Bitcoin Price Hits 2-Week Low As FTX Bank Run Drains BTC Reserves

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bitcoin (BTC) and crypto markets fell sharply on Nov. 8 as contagion from the FTX debacle spread.

BTC/USD 1-day candle chart (Bitstamp). Source: Trading View

Analysts dismiss FTX insolvency fears

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD falling to $19,351 on Bitstamp – its lowest levels since Oct. 25.

The pair, along with altcoins large and small, had already started to show weakness as Binance decides to cancel exposure to FTX’s internal FXT token (FTT) token have been confirmed by CEO Changpeng Zhao.

In a Twitter thread later on November 7, Zhao defended the decision, while FTX CEO Sam Bankman-Fried tried to reassure the markets that its trading platform was solvent.

“There were questions about a large FTT deposit ($580 million) at Binance, and we have been transparent that we are closing our FTT position,” read one of Zhao’s tweets.

Bankman-Fried’s appeal, meanwhile, seemed to fall on deaf ears. Overnight, FTX saw an increase in withdrawals, with monitoring resources even showing negative BTC balances for wallets on the exchange.

Data from on-chain analytics platform CryptoQuant puts FTX’s BTC balance reduction on November 7 alone at -19,956 BTC.

Its BTC reserves were reportedly only 7.1 BTC at the time of writing, according to other data, which could be due to changes in portfolio management.

“FTX, the #2 crypto exchange, is experiencing a banking panic,” Jack Niewold, founder of the Crypto Pragmatist newsletter, started a Twitter investigative thread in indicating:

“Pushed to the brink by a debt crisis and an announcement from its No. 1 competitor, around $1 billion has bled from the platform in recent days.”

In another of many reactions to the ongoing turmoil, Dylan LeClair, principal analyst at UTXO Management, argued that while it may not be financially over for FTX, there are concerns about transparency in its operations.

“I don’t think it’s likely that FTX will be insolvent, but I think Alameda’s worries are notable, at least,” part of Twitter commented. declared.

“I don’t think FTX is going down. Maybe, but I don’t think so”, Michaël van de Poppe, founder and CEO of the Eight trading platform, continued:

“Binance simply wants to sell the position for the stated reasons, through which a sell was initiated. A bit different from $LUNA and Celsius, but also has similarities.

Bitcoin breaks the $20,000 mark

For Bitcoin, the outlook remained cloudy as cold feet gripped market sentiment.

Related: Funding Rates Hit a 6-Month High Ahead of the CPI – 5 Things to Know About Bitcoin This Week

BTC/USD has only recovered $400 from its lows of the day, again making $20,000 out of reach.

Meanwhile, greater volatility loomed on the horizon as the U.S. midterm elections combined with Consumer Price Index (CPI) data due for release on May 10. november.

“$FTT is collapsing sharply, through which Bitcoin and the rest of the markets are also showing some weakness,” Van de Poppe abstract.

For its part, FTT managed to make a modest comeback the next day fall to the bottom just over $15.

FTT/USD 1-day candle chart. Source: CryptoQuant

The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.


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