Bitcoin price failed to maintain the upward momentum last week and is below $17,000 currently after holding above $20,500 for two weeks! A glance at the daily chart reveals the price lost 22.3% on the week as it retreated six out of seven sessions. Bears took revenge for the breach of the resistance and are on defense currently – however the price is back testing the resistance again!
Crypto market staggered as the crypto exchange FTX collapsed last week while the global stock market rallied after softer than expected US October inflation report. The sentiment shift and return to risk on trading was spurred by speculation the Federal Reserve will shift the rate hikes gears down on slowing inflation data. Before the inflation report last week though there were numerous reports of liquidity crysis at FTX which eventually filed for bankruptcy protection after crypto trading firm Wintermute ceased trading and moved funds from FTX US and crypto lender BlockFi paused withdrawals.
Last Friday the Bahamas-based crypto exchange FTX filed for bankruptcy protection in the US. Bankruptcy filing included FTX Group entities, which comprise of the FTX.com entity as well as FTX US, Alameda Research and “approximately 130 additional affiliated companies.” The filing said FTX US and Alameda Research had between $10 billion and $50 billion in liabilities and a similar range in assets, and estimated that "funds will be available for distribution to unsecured creditors."
Earlier in the week the London-based trading firm Wintermute stopped trading and market-making operations on FTX US soon before FTX halted withdrawals on Tuesday. It also moved all of its funds from FTX US. Wintermute left the FTX exchange before the FTX US issued a warning Thursday that “trading might be halted in a few days.” FTX’s CEO and founder Sam Bankman-Fried had asserted earlier that FTX US was “100% liquid” and not financially impacted” by the global FTX exchange’s liquidity problems.
Crypto lender BlockFi paused withdrawals last Thursday. BlockFi and FTXUS had agreed to a deal in July wherein FTX US would provide BlockFi a $400 million credit facility, which would also allow the crypto exchange the right to acquire BlockFi. BlockFi paused withdrawals despite its Chief Operating Officer’s tweet Tuesday that BlockFi was an "independent business entity" and lender's deal was with FTX US, not FTX international.