Cryptocurrency

Risk Signal flashes red as Bitcoin loses $20K amid Binance-FTX feud

The selling pressure will force Bitcoin to break its uptrend since October 23rd.

Support was found at $19,300, but downside concerns are mounting as the feud between Changpeng Zhao (CZ) and Sam Bankman-Fried (SBF) continues.

bitcoin daily chart
sauce: BTCUSDT on TradingView.com

On November 6th, CZ tweeted: What has recently come to light is Binance has decided to sell its FTT tokens.

The incident sparked rumors of FTX bankruptcy and the Terra-Luna style collapse of the card. Over the past 24 hours, FTX’s native FTT token has fallen 23.5% to $17.30 at press time.

Market unrest following the feud has seen an outflow of $89 billion from the cryptocurrency market cap since Sunday.

Most of the capital outflow happened late Monday night (ET) as it was revealed that CZ had opened a can of worms, including a revelation about FTX’s relationship with its trading arm, Alameda.

Bitcoin risk signal flashes red

Over the past 24 hours, the token price has fallen across the board. The exceptions to the top 100 are Chainlink and Toncoin.

Amid the selloff, market leader Bitcoin fell 5.2% to $19,700. 20,000 BTC reportedly left his FTX, leading to a negative 198 BTC balance on the exchange at one point.

The market turmoil triggered a warning sign and the Bitcoin Risk Signal indicator sank to a low of 2. Since the November 2021 high, he has only had a risk signal of 2 on three occasions. The price dropped significantly each time.

Bitcoin risk signals
Source: Glassnode.com

Founder of OKG star shoe He called on CZ to enter into a “new contract” with SBF, saying the ongoing situation is damaging to the entire cryptocurrency industry.

FTX and Alameda

In 2019, regarding trading claims against users and conflicts of interest arising from market making, investing, and trading, SBF stated that Alameda operates as a liquidity provider solely on FTX and is treated much like any other LP. I said that there is.

In October 2021, SBF stepped down as CEO of Alameda and was replaced by co-CEO. Caroline Ellison When Sam Trabucco Trabucco resigned Ellison remained sole CEO, citing a decision to “put other things first.”

For all intents and purposes, Alameda and FTX are separate companies.But as the drama unfolded, it became clear that there was a 40% One of Alameda’s assets consists of FTT or FTT Collateral Tokens.

Dylan LeClair points out that the FTX “bank run” is supported by Alameda sending stablecoins, suggesting a closer relationship “than led”.

Alameda faces further liquidity pressure if further drawdowns persist. Investor Many crypto projects carry the risk of contagion.

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