16.11.202214:02 Forex Analysis & Reviews: Morgan Stanley: BTC may drop to $14.000

It has been over a week since the flagship cryptocurrency consolidated below the 127.2% Fibonacci retracement of $18,500. Currently, bitcoin is hovering at around $16,900 per coin. Even before the collapse of the FTX exchange, digital gold traded in the range of $19,000-20,000. In the near term, it is unlikely to fully recover. Bitcoin is now closer to its annual lows than to the levels it traded at in the past 5 months. Clearly, trust in crypto exchanges and BTC was lost in light of recent events, and it has not been regained yet. Consequently, we may expect the continuation of the downtrend.

In our view, the mark of $18,500 was a very important psychological level. Indeed, the price was unable to fall below it for 5 months. Moreover, it did not show significant growth during that time, and that would allow us to feel the presence of bulls in the market. However, we see that even after the collapse, investors are reluctant to buy the flagship cryptocurrency, which means they expect the continuation of the downtrend.

At the same time, Morgan Stanley experts say BTC may slide to $14,000. They believe the market is still digesting FTX's bankruptcy and is bracing for stronger selling pressure. Morgan Stanley does not exclude the possibility of a fall in BTC to $12,500. We assume it may go down to $12,426. In the best-case scenario, the bank's experts say, the digital asset will stay in the range of $14,000-16,000 per coin.

We have expected bitcoin to resume the downtrend for a long time. We saw it at $12,500 long before FTX collapsed and even lower afterwards. Despite an increase in risk sentiment that helped the euro and the pound to recover against the dollar, bitcoin is still at risk. Previously, bitcoin's main advantage was believed to be its decentralization and the lack of regulation from central banks. Now when the cryptocurrency is on the verge of a collapse, some stability and regulation would be a good thing ...

In the 24-hour time frame, BTC quotes finally made a successful attempt to break through the mark of $18,500. In our view, the fall may now continue to $12,426. As expected, a breakout through the descending trend line was not the end of the bearish trend, as the price moved within the sideways channel at the same time. With the lower limit of this channel broken, the quote may continue falling.