- The spillover of the FTT episode has spread across the entire crypto space taking Bitcoin down under $20,000.
- Bitcoin’s long-term holders’ conviction remains very strong with them holding 72 percent of the total BTC supply.
Over the last 24 hours, the world’s largest cryptocurrency Bitcoin (BTC) has come under severe selling pressure falling under $20,000. As of press time, Bitcoin (BTC) is trading 4.5 percent down at a price of $19,768 and with a market cap of $379 billion.
The concerns over the FTX token’s liquidity conditions and balance sheets of FTX and Alameda Research have spread like a contagion. Some market analysts believe that it could be another LUNA-like episode in the market. Popular crypto market analyst Dylan LeClair wrote:
I have a horrifying thought that the Alameda counterparty for the leveraged FTT exposure could be the solvency of FTX itself. As $22 FTT fell, ~400k worth of FTT open interest was eviscerated. Who else is capitulating with size at exactly that level except Alameda?
This has led to strong liquidations taking place in the broader cryptocurrency market. Today’s fall in the Bitcoin price comes amid the fall in the broader crypto market. The crypto market has slipped once again under $1 trillion in value.
The FTT contagion has to more than $40 million in Bitcoin liquidations over the last few hours. The total crypto market liquidations are north of $100 million. On the technical chart, Bitcoin (BTC) is once again approaching the downward trendline that it breached last month in October.
#Bitcoin approaching an interesting spot
Going to be interesting how it behaves here: pic.twitter.com/FQprEcYDuB
— Matthew Hyland (@MatthewHyland_) November 8, 2022
Some positives about Bitcoin
Despite the recent turbulence and price volatility, Bitcoin’s long-term holders have remained unfazed. The Bitcoin long-term holdings are currently at their all-their high. These holders currently contribute to 72 percent of the total Bitcoin supply. On-chain data provider Glassnode explains:
The supply younger than 6 months old which is available on the market has remained around historic lows since May 2022 and continues to decline, further reiterating the extreme level of HODLing present in the current market.
Bitcoin has been trading close to $20,000 over the last few months. Although there’s strong conviction among long-term buyers, it continues to face selling pressure at every rise. Bitcoin miners have been net sellers this year as they continue to face operational headwinds. With Bitcoin price plummeting and energy costs rising, Bitcoin miners have very little option but to sell their holdings to continue their operations.
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Also, one major concern with Bitcoin could be global macro uncertainty. Earlier this month, the Fed announced a 75 basis points rate hike amid concerns about soaring inflation. Some big investors expect the Fed to continue with its aggressive stand and further rate hike over the next year in 2023. However, the pace of rate hikes will drop.
Billionaire Chamath Palihapitiya said he is expecting a major crash in the global markets amid Fed’s aggressive posturing.