Bitcoin Price Takes Big Hit amid Binance, FTX ‘Deal’
Bitcoin price declined below $18,000 after initially rebounding over $20,000 on news that the embattled FTX might be bought out by long-time competitor Binance.
The global cryptocurrency market is in a bloodbath, with the total crypto market cap down over 12% from yesterday and the market cap of DeFi coins down more than 13%.
BTC/USD lost more than $2,000 in under two hours, seeing a sudden plunge that set a low of $18,000, according to trading data from Coinmarketcap.com.
There is a connecting bearish trend line forming with resistance near $18,000 on the hourly chart of the BTC/USD pair. The pair could continue to move down towards the $17,500 and $16,800 support levels, according to analysts.
Earlier in the week, FTX’s problems escalated the issues and the crypto market faced strong selling pressure. BTC declined below the $19,500 and $19,000 levels.
FTX admitted that the exchange was experiencing a liquidity shortage; the insolvency was so severe that Sam Bankman-Fried, the CEO, approved selling FTX to competitor cryptocurrency exchange Binance for an unknown amount.
Binance’s sudden and unexpected planned takeover of longtime rival crypto exchange FTX will increase scrutiny of the asset class.
CEO of Binance, Changpeng ‘CZ’ Zhao, tweeted on Tuesday that Binance has signed a “non-binding” letter of intent to buy FTX fully and that “FTX sought our help” due to a liquidity constraint.
The deal does not involve FTX’s operations in the United States, and it is not clear if the market maker’s venture capital section would also be acquired. READ: UK Financial Regulator Bans Binance Crypto Platform
Binance’s spokeswoman did not immediately respond to a request for comment. A representative for FTX declined to comment, referring to CEO Sam Bankman-tweets.
Binance to Acquire FTX
Binance, the world’s largest cryptocurrency exchange, has signed a nonbinding agreement to buy FTX.com, a unit of major rival FTX, to help cover a “liquidity crunch” at the cryptocurrency exchange, Binance CEO Changpeng Zhao said on Tuesday.
“This afternoon, FTX asked for our help. There is a significant liquidity crunch. To protect users, we signed a non-binding LOI, intending to fully acquire FTX.com and help cover the liquidity crunch,” said Zhao in a tweet, noting that Binance has the discretion to pull out from the deal at any time.
In a tweet, Sam Bankman-Fried, FTX founder and CEO, said that teams are working on clearing out the current backlog of withdrawals and that all assets will be covered 1:1.
Binance, which dominates the $1 trillion crypto industry, with over 120 million users, is currently under investigation by the U.S. Justice Department into possible violations of money-laundering rules by Binance, Reuters reported last week.
# Bitcoin Price Takes Big Hit amid Binance, FTX ‘Deal’
