Crypto Signals Brief for November 21: Will DEX and DeFi Protocols Benefit from the FTX Drama?

Last Week’s Market Wrap

Cryptocurrencies were consolidating in a range after the decline in August/September and they even started to turn bullish and make some decent gains toward the end of October. But, the FTX bankruptcy hit the market hard earlier this month and we saw another bearish move in the crypto market, which broke the recent range, although Ethereum held above $1,000 this time.

Although there has been no ensuing contagion that threatens to pull many other centralized crypto exchanges down with it which is a positive thing. Another positive thing with the record outflows from exchanges in fear that something similar to FTX might occur has been the uptick in decentralized exchange (DEX) activity and inflow to DeFi (decentralized finance).

This Week’s Market Expectations

So, after the events that have occurred this month following the collapse of FTX and the forced selloff to Binance, the trust in centralized exchanges could erode, which would push the current and next wave of crypto investors to embrace the more Web3-focused decentralized exchanged (DEX) and DeFi protocols.

Market sentiment has been a factor in cryu[ptocurrencies in the last two months as they were behaving as a typical risk asset. But, after the FTX event and the latest crash two weeks ago, the crypto market is following its own course and has been consolidating. So, we will see if this will continue this week or if cryptocurrencies will follow risk sentiment.

Cryptocurrencies attempted to turn bullish in October as we mentioned above, but the bullish momentum ended with a crash lower after the FTX exchange drama which was acquired by Binance, with FTX’s token FTT heading toward $1. The selling has stopped and crypto coins are trading in a range again but buyers are nowhere to be seen either.

BITCOIN Testing the 50 SMA

Bitcoin lost moe than 25% of its value as it crashed lower two weeks ago, falling to $15,600 from above $22,000. Buyers returned pretty fast after the crash but the 20 SMA (gray) stopped the climb and provided resistance for some time on the H4 chart and was pushing the highs lower, while now it is the 50 SMA (yellow) that is acting as resistance. So, buyers will become more confident when this moving average gets broken.

BTC/USD – H4 chart

ETHEREUM Steady Between $1,200 and $1,300

Ethereum pushed above $1,660 early last week before the FTX bankruptcy sent ETH crashing lower and despite attempts to turn bullish, sellers still remain in control, but buyers are slowly regrouping. They have tested the 50 SMA (yellow) on the H4 chart, but it rejected the price and now is stands as resistance.