The opposite is exactly what has happened thus far as the market has retraced on its bullish part to pare off the gains it accrued from the start of the month as it went on a freefall over the past 48 hours.
For the first time since January 2021, the combined digital currency market capitalization has slumped below the $900 billion mark and is currently pegged at $874.74 billion.
The Bearish Market Trigger
The cryptocurrency industry was riled by reason of the implosion of the FTX Derivatives Exchange and the potential acquisition by its arch-rival, Binance Exchange.
In reality, FTX had put up a very healthy facade all through the crypto winter, and is largely regarded as the lender of last resort as it came to the aid of embattled firms like BlockFi, and Voyager Digital.
The company notably earmarked billions of dollars to inject into acquisitions as unveiled earlier in the summer, and all these healthy sentiments vanished when Coindesk published a report showing a possible inflation of FTT valuation by Alameda Research. The report also highlighted how Sam Bankman-Fried has been lobbying against other industry players in the US.
Dissociating from such behavior, Binance CEO, Changpeng “CZ” Zhao said he will be selling his FTT bag, a move that fueled massive selloffs and withdrawals from the company. FTX notably requested Binance to come and buy up its assets so as to cushion the impacts of the liquidity crunch and both companies are currently conducting due diligence at this time.
Crypto Winter Part 2?
The speculations that the market has slid into another crypto winter have fueled more sell-offs in the industry than envisaged. From the current outlook, the industry cannot chart a similar growth as the past November as all focus will be hinged on preventing a cataclysmic ripple effect of the downfall of FTX at this time.