Crypto Market Review, November 9

The cryptocurrency market entered one of the deepest bear market stages. The FTX situation caused massive liquidations and double-digit losses on some assets. Yesterday, XRP showed us a solid 20% bounce, but it wasn’t enough to cause a reversal.

XRP follows the market

After the rumors that were circulating started to look like the truth, XRP, like other cryptocurrencies, began to rapidly lose its value, plunging to the pre-pump levels we saw back in September.

According to derivatives trading platforms, XRP longs worth millions were liquidated, with traders having to close positions opened at local highs. However, the increase in liquidation volume attracted the attention of investors who tried to catch a knife and did so successfully after the 20% week we saw yesterday.

However, a short-term 20% bounce was not enough to cause a reversal in XRP, and the next day the asset continued its journey to its lowest level of the year and is now trading at $0.37 – almost the exact price level that formed the basis of the rally to $0.55- the height.

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Nevertheless, taking a look at the volume profiles of XRP, we can clearly see that panic or huge outflows from the asset did not cause the sell-off, the most likely reason being the general state of the market and market-making procedures.

130 billion dollars evaporated

Although the fact that FTX caved under the pressure of its own users and had no choice but to ask Binance for help feels shocking, the effect on the market was not immediately apparent.

The total cryptocurrency market capitalization lost around $30 billion hours after rumors that FTX was insolvent appeared in the space. On the day Binance announced the absorption of its competitor, another $50 billion had been withdrawn from the industry. As of today, the total volume of funds the crypto market has lost in the last 48 hours is $130 billion.

Unfortunately, this trend shows that the whole situation can deteriorate drastically even without the appearance of additional risk factors or events that would scare investors even more. Almost all social indicators and metrics show panic among investors, and this tendency will most likely apply until the end of the week.

Every non-stable asset from the market’s top 100 traded negatively in the last 24 hours. This situation will most likely prevail until new capital enters the market or the majority of assets become extremely overbought.

Open interest in most positions in the market remains average, which suggests that traders are not yet ready to provide funds to stabilize the situation in the market and form a foothold for a recovery.

Fortunately, there is some positivity: the liquidation volume in the market fell to the pre-dump level and now stands at $300 million instead of the $850 million we saw yesterday, which is an average result. This reflects the stabilization of the derivatives market that usually dictates the movement of funds in a spot market.