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After a month of October without noteworthy movements, between the end of the month and the first days of November the value of Bitcoin he was moving upward again. From $ 19,300 on October 24 to almost 20,500 on October 31, the most widespread and well-known cryptocurrency begins the following month, confirming the positive signs: on November 4, it closes over $ 21,100, the next day it exceeds $ 21,300.
From 5 November the curve changes to the point that we are here to comment on the new annual low of $ 17,744, with a decrease of 15% in the last 5 days. It doesn’t do better at the Ethereum, which it has 25% of its value burned in the last 5 days in dollars. 2022 for the second cryptocurrency in the world is confirmed as a troubled year, despite the highly anticipated merge, i.e. the transition from proof of work to the proof of state.
But it is difficult for now to find a crypto that “turns well”, the movements are nervous and unpredictable for everyone. In a historical moment like the present one marked by geopolitical tensions, and with the eyes of investors focused on the main macroeconomic indicators to test the health of the economy some instability is the minimum that can be observed, but what has happened in the past few hours it looks like a real breakdown.
WHAT HAPPENED?
There Avalanche starts from the statement of Changpeng Zhao, the CEO of Binance, who yesterday wrote on Twitter about the request for help received from FTX due to a strong liquidity crisis.
This afternoon, FTX asked for our help. There is a significant liquidity crunch. To protect users, we signed a non-binding LOI, intending to fully acquire https://t.co/BGtFlCmLXB and help cover the liquidity crunch. We will be conducting a full DD in the coming days.
– CZ 🔶 Binance (@cz_binance) November 8, 2022
Immediate effect: the FTT valuethe FTX token, from 22 it drops to 15 dollars in 4 hours, then goes back up to almost 19 dollars before collapsing in 3 hours under $ 4 due to FTX suspending customer withdrawals. It now looks stable around $ 4.8, but in 24 hours more than 85% of the dollar value went up in smoke.
The effect of two dynamics was thus reflected on the market and on the value of other cryptocurrencies: on the one hand the speculation took over, on the other there was one race to retreat by those who had invested in FTX.
Bitcoin and ethereum are considered to be the stores of value in the industry. They are sold by operators when it is necessary to raise cash and find liquidity – explains Stefano Bargiacchi of Directa to Sole 24 Ore -. This is because many funds having exposure to FTT have been forced to liquidate. It is this contagion effect on which we will have to focus our attention forward
In short, the crypto market is suffering for the umpteenth time and the situation is evolving rapidly. Certainly there is that it does not blow a good air.
Credits opening image: dogfella.
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