Bitcoin has had a rough year, with the world’s largest cryptocurrency falling to $16,600.
As we enter 2023, we may not have seen the low in BTC/USD with support at the $10,000-12,000 level.
Bitcoin – Monthly Chart
The latest headwind for BTC is the scrutiny surrounding the Binance exchange. The company seemed to be left alone at the top of the mountain after the FTX exchange collapse. However, they have only turned attention to their own finances.
Binance Coin slumped after its auditor stopped doing crypto work and backed away from its proof of reserves work in the sector. Michael Burry, the famed investor of The Big Short film, likened crypto audits to his subprime work and said they were “essentially meaningless.”
Binance executives have been working to reassure investors that the platform is safe but have faced criticism that transparency needs to be provided. Many worried about its holdings in its BNB token, which was a vital issue for FTX.
Another headwind for Binance is rumours of DOJ charges in a long-running money laundering case. Reuters claimed that the case was close to completion.
For Bitcoin, another wave of contagion could break the market further. The bottom in Bitcoin may coincide with the failure of some high-profile miners and corporate investors. For traders, there is still good volatility in the crypto sector, and they can play weakness for another dump to technical lows.
Another issue for Bitcoin will be increased regulatory scrutiny after FTX. It would get worse with problems at Binance, which has a daily trading volume of around $8bn, much more significant next to its nearest competitor Coinbase, with $1bn.
