Cryptocurrency market participants have commenced the week on a rocky path, seemingly perturbed by potential market influences from the troubled exchange, FTX.
The stalwart of digital assets, Bitcoin (BTC), took a plunge of over 2%, touching the $24,963 mark during US morning hours. A range not witnessed since mid-June. It has managed a slight recovery since then, lingering around the $25,140 mark. Ethereum (ETH), another extensively traded digital asset, hasn’t escaped the chill either, demonstrating a 3.2% decline, valued at approximately $1,560.
Furthermore, the CoinDesk Market Index (CMI), a comprehensive reflection of the crypto market, has suffered a 3% battering. Among other altcoins, Solana’s SOL witnessed the highest fall of over 8%, followed close by Toncoin’s TON, layer 2 Arbitrum’s ARB, and Ripple’s XRP, each registering significant downtrends.
This mass descent can ostensibly be attributed to the news of FTX potentially liquidating assets from their sizable cache of $3.4 billion worth of cryptocurrency assets. Expected by many, including Singapore-based digital asset service provider Matrixport, to incite an “altcoin crash.” Out of the many tokens at risk, SOL appears to be under the steepest threat, with approximately $1.16 billion or almost 16% of it held by FTX, as reported by CoinDesk earlier.
A further implication of this liquidation might be a potential downturn in altcoin prices lasting into late this year. Furthermore, Matrixport anticipates a deeper plunge for SOL projecting a drop to as low as $10 and even expects ETH to retrace substantially to $1,000 if resistance levels of $1,500 break.
Matrixport’s head of research and strategy, Markus Thielen, in a LinkedIn post cautioned of certain altcoins tarnished due to inadequate token economics possibly never recuperating. He advocated maintaining exposure to bitcoin amidst these potentially turbulent altcoin conditions.
Undeniably, crypto markets often exhibit extreme volatility, however, every turbulence potentially opens up new opportunities for strategic investments. Despite the storm clouds, there are silver linings, as every dip is a potential opportunity to invest wisely and strengthen one’s crypto asset portfolio. Watch this space as we continue to dissect the market intricacies and bring you actionable strategic insights.
Source: Coindesk
