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Bitcoin price hits 2-week lows as FTX ‘bank run’ drains BTC reserves

Bitcoin price hits 2-week lows as FTX ‘bank run’ drains BTC reserves

Bitcoin BTC trades down $19,751 as crypto markets plummeted on November 8 as the FTX debacle unfolded.

Analysts dismiss FTX insolvency fears

Data from Cointelegraph Markets Pro and TradingView showed that the BTC/USD pair fell to $19,351 on Bitstamp, its lowest since October 25. The pair, along with altcoins big and small, had already started to show weakness when Binance moved to ditch exposure to FTX internal FTX token FTTtickers

CEO Changpeng Zhao confirmed the $18.12 token. In a Twitter thread later on November 7, Zhao defended the decision, while FTX CEO Sam Bankman-Fried attempted to reassure markets that his trading platform was solvent.

“There have been questions about a large FTT deposit ($580 million) on Binance, and we have made it transparent that we are closing our FTT position,” reads one of Zhao’s tweets. Bankman-Fried’s appeal, meanwhile, seemed to fall on deaf ears. Overnight, FTX saw a surge in withdrawals, with monitoring resources showing negative BTC balances for the exchange’s wallets.

Data from the on-chain analytics platform CryptoQuant puts the drop in FTX’s BTC balance to -19,956 BTC on November 7 alone. His BTC holdings were reportedly only 7.1 BTC at the time of writing, further data showed, which could be due to changes in portfolio management.

In another of many reactions to the ongoing turmoil, Dylan LeClair, a senior analyst at UTXO Management, argued that while FTX may not be financially dead, the transparency of its operations is a concern. “I don’t think FTX is likely to go bankrupt, but Alameda’s concerns are at least notable,” reads part of the Twitter comment.

I don’t think FTX will fall. It could be, but I don’t think so,” continued Michaël van de Poppe, Founder and CEO of trading platform Eight: “Binance wants to sell the position due to the reasons discussed, which initiated a comparison. It differs somewhat from $LUNA and Celsius but also has similarities.

Bitcoin gives up the $20,000 mark

For Bitcoin, the outlook remained cloudy as cold feet took over market sentiment. BTC/USD recovered only $400 from daily lows, putting $20,000 out of reach again. Meanwhile, more volatility was on the horizon as the US midterm elections were combined with Consumer Price Index (CPI) data to be released on November 10. “$FTT crashed badly, which also caused bitcoin and the rest of the markets to show some weakness,” concluded Van de Poppe. The FTT made a modest comeback the day after crashing to lows of just over $15.

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