The Bitcoin price crashed last week after the collapse of the FTX exchange.
Sam Bankman-Fried’s empire has crumbled, with the founder losing 94% of his net worth in one day last week.
Bitcoin – 4H Chart
Bitcoin has been volatile and can see further volatility this week with a chance to retest the lower levels.
The problem for the world popular cryptocurrency could be forced liquidations or institutional selling.
The problems started on November 2 when Coindesk wrote an article discussing liquidity problems at the FTX sister company, Alameda Research. Denials followed, but Binance said it would dump all its FTT holdings. Binance then announced the acquisition of FTX with a letter of agreement from both parties.
That went sour after the due diligence period, and Binance dropped the planned deal. The price of FTT tokens collapsed and saw the CEO step down after bankruptcy proceedings. Friday then saw a $600 million hack of the FTX exchange, which has created further downside, with BTCUSD trading below the $17k level.
FTX had been regarded as one of the more stable companies in the sector and had helped to rescue firms this year with emergency loans as the Terra fallout rocked them.
Analysts at Wall Street investment bank JPMorgan have predicted it could fall by another 25% due to a “cascade of margin calls.”
Bitcoin has been subject to a crushing bear market over the last year, crashing from $64,000 to its current price of around $16,000.
Bitcoin risks falling to $10,000 if there are further liquidations. Still, it will provide some volatility for traders in the week ahead.
