A day after Binance BNB/USD CEO Changpeng Zhao revealed he would offload all the FTT tokens in the company’s kitty, FTX’s native token FTT/USD nose-dived about 35% and made a low of $15.56, from a high of $23.15 it had made over the last 24 hours.
FTT is currently trading at $17.20, down about 23%.
The debacle sent shockwaves across the crypto industry and dragged down major cryptocurrencies, including:
- Bitcoin BTC/USD and Ethereum ETH/USD, which are trading down 5% and 6.6%, respectively.
- Ripple’s XRP/USD trading down 7%
- Dogecoin DOGE/USD is down 13%
- Cardano’s ADA/USD is down 6%
- Solana SOL/USD is down 12% over the last 24 hours.
With the crypto market reeling under a bout of intense sell pressure, Benzinga spoke to experts about their views on the toke having a volume of 1.4 billion —up 88% compared to the previous day, according to data from Coinmarketcap.
Alpha Impact CEO Hayden Hughes says there are massive flows into and out of FTX, which is moving its own funds into the exchange, and many small and large withdrawals moving out.
The exchange has said they are working to process all withdrawals. So far, it looks like withdrawals are going through, he says. FTT has broken out to the downside past the previous psychological stress point of $22.
“Bulls will need to break out above $18 for a meaningful rally, and beyond that $22. The bears will need to pass $15. If prices break down below $15, watch out for support around $11.90 and below that at around $9.50,” he adds.
Bitrue analyst Whitney Setiawan says FTT holders do not want to be caught in the cross-hairs of the feud between Zhao (CZ) and FTX chief Sam Bankman-Fried (SBF). It is likely that most traders don't want fear, uncertainty, and doubt, or FUD, by withdrawing their funds.
“Based on this narrative, we are likely to see FTT fall even lower over the next couple of days. Depending on how the events are handled by Sam Bankman-Fried and the parties involved, there will likely be price volatility over the next few weeks,” Setiawan says.
Setiawan’s reference to the feud between Binance and FTX bosses apparently stems from regulatory ideas he put up in a blog post that suggested limitations on decentralized finance (DeFi).
Bankman-Fried had come up with a draft regulatory framework for cryptocurrencies — a set of standards — while waiting for full federal regulatory regimes.
Zhao subsequently said he wouldn't support people who lobby against other industry players behind their backs and confirmed Binance's sell off all the FTT tokens it held in its reserves. Zhao’s announcement led to a cascading effect on FTX's native token, which spiraled down nearly 35% on Tuesday.
Also Read: China Holds $6 Billion Worth Of Crypto, Could 'Kill' Crypto Markets If It Wishes: Analyst
Aarti Dhapte, senior analyst at Market Research Future, says a rally is unlikely to occur in the near future due to market uncertainty brought on by the forthcoming mid-term elections in the US.
The FTX price has been in a significant negative trend for the last three weeks, according to the daily chart and the cryptocurrency has challenged the crucial support level of $21.95, which it has previously struggled to break below this year.
Additionally, it has fallen below the 50-day and 25-day moving averages, she says.
“As a result, there is a chance that the price of FTT may shortly see a negative breakthrough. If this occurs, the currency may drop below $20 soon,” according to Dhapte.
Meanwhile, Vivek Khatri, founder of Crypto Intelligence, a crypto advisory firm, says FTT has broken an important support level of $22 and the first support lies at $14 where the token will find stability.
"If $14 breaks then the next target is $5 as per the weekly chart. Our view is bearish. Every Rise is for selling until it closes above $22 on the weekly chart," he adds.
Next: Is CZ Spreading Rumors? Bankman-Fried Thinks So: Binance, FTX Drama Continues
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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