FTX, the third leading crypto exchange, faced a liquidity crisis. Since then, cryptocurrencies have been in a bloodbath because many retail investors are seeking an emergency exit due to the lack of sustainability of cryptocurrencies in the long term.
After the news, Binance announced taking control of FTX by acquiring the exchange. Later they stepped down from their proposal because the situation was beyond their control. However, now Binance has announced a recovery fund to rebuild the market again because ‘Crypto is going not going away.’
They aim to reduce the cascading negative effects of the FTX on the overall crypto markets, which is why they have announced a recovery fund to help the fundamentally strong projects facing a liquidity crisis. Binance officials also invite other industry players to co-invest in this recovery fund to control the liquidity crisis for the long term.
As a leading cryptocurrency, Ethereum is less affected than many other cryptocurrencies in the industry. That suggests investors focused more on the top five cryptocurrencies than small and mid-caps. It suggests that large caps or blue-chip cryptocurrencies will recover faster.
Indeed, it is a good sign that the confidence comes back and investors are inflowing money in the crypto world rather than investing in safer bonds. Still, retail investors are worried about the future potential because the recovery funds have not been implemented yet, so it will take a few more months for this setup to bring back the investors’ confidence in the crypto industry.
At the time of writing this post, ETH was trading around the short-term support of $1260. Though ETH has broken the support, it is currently trying to regain the level, which is a positive sign during the bloodbath of cryptocurrencies.
Most technical indicators are bearish for the short term, indicating that it is not the best time to invest in ETH. However, for confident investors, a price this low is a perfect time to average their holdings. But before doing so, read the Ethereum predictions by clicking here!
On the weekly chart, Ethereum has been forming lower lows and lower highs, but this week, it is forming a green candle that suggests a positive momentum for the short term. If ETH continues the momentum, it will face resistance of around $1450; after that, it will face selling pressure that could keep the price down or consolidate within a range.
We think it is a good time to invest in ETH for the long term. However, if Ethereum breaks the resistance, you should hold it for the long term.