A deal for major cryptocurrency exchange FTX collapsed on Wednesday as rival Binance said it was pulling out after doing due diligence on the proposed acquisition. This mounted the concerns in the digital token space.
Barring the US dollar-pegged stablecoins, all the top crypto tokens continued to bleed. Solana dropped 35%, while BNB and Avalanche both dropped 12% each. Bitcoin, Etheruem and Polygon plunged 10% each.
The global cryptocurrency market cap tumbled sharply to $825 billion, dropping as much as 9% in the last 24 hours. However, the total trading volume dropped over 11% to $189.56 billion.
This week has seen the global cryptocurrency market reach new lows after Binance decided to pull out of the FTX deal, said Prashant Kumar Founder and CEO weTrade.
“Bitcoin touched its lowest level in two years and is trading at $16,000,” he said. “Meanwhile, Ethereum is trading close to $1100. Similar trends can be seen in other cryptocurrencies that have faced heavy losses over the past two days,” he added.
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Cryptocurrency-exposed equities continued their dip Wednesday amid concerns around FTX’s financial health as Binance confirmed Wednesday afternoon that the exchange scrapped its letter of intent to buy rival exchange FTX.
An old-guard rival of FTX from the derivatives markets sought to drive a stake through its heart as the crypto company struggled to save itself from financial disaster.
Betting on Sam Bankman-Fried (SBF), the once-beloved posterboy and “white knight” of crypto was supposed to be safe. But recent events have shown that’s far from the truth.
The majority of FTX’s legal and compliance team quit, Semafor reported, citing people familiar with the matter. That could create a headache as the cryptocurrency exchange deals with a liquidity crisis and potential regulatory scrutiny.
Bitcoin dropped to its lowest level in two years on Wednesday as crypto traders processed the news that Binance exchange retreated from an earlier plan to buy its once-mighty but suddenly ailing rival FTX.
Tech View by Giottus Crypto Platform
It’s been perhaps the most exciting week for Bitcoin (BTC) since its invention, and not necessarily in a positive way. Rocked by negative news and uncertainty – from Alamdea’s bankruptcy to FTX’s withdrawal freeze and the subsequently cancelled Binance takeover, to even the US midterm elections, BTC has been on a downtrend.
Today, it hit a 2-year low near the $15,500 mark. With several supports broken and persistent fear in the market, it’s important to identify possible bottoms. If its current low of $16,000 holds for the short term, Bitcoin may see some short covering and a relief rally that could see it target immediate resistances of $16,900 and $17,800.
Rejections from here could see it visiting support between $15,500-16,200. If those are lost, there’s very thin resistance all the way down to $13,000 levels, where Bitcoin may again retest the year-long trendline it had recently claimed.
On the upside, there will be little reason to cheer for the return of a bull market unless the golden pocket of the drop at $19,200 is reclaimed, followed by a market structure change on the longer time frames at $21,500.
Support: $16,400, $16,200, $15,500
Resistance: $17,600, $18,300, $19,500
(Views and recommendations given in this section are the analysts’ own and do not represent those of ETMarkets.com. Please consult your financial adviser before taking any position in the asset/s mentioned.)