FTX’s Cryptocurrency Sales Rumors Had a Negative Effect on Bitcoin Price: So What Do Experts Say?

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FTX's Cryptocurrency Sales Rumors Had a Negative Effect on Bitcoin Price: So What Do Experts Say?

Bitcoin (BTC) experienced a momentary decline on Monday, dropping below $25,000 and falling to its lowest point in nearly three months.

Although the price rises above $ 26,000 again with the current good news, the decision regarding FTX assets is expected to be made tomorrow.

Bitcoin Drops Below $25,000 Amid FTX’s Crypto Sell Speculation

Investors are closely monitoring FTX exchange’s bankruptcy proceedings, with the expectation that court approval to liquidate remaining crypto assets could be given as soon as Wednesday.

Court documents point to a plan to liquidate $100 million worth of crypto assets weekly, with FTX holding approximately $3.4 billion in crypto assets as of April 2023. Approximately $560 million of this is in Bitcoin.

André Dragosch, Head of Research at Deutsche Digital Assets, noted that the potential impact of FTX’s sale may have already been reflected in current prices, but there is increasing uncertainty about the exchange’s crypto assets on third-party platforms.

Dragosch underlined that a potential FTX sell-off, combined with other currently bearish indicators, could put downward pressure on Bitcoin.

On-chain data shows a decline in Bitcoin trading volume for both spot and derivative activity.

This confirms the seven-day moving average of daily spot volume falling below $10 billion for the first time since November 2020.

Dragosch noted that volumes in perpetual and futures remain relatively low. He pointed out that short-term BTC investors realized on-chain losses, especially during the last sell-off at the end of August.

Another factor contributing to the downward pressure is potential divestment from crypto hedge funds, which Dragosch believes are overextended. Expressing that this situation will have a negative impact on the market, Dragosch also said that the downward movement of the markets is more likely in macroeconomic terms.

*This is not investment advice.


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