In the last one week, the main news in the cryptocurrency world was the fall of once the third-largest crypto exchange in the world, FTX. The crypto market cap remained below $850 billion. On Friday, the market cap was $835 billion. In the last seven days, it has fallen by $50 billion. Bitcoin prices are down 3.5 per cent and Ethereum was down 4.8 per cent. FTX’s token, FTT was down 4.4 per cent. However, since the start of November, the price of FTT has fallen by nearly 99 per cent.
“Last week witnessed the collapse of one of crypto’s most recognised brands FTX, resulting in a massive overhang on the entire industry and impacting investor confidence. As FTX and Alameda declared bankruptcy, legacy investors like Sequoia, Temasek, and even Pension funds got burnt, while an expected one million creditors are staring at a long-drawn court battle,” Parth Chaturvedi, crypto ecosystem lead at crypto exchange CoinSwitch said.
The contagion risk has only started emerging as the biggest lending desk in crypto, Genesis, halted credit withdrawals and loans.
“Bitcoin was changing hands between the $16,700 to $16,900 level. At the moment, market participants should pay attention to the $17,000 level… BTC is likely to extend losses till the lower mark from where a significant recovery or bounce is possible,” Edul Patel, CEO and co-founder of Mudrex said.
The silver lining was the US inflation numbers. In the month of October, it fell to 7.7 per cent.
“The silver lining was that Global Macro Backdrop improved last week, with monthly US Inflation numbers surprising on the downside at 7.7 per cent and an immediate relief rally across ‘risk-on’ assets that sustained over the week,” Chaturvedi said.
For Bitcoin, the next resistance is at the $18,000 zone, according to Patel.
“The price of Ethereum held above the $1,000 psychological support level. It could be solid support if ETH can establish above the $1,350 resistance. The volume has also decreased, indicating that few buyers are willing to buy around the current prices. However, if the pressure continues, we might see a drop to the $1,100 zone by the end of the week,” he added.