By
Chimamanda U. Martha
April 24th, 2024
Crypto traders say that bears are in complete control. Bitcoin can drop to $13,000 and altcoins can correct another 50% from the current levels.
A week after crypto exchange FTX declared bankruptcy, the world’s largest cryptocurrency Bitcoin (BTC) is trying to find some steadiness. As of press time, Bitcoin price is trading close to the $16,700 level with a market cap of $321 billion which is a serious reason for concerns from the side of traders.
On the other hand, the FTX contagion continues to spread across the broader crypto market. On Wednesday, November 16, another crypto lending firm Genesis Global was caught in the wildfire of FTX collapse and decided to pause customer withdrawals.
Although Bitcoin is trying to find support at $16,000, it might face headwinds as the FTX contagion spreads across other firms. The FTX collapse has led to a massive liquidity drop in the crypto space and this problem could continue further.
By the end of the third quarter, crypto lending firm Genesis Global has $8.4 billion in loan originations and nearly $2.8 million in total active loans. Speaking to CoinDesk, Eliézer Ndinga, director of research at crypto investment products firm 21.co said:
“They have to go long on specific products but also possibly go short to make sure that they can hedge against a specific downside. This is bigger than many people think. I think the best-case scenario for players like Genesis would be to define fresh capital or more of the highest bidders to help the company to operate better. We’re going to hear more about the effects on these players in the space”.
Can Bitcoin Drop to $13,000? What do Traders Think?
Traders are not completely ruling out the possibility that Bitcoin price can correct an additional 20% from here. Popular crypto trader Crypto Tony said that the bears are currently in complete control. Speaking on the development, he added:
“While we are dancing around the lost range lows, well the bulls really need to reclaim $17,600 for us to be able to shift nicely in a long position For now bears are in control …”
Another crypto trader, Il Capo of Crypto added that altcoins could see an additional 50% collapse from the current price. He has advised retail players to completely get out of the market.
“I repeat… EXIT ALL THE MARKETS. Most people are not ready for what is coming,” the crypto trader said.
While FTX’s former chief Sam Bankman-Fried continues to make new tweets, the newly appointed CEO has distanced himself from SBF. FTX’s new CEO John Ray III is upfront about the problems left in the wake. He further described the corporate control of FTX as a “complete failure”.
Ray said: “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here.”