A week after the collapse of crypto-currency exchange FTX, the world’s largest crypto-currency, bitcoin (BTC), is trying to find some stability. As we go to press, the price of bitcoin is trading near the $16,700 level, with a market capitalization of $321 billion, which is a serious cause for concern on the trader side.
On the other hand, the FTX contagion continues to spread to the broader crypto market. On Wednesday, November 16, another crypto lending company Genesis Global was caught in the crossfire of the FTX collapse and decided to pause customer withdrawals.
While bitcoin is trying to find support at $16,000, it could face headwinds as the FTX contagion spreads to other companies. The FTX collapse has led to a massive drop in liquidity in the crypto space and this problem could continue.
At the end of the third quarter, crypto lending company Genesis Global has $8.4 billion in initial loans and nearly $2.8 million in total active loans. Speaking to CoinDesk, Eliezer Ndinga, director of research at crypto investment product company 21.co, said:
“They need to be long on specific products, but also potentially short to make sure they can hedge against a specific downside. That’s more important than a lot of people think. I think the best case scenario for players like Genesis would be to set fresh capital or several of the highest bidders to help the business run better. We’ll find out more about the effects on these players in the space.”
Can bitcoin fall to $13,000? What do traders think?
While we are dancing around the lost range lows, well the bulls really need to reclaim $17,600 for us to be able to shift nicely in a long position
For now bears are in control … pic.twitter.com/Kj1oDz4wyd
– Crypto Tony (@CryptoTony__) November 17, 2022
Traders are not completely ruling out the possibility that the bitcoin price could correct by another 20% from here. Famous Crypto trader Tony said that the bears are currently in full control. Speaking on the development, he added :
“As we dance around the lost lowers, well the bulls really need to get $17,600 back so we can move nicely into a long position For now, the bears are in control…”.
Another crypto trader, Il Capo of Crypto, added that altcoins could see an additional 50% collapse from the current price. He advised retail players to get out of the market completely.
“I repeat… GET OUT OF ALL MARKETS. Most people are not ready for what’s coming,” the crypto trader said.
While former FTX chief Sam Bankman-Fried continues to make new tweets, the newly appointed CEO has distanced himself from SBF. FTX’s new CEO, John Ray III, is candid about the problems left in the wake. He further described the company’s control of FTX as a “complete failure“.
Ray stated, “Never in my career have I seen such a complete failure of corporate controls and such a complete lack of reliable financial information as what has happened here.“