FTX and Alameda’s Ponzi-like trading scheme has deeply injured the cryptocurrency industry. However, there are events to follow after the FTX bankruptcy. As Kriptokoin.com, we present you three developments that should be followed closely.
What can happen in the cryptocurrency markets?
Until the beginning of the week, Bitcoin was showing quite low volatility. It also experienced increases with the developments in altcoins. At the same time, on-chain data and technical analysis indicated that BTC is in the midst of bottoming out. However, many analysts believed that the bullish action was coming.
However, the increase in volatility in the market after the recent events reveals that there is a “Black Swan” event. According to many crypto analysts, both FTX and Alameda caused a scam. The exchange abruptly stopped withdrawals due to “not being able to work as usual”. “We are suspending customer withdrawals that are permitted under our terms,” it said. After these statements, the confidence of users seems to have been shaken.
Stablecoins are in danger
Currently, it is difficult to thesis for short-term investment in cryptocurrencies just by looking at the chart, according to analysts. It is stated that the best thing investors can do is stick to a time-bound plan. The most likely short-term outcome is considered to be high volatility. According to experts, cryptocurrencies are likely to drop for a while. During high volatility events, stablecoins sometimes diverge from their stablecoins with the dollar. A development or a crazy FUD about Bitcoin leads investors to stablecoins pegged to the dollar. As a result, stablecoins rise above $1.
During the Black Swan events, Tether (USDT) loses the dollar rate. It’s happened a few times before, and then it’s fixed again. According to data provided by TradingView, on November 9, USDT fell below its stable. With the decline, it fell as low as $0.97. USDT broke from its stable, while the value of USD Coin (USDC) rose to $1.01.
The most important point in the crypto money markets is the uncertain information. False information, rumors and lies cause panic. Afterwards, it easily triggers users in the market. That’s why experts say rumors about Alameda and Tether should be investigated.
A similar phenomenon was seen in the Terra and Celsius crises. TradingView shows that on May 12, the price of USDC rose from $1.00 to $1.06 and then to $1.19. On the same day, the value of USDT briefly dropped to $0.98 and $0.94.
How will the Bitcoin price react?
The sell-off on November 8th finally dropped BTC from $24,500. With the events that followed, it was outside the 146-day range, where it fluctuated between $18,600. As developments regarding FTX emerged, the price of Bitcoin fell as low as $17,100 seen in June. Analysts hope that Bitcoin will reclaim $18,000. At least the price is likely to return to the previous range after it can hold from here.
Ethereum (ETH), on the other hand, fell from the 148-day range between $2,000 and $1,250. Along with it, it reflects a similar setup. But the price has already reclaimed the previous range. Analysts state that ETH has a downside target in the $700 range. However, the price needs to be waited for to rebound and trade around $1,250. Cryptocurrency market is looking for a more solid foundation
Companies exposed to FTX in cryptocurrency markets
The liquidity crisis in FTX has caused serious problems, especially in the crypto money companies that are connected. The companies currently at risk are as follows:
- -Sequoia Capital – $213.5 million in risk
- -Galaxy Digital – $77 million loss
- -Crypto.com – Has less than $10 million links
- -Amber Group – 10 percent loss of funds
- -Kraken – Exposure to 9k FTT
- -Mulcoin Capital – 10% loss of funds
- -Selini Capital – owns 3 percent of its funds
Companies with exposure to #FTX
-Sequoia Capital – $213.5 million exposure
-Galaxy Digital – $77 million exposure
-Crypto.com – Less than $10 million
-Amber Group – 10% funds
-Kraken – exposure to 9000 FTT
-Multicoin Capital – 10% funds
-Selini Capital – 3% of their funds— Being Satoshi (@BeingSatoshi) November 10, 2022
These are just the losses of crypto companies. There is also a substantial variety of altcoins and decentralized finance (DeFi) tokens. According to analysts, many of these BTC, altcoin and DeFi tokens are likely to find their way to market on spot exchanges in order to recover existing losses, improve their own lending and meet customer obligations.
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