Many were expecting that the turmoil of November in the crypto markets is nowhere near over and their expectations were met in the previous days. In a sharp downward correction, BTC price fell to its lowest value in over two years, reaching the range of 15,000 USD. Other digital currencies did not have any better time than bitcoin in the same period, with ETH coming close to once more being in the triple-digit domain.
The rise in the overall fear on the market is palatable and even the most optimistic analysts believe that there is a slim chance that the slide will stop at the current level. All the while, the crypto winter is apparently only becoming longer and longer in its prospects and nothing anyone can do can influence that for the better. On the other side, the fallout from FTX is slowly turning for the worse each week and assurances of other digital currency exchanges that their operations costs are free from the same digital currency exchange are not that solid anymore. In the same maelstrom, the downward potential is now clearly setting BTC token price at around 10,000 USD in the sights.
Possible Bankruptcy of Genesis
The current fall of digital currency prices began with talks of possible bankruptcy inside of the Genesis company. This trading firm has been in hot waters for some time and it decided to ask for funding from Apollo Global Management and Binance. Wall Street Journal broke this news and soon the crypto markets broke their support as well. But, the big digital currency exchange declined to take this opportunity. Binance, as the biggest digital currency and crypto exchange, stated that it had a potential conflict of interest in the same deal.
The other potential match and its negotiations are unclear at the present moment. What is clear is that Genesis believes that there is no liquidity issue whatsoever. Their representative, speaking directly to Bloomberg, stated that the trading firm is not planning to immediately file for bankruptcy. However, from esports players who invest in digital currency to ordinary individuals with crypto savings, that statement did little to stop the wildfire of fear from spreading across the cryptocurrency markets.
Mid-15,000 USD Range
The breakout of this exceedingly bad news forced the price of bitcoin initially to be 15,480 USD. That is a range where the biggest digital currency in the world has not been for more than 24 months. From there, the price settled a bit higher, keeping the benchmark of about 15,650 USD. In the 24-hour period to come, the digital currency made its way back to 16,000 USD. ETH, in comparison, managed to keep above the exceedingly important psychological barrier of 1,000 USD. The timeframe that follows will put a lot of strain on both of these levels, but also on other smaller digital currencies. For them, to be more precise, the times to come will be even harder as the holders of altcoins might seek to flip them for bigger blockchain network tokens.
History showed that periods of great downward turmoil can more often result in digital currency networks breaking down to almost nothing if they are relatively small or novel. In that case, their owners are also left with nothing. So, keeping hold of altcoins in these drastic bear markets demands a high level of belief and commitment. Otherwise, investors and traders are more likely to exchange them for coins like BTC or ETH which have a bigger shot of staying afloat even when times are exceedingly bad like they presently most definitely are.
FTX Empire Holdings
While all of this was happening, the FTX crash remained front and center for more traders and investors, no matter which particular area of the digital currency market was their focus. According to news reports, the crumbling empire of Sam Bankman-Fried still had around 1.2 billion USD in cash reserves, at least if the bank documents from the courts show correctly. The same is drastically less than the assessment of 3.1 billion USD that the exchange still owes to 50 of its creditors.
This sum also includes some 514 million USD in cash that is unrestricted, while another 465 million USD is in the form of restricted cash. This money will go to things like loan repayments. This picture seems to be somewhat mixed, but still greatly skewing toward a very negative and worrying part of the spectrum. The markets agreed with that almost immediately at the start of the trading day and days to come will be additional proofs in all likelihood of that further seeking of the bottom.
New Lows for Coinbase
The turmoil in the markets brought about new record lows for the famous US digital currency exchange as well. The same US company went public in April of last year. During the last period, Coinbase shares sank nearly 90 percent, and the FTX and any possible contagion or connection between the two caused the latest drop in value. Last Monday alone, the stock of the company went to 40 USD, shaving off an additional 10 percent. Finally, the charts are showing that there is an increasing level of volume and on-chain transfers of BTC tokens from accounts that have been inactive for the last half of the year. That shows a growing level of unconfidence from long-term holders.
A figure from the analytics reports of the market shows that since the collapse of FTX, some 254,000 BTC tokens that have been sitting for more than six months changed hands. All of this clearly shows that the markets are gearing up to a four-digit value of BTC tokens and an ETH token that is closer to 500 USD than to 1,000 USD. That news is catastrophic for many involved in the digital currency markets, but also more than expected for those who have been following it through 2022. With this level of market insecurity and negative news, anything in a different direction would be a small miracle.