Bitcoin, one of the most popular cryptocurrencies, has fallen to its two-year low as Binance announced its decision to withdraw from the FTX deal in response to the most recent news headlines concerning mishandled client funds and claimed investigations by US agencies,
The third-largest crypto exchange, FTX Trading, is reportedly having a liquidity crisis, which has caused all cryptocurrencies to plummet as well as the overall crypto market cap to dip below its $1 trillion mark.
Terra Luna Bank and the subsequent collapse of LUNA Classic led to a global state of panic in the cryptocurrency market when Bitcoin experienced its first seven-week losing streak. However, now BTC struck a new 23-month low due to the “liquidity crunch” at FTX.
Bitcoin (BTC) is presently trading at $16,412.79, down 7.51% from the previous day, according to data from CoinMarketCap. Additionally, during the past seven days, the token has lost around 18.94% of its value.
Before this event, BTC was trading at about $20,000. Interestingly enough, when this incident occurred, Bitcoin overrode all prior support levels.- breaking through a triple bottom support level directly below the $17,000 resistance.
If closing candles continued to fall below that current price point of $16,000, then the coin could potentially fall all the way down depending on market conditions. However, there are chances for it to rally around $13,000 – maybe even going as low as $12,500 – if current market trends keep up.
Similarly, Ethereum (ETH), the second largest currency, reached its breaking point – falling rapidly to $1,259.44 in the same time frame. It has since then dropped even further – at around this moment.
ETH has lost a total of 2.34% over the previous 24 hours and 22.41% over the last seven days and is currently trading at $1,187.06.
Binance Cancels FTX’s Acquisition Plan
The CEO of Binance revealed the company’s plans to buy FTX on Tuesday. But the next day, news emerged from the company announcing that they had decided to abandon their possible acquisition of FTX.com.
Initially, the company had hoped it would be able to provide liquidity for FTX’s customers, but problems were out of its control. Binance said in the tweet’s comment section:
“Retail customers will suffer every time a key company in an industry falters. They have seen that the cryptocurrency ecosystem is strengthening over the past few years, and we think that eventually, the free market will screen out outliers that abuse user funds.”
In addition, the company predicts that as regulatory frameworks are developed, and the industry moves closer to greater decentralization, there will be increased resilience in the ecosystem.
Nevertheless, the recent collapse of this deal has thrown consumer funds into uncertainty as well as cast doubts on the viability of one of the biggest cryptocurrency trading platforms. Additionally, it signals a continuation of the turmoil in the industry that has been going on for a while now.
Related Reading | Coinbase CEO Bashes the US Regulators for its Probe Into FTX