The cryptocurrency market experienced its “second Luna moment” of the year after FTX publicly assumed it had no liquidity. Thus, the exchange that is one of the largest in the world, after days of defending itself from the accusations, declared that it needs help.
The first accusations were published by Binance founder CZ, saying he was going to sell his FTT tokens due to the company’s lack of liquidity. So, in response, FTX even said that it would buy all CZ tokens for $22 per token.
However, shortly after the ‘truck’, FTX assumed that it needs help to maintain its liquidity and that it was negotiating the sale of the company to Binance. The fact was confirmed by CZ, who said he wanted to buy 100% of FTX.
The billionaire ‘bullshit’ was all ‘narrated’ on twitter by FTX owner Sam Bankman-Fried and Binance owner CZ. Thus, with everything ‘wide open’ on social media, the movement fueled a “dejavu” of what happened with Terra/Luna, today Terra Classic (LUNC).
Market without credibility
So, fearful of a new market crash, investors sold more than $854 million worth of cryptocurrencies. Thus, according to data from Coinglass, almost $1 billion has been ‘evaporated’ from the market.
The negative move took Bitcoin to $18K, down more than 10%. Thus, leading the decline is FTX’s FTT token which is over 75% bearish. Solana (SOL) also linked to the FTX ecosystem fell 24%.
“The most interesting part is the source of most liquidations. Traditionally, every drop in the market and rise in liquidations is caused by the price performance of the biggest asset on the market, Bitcoin. However, today, this is not the case. Thus, according to Liquidation Data, the biggest suppliers in the market downturn today are FTT and ETH,” said analyst AffectionateMind26.
Still according to him, this shows that the market is very fragile and dominated by companies that are not trustworthy. As such, this can alienate not only retail investors, but especially institutional ones, and reinforces the SEC’s arguments against a Bitcoin Spot ETF.
“Stay tuned folks. The bottom may not have arrived yet!” she concluded.