Crypto crash due to FTX news
The recent crash in the cryptocurrency market was primarily caused by news regarding the bankrupt crypto exchange FTX. The exchange is in the process of selling off large amounts of cryptocurrencies, which has had a significant impact on the market. Additionally, several major trading firms have also moved large quantities of coins to exchanges, suggesting that the crash may not be over yet.
FTX’s remaining cryptocurrencies
Despite its bankruptcy, FTX still holds several billion dollars’ worth of cryptocurrencies. While the value of most coins has declined since April, there are still significant amounts at stake.
Selling off these coins is not a straightforward process due to the bankruptcy proceedings. All transactions must go through the court, and recently filed documents have revealed that the company intends to sell the coins to compensate its creditors. This unexpected news led to precautionary selling by traders, resulting in the crash.
The price of Bitcoin, for example, dropped by about 3% initially but has since recovered to pre-crash levels. Solana (SOL) and XRP experienced more significant declines of around 10% and 7%, respectively.
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Coinglass data shows that Bitcoin was the main source of liquidations of long positions during the crash. Within a 24-hour period, over $70 million worth of BTC was sold, exclusively from long positions. However, this data does not indicate whether the sales resulted in profits or losses.
The amounts for XRP and SOL were significantly lower at $2.8 million and $2.3 million, respectively, but this is also reflective of the lower market value of these coins.
14,000 ETH and millions of BTC transferred
An analysis by crypto research firm Arkham Intelligence reveals that several major crypto funds have transferred coins to crypto exchanges. Abraxas Capital Management, for example, sent 14,000 ETH in two transactions to Bitfinex, which is worth nearly $22.2 million at the current price. Jump Trading, on the other hand, moved 236 BTC to Binance, amounting to $6.1 million.
Some of the largest exchange deposits during today’s carnage:
-14K ETH ($22.5M) from Abraxas Capital Management to Bitfinex (two transactions)
-236 BTC ($5.9M) from Jump Trading to Binance
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Track more movements with Arkham.https://t.co/f63pY4QYFk pic.twitter.com/ufCnQiYJWY
— Arkham (@ArkhamIntel) September 11, 2023
In addition, Lookonchain has noted that Wintermute, one of the prominent market makers in the crypto industry, has transferred over $3.3 million worth of arbitrum (ARB) to Binance. This could indicate that Wintermute is preparing to sell off its holdings or that Binance was in need of ARB tokens.
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Note that Wintermute Trading has deposited a total of 4.35M $ARB($3.36M) to #Binance in the past 8 hours.
And currently holds 36M $ARB($27.7M).https://t.co/WHobFxnUXZ pic.twitter.com/6ZxZ6ggqM7
— Lookonchain (@lookonchain) September 11, 2023