Bitcoin still losing after FTT crash
Analysts at Bitfinex, one of the leading crypto exchanges, confirm the current decline for Bitcoin due to last week’s disturbing turn of events regarding the collapse of the FTX exchange and consequently also of its original token FTT.
Specifically, when the FTT collapsed, the price fell all the way below $3, recording an impressive drop of 85%. As a result, the crypto market went on high alert and all coins were affected.
In this bearish market phase, Bitcoin, the world’s first and most prestigious crypto, was no exception, recording a 10% decline and last week updating its price to $17,000, the lowest since late 2020.
Bitfinex defines the state of Bitcoin after FTT
BitfinexIts latest analysis of Bitcoin’s collapse reads:
“Unsurprisingly, many coins are held at a loss as we push through what is perhaps only halfway through the current bear market. The supply at a loss is at a similar distance from the median supply, corresponding to the latter stages of previous bear markets.”
Thus, it is no scandal that many coins, i.a Ethereummaintaining loss-making values in a bearish market phase such as the one that occurred after implosion of FTX. The exchange, along with its native token FTTrepresented a colossus in the crypto world
Therefore, if it collapses, it is normal that investor confidence in crypto will decrease and the entire market will be affected. Furthermore, Bitfinex adds:
“The offer in profit is always stiff and a lagging one, but it remains to be seen whether the latest black swan event to affect the industry, the bankruptcy of FTX, can mark the sharp drop in the offer in profit for BTC, where it may witness a bottom formation with price consolidation at these levels. However, with the exogenous impact of the FTT collapse, it is likely that we could have an even longer decline than the charts are currently predicting.”
Hence the downward path for Bitcoin may not be over, and may actually be even worse than the charts predict.
Bitcoin price trend in the last week
Since the collapse of the original FTT token into FTX, Bitcoin has experienced several and somewhat worrying price changes. In fact, to begin with, as previously expected, BTC fell to its lowest since 2020, reaching as low as $17,000.
Prior to this phase, Bitcoin recorded a significantly higher price, reaching as high as $20,000 in late October. In recent days we have seen a possible recovery phase on Monday.
In fact, one wonders if Monday’s price action was just a breather from the relentless selling pressure from bearish traders or if a reversal is underway. Specifically, on Monday, the price of BTC marked an uptrend for the first time in four days and ended the daily trading session at +$289.6.
However, the price of BTC lost more than 20% of its value last week, registering a price range in the last twenty-four hours between $15,000 and $17,000.
While BTC’s price range in the last seven days has been between $15 thousand and $20 thousand. So, over the last thirty days, the average price recorded by Bitcoin has been around $19 thousand, with a decrease of 14% over the time period.
Currently, the price of Bitcoin registers +1.77% and ends at $16 thousand, back in the green for the first time since last Thursday. However, this data still does not provide certainty of an imminent recovery for BTC after the market turmoil.
Can BTC be considered near bankruptcy after the FTT affair?
Many may wonder, especially the more inexperienced, if Bitcoin is on its way potential bankruptcy after recent events, including the collapse of FTT.
In reality, those familiar with the history of the famous crypto know that Bitcoin has suffered even worse in the past, but still managed to increase its price afterwards.
In fact, Bitcoin’s real fortunes start in 2017, when its price first reached $20,000, making what was then a new all-time high.
Bitcoin had undergone that rise after a huge speculative bubble that took the price of BTC from $1,100 to $20,000 in less than twelve months. But when the bubble burst the following year, Bitcoin’s price plummeted, recording losses of 85% to $3,200.
Only at the end of 2020 did Bitcoin come back to mark a price of around $20,000.
So the major hiccup of the speculative bubble was not enough to bankrupt the crypto-Bitcoin, although it took a full three years to return to peak price levels.
So while the recent November collapse may be reminiscent of the one that occurred in 2018, the latter had occurred at price levels three times higher than the collapse due to FTT.
In essence, one can remain quite calm, as it is estimated that Bitcoin will not fail even after this difficulty.
What is Bitcoin halving and why is it important
The halving referred to Bitcoin is a cycle that happens once every four years or so. The halving is an inherent process in the Bitcoin protocol and is characterized by being so unchanging and predictable.
Halving is also what giving Bitcoin its deflationary nature, so it is of utmost importance because it is BTC’s only monetary policy measure. It literally means to reduce by half, so refers to Bitcoin miningit stands to reduce the reward for miners by half.
It is important to specify that the reward given to miners is the only existing way to create BTC. So when we put Bitcoin’s halving in relation to what is happening with the current price of BTC and all the other collapses the coin has suffered in recent years, one can be quite comfortable that Bitcoin is not collapsing.
In fact, the fall that is talked about today and that was talked about in 2018 happened even earlier in 2014, when another huge speculative bubble took the price of BTC from $13 to $1100. This collapse ended with -85%.
And yet, Bitcoin recovered and came back to update its price in a positive way. Of course, nothing is certain and we cannot know exactly what will happen to BTC after the FTT collapse, as each situation is its own.
In any case, considering the halving and previous collapses of BTC, one can well hope that Bitcoin will mark an upswing this time as well, although we cannot estimate exactly how quickly.
