Bitcoin fell on Tuesday morning in Asia to hover above US$25,000 after briefly losing the key support level for the first time in the past almost three months. Ether also slid to lose control of the US$1,600 support level. All other top 10 non-stablecoin cryptocurrencies also booked losses, with XRP leading the losers with a 24-hour drop of more than 5%. The drop came ahead of a potential FTX liquidation that could see the collapsed crypto exchange sell its US$3.4 billion worth of crypto assets by the end of the year. U.S. stock futures edged lower, after Wall Street logged daily gains on Monday, as investors await key U.S. inflation data this week.
Bitcoin briefly falls below US$25,000
Bitcoin dropped 2.72% in the last 24 hours to US$25,115.32 as of 07:30 a.m. in Hong Kong, down 2.57% for the week, according to CoinMarketCap data. The world’s largest cryptocurrency dipped to its lowest price since June 15, touching US$24,930.30 on Tuesday morning.
Ether saw a bigger loss, dropping 4.31% to US$1,547.18 and lost 4.79% in past week, reaching US$1,533.43 on Tuesday, its lowest in six months.
All other top 10 non-stablecoin cryptocurrencies posted losses in the past 24 hours. XRP led the losers, falling 5.17% to US$0.4727 for a weekly loss of 6.92%.
“The continued decline in altcoin values seems to be linked to the looming approval of FTX’s asset liquidation, a move that could impact the market values of many top cryptocurrencies including XRP, which FTX holds a substantial amount,” said John Stefanidis, chief executive officer of blockchain infrastructure foundation Balthazar DAO.
FTX crypto exchange, which went into bankruptcy in November 2022, is likely to receive court approval on Wednesday to liquidate an estimated crypto holding of US$3.4 billion. The firm proposed to sell up to US$100 million in crypto assets per week, which could be extended to US$200 million.
The incoming FTX liquidation indicates the crypto market could “see another US$3.4 billion in crypto-to-fiat off-ramping — a potential liquidity gap that might be hard to fill in the absence of Signature Bank, Silicon Valley Bank, and Silvergate Bank, which were responsible for at least, 50% of all the fiat-to-crypto on-ramping during the last few years,” Markus Thielen, head of research and strategy at digital asset service platform Matrixport, said in an emailed report.
The event could hit altcoins extra hard, said Thielen, due to “unfavourable tokenomics that compel early investors in projects (founders, Venture Capital investors, etc.) to make prudent financial and survival decisions, and liquidate positions.”
Meanwhile, digital asset investment products saw an outflow of US$59 million in the week ending Sept. 8, marking the fourth consecutive month in a run of outflows that totaled US$294 million, according to a Monday report by European alternative asset manager CoinShares.
Coinshares also highlighted net inflows in short investment products, suggesting “sentiment remains poor for the asset class,” and attributed the grim mood to “continued worries over regulation of the asset class and recent dollar strength.”
The total crypto market capitalization dropped 2.88% in the past 24 hours to US$1.01 trillion as trading volume surged 60.28% to US$32.35 billion.
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- Source: https://forkast.news/bitcoin-ether-lose-key-support-levels/
