The market is shaky at the moment as investors appear to be panic-selling their digital assets already.
Following what seemed like a sustained calm since it broke the $20,000 mark, Bitcoin (BTC) price has suddenly hit a reversal.
The world’s largest cryptocurrency reached an intraday low of $19,448, according to CoinMarketCap data.
FTT Plunges amid Balance Sheet Controversy
It appears that the BTC price dip might be related to the present state of the FTT, the native token of the FTX cryptocurrency exchange. The FTT is down to its lowest since February 2021 on fears of inconsistencies in the balance sheet of trading firm Alameda. And investors clearly do not want a repeat of the Terra crash that happened earlier in the year. But despite that, there is an undeniable feeling that the ongoing FTX-Alameda drama may lead to a similar outcome.
The inconsistencies in Alameda’s balance sheet surfaced last week after reports of the firm holding large amounts of locked or illiquid FTX tokens. Since that report, there have been massive sell-offs, as the FTT crashed by 40% while withdrawals on the FTX exchange also skyrocketed. Per blockchain analytics platform PeckShield, a single whale withdrew $284 million worth of crypto from FTX just recently.
Meanwhile, FTX CEO, Sam Bankman-Fried insists that all is well at Alameda Research and that its assets were “fine.” But investors are taking no chances.
BTC Price, ETH Follow Suit as Market Enters Panic Mode
Crypto data platform Coinglass, confirms that at least $112.83 million worth of crypto has been liquidated within the past hour alone. And of those positions that have now been wiped out, nearly 95% of them are accounts that hold long positions.
The market is shaky at the moment as investors appear to be panic-selling their digital assets already. But their fears may be understandable considering how recently the Terra crash happened. The May crash saw billions of dollars in investor wealth vanish into thin air and the effect is still being felt to date.
As of publication, BTC is down 4.9% in 24 hours, to be trading at $19,476. Ether (ETH) on the other hand, is trading at $1,483, representing a 6% decline in 24 hours.
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