Bitcoin (BTC) and cryptocurrency markets fell sharply on Nov. 8 on contagion from the exchange debacle; FTX.
Analysts dismiss FTX insolvency fears
Data from Cointelegraph Markets Pro and TradingView showed the BTC/USD pair falling to $19,351 on Bitstamp, its lowest levels since Oct. 25.
The pair, along with altcoins big and small, had already started to show weakness as Binance’s moves to remove exposure to the FTX exchange’s native FXT token (FTT) were confirmed by the 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 ensuring that its trading platform was solvent.
“There were questions about a large ($580M) deposit from FTT to Binance, and we were transparent about the fact that we are closing our FTT position,” part of one of Zhao’s tweets read.
The Bankman-Fried appeal, meanwhile, seemed to fall on deaf ears. Overnight, FTX saw a spike in withdrawals, with monitoring resources even showing negative BTC balances in exchange wallets.
Data from on-chain analytics platform CryptoQuant puts FTX’s BTC balance drawdown on Nov. 7 alone at -19,956 BTC.
Its BTC reserves were reportedly as low as 7.1 BTC at press time, according to other data, which could be due to changes in wallet management.
“FTX, the number 2 cryptocurrency exchange, is experiencing a bank run,” Jack Niewold, founder of the Crypto Pragmatist newsletter, began an investigative thread on Twitter. affirming:
“Pushed over the edge by a debt crisis and an announcement from its No. 1 competitor, $1 billion has been bled from the platform in recent days.”
In another of many reactions to the ongoing turmoil, Dylan LeClair, a senior analyst at UTXO Management, argued that while it might not be over financially for FTX, the transparency of its operations was a cause for concern.
“I don’t think FTX is likely to be insolvent, but I think Alameda’s concerns are notable, even if it is,” He said part of the comments on Twitter.
“I don’t think FTX will go down It could be, but I don’t think so”, continuous Michaël van de Poppe, founder and CEO of the Eight trading platform:
“Binance simply wants to sell the position due to the reasons discussed, through which a sale was initiated. A little different from LUNA and Celsius, but has similarities as well.”
Bitcoin misses the $20,000 mark
In the case of Bitcoin, the outlook remains murky as coldness has taken over market sentiment.
The BTC/USD pair recovered just $400 from its intraday lows, putting $20,000 back out of reach.
Meanwhile, further volatility loomed on the horizon as the US mid-term elections combined with Consumer Price Index (CPI) data due out on 10 November.
“FTT is sinking heavily, so also Bitcoin and the rest of the markets are showing some weakness,” summarized They go from Poppe.
For its part, the FTT managed a modest comeback on the day, after falling to lows of just over $15.
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