November 9, 2021 was a heady day in the crypto space as bitcoin capped off a four-day rally from $60,974 to $67,707. The following day it touched $68,999 before a nearly $5000 reversal.
That top marked an technical outside day and it turned out to be a screaming sell signal.
With the news today that Binance is likely to pull out of the FTX deal after a glace at its books, bitcoin is trading at $17,153.
If that results in a disorderly bankruptcy at FTX, it will mean further position liquidations and customer losses. There's also a high chance of criminal investigations if consumers aren't made whole.
Moreover, the downfall of one of the biggest names in crypto is a devastating development for confidence in the space. There are some upsides for off-exchange bitcoin as it remains unassailable but the broader crypto eco-system and particularly de-fi will struggle.
Traders may also further recoil with bitcoin's year-over-year loss currently sitting at nearly 75%.
Technically, a break of $17,000 would be a rough blow for bitcoin and would highlight a test of $14,000, if not lower.
