoin fork means for DOGE hodlers

Here's what the new Dogecoin fork means for DOGE hodlers

EthereumFair, the project that brands itself as the world’s first Ethereum fork is in talks with the Dogecoin community for a fork. The team proposes retaining DOGE’s consensus algorithm and changing the mining algorithm to make it compatible with Ethereum graphics card mining. 

More Dogecoin News

What to expect from US CFTC’s landmark crypto enforcement in 2023

What to expect from US CFTC’s landmark crypto enforcement in 2023

United States Commodity Futures Trading Commission (CFTC) Chair Rostin Behnam has said he will be continuing efforts for the agency to regulate cryptocurrencies, that is non-security tokens. In his remarks at the American Bar Association, Behnam said that the CFTC is well positioned to address regulatory gaps in crypto. 

More Crypto News

Bitcoin: Nonfarm Payrolls on the radar after Powell’s speech propels BTC higher

Bitcoin: Nonfarm Payrolls on the radar after Powell’s speech propels BTC higher

Bitcoin (BTC) price is at an inflection point as it continues to rally amid multiple sell signals on lower time frames. The Nonfarm Payrolls (NFP) report, including the unemployment rate and average hourly earnings, is set to be announced on February 3 at 1330 GMT.

Read full analysis