Cryptocurrencies plummet more than 15% after sinking the Token of the FTX platform

Cryptocurrencies plummet more than 15% after sinking the Token of the FTX platform

FTX has come under pressure after Changpeng Zhaohead of the rival exchange Binance -the largest in the world-, said on Sunday that your company will liquidate its FTX token holdings due to unspecified “recent revelations”.

FTX founder Sam Bankman-Fried said the company is doing “well” and the concerns are based on “false rumours”. The cryptocurrency platform had no immediate comment when contacted by Reuters on Tuesday.

The FTX Token -which grants holders discounts on the firm’s commercial rates- It plunged more than 30% to $15.41, its lowest since early 2021. The token, known as FTT, is the 30th largest digital currency, worth $2 billion, according to CoinMarketCap.

Figures from analytics firm Nansen showed a one-day net outflow from FTX of about $630 million, suggesting that account holders are also taking their money out.

“On-chain analytics show that hundreds of millions of FTX were withdrawn over the last day,” said Matthew Dibb, chief operating officer of Singapore-based crypto investment manager Stack Funds.

The technical reading of the post-election BTC crash in the US

The price of Bitcoin crashed shortly after the 2014 and 2018 US midterm elections. While the price action is similar, analyst readings indicate that the same will not be the case.

The main similarity when looking at the Bitcoin price movement is the time from the all-time high to the election. More specifically, there were 350 days after the 2014 election and 336 days after the 2018 election.

TIn both 2014 and 2018, the price of Bitcoin crashed the week after the election. The crash continued for about a month and had a magnitude of 58% and 51%, respectively. In the current move, a 50% drop would take the price of BTC to $10,400.

While the price action between these periods is similar, the RSI movement is not. In 2014 and 2018, the RSI did not drop below 40 until after the election. Subsequently, bottoms were reached at 35 and 37, respectively. In the current cycle, the RSI has dipped well below 40. The June 2022 RSI bottom (red icon) of 34 is the lowest ever recorded.

Also, the RSI has already started generating bullish divergence. This is a sign associated with uptrend reversals.

So unlike price action, the technical indicator readings indicate that the price movement after the midterms will be different from that of 2014 and 2018.

As a result, a rebound rather than a crash seems more likely after the midterms.

Source: Ambito

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