Bitcoin slid to a two-year low of about $17,500, and the global cryptocurrency market lost more than a 10th of its value, as speculation mounted that the biggest crypto exchange, Binance, may back out of its attempt to rescue rival FTX.
- The crypto market is plunging as Bitcoin falls to $17,500 levels. Global crypto market cap has fallen to $906 billion, down 11% over the past 24 hours.
- Uncertainty over the Binance-FTX deal has contributed to the fall.
- Liquidations on long crypto positions are high, with more than $870 million in sellout transactions taking place.
Uncertainty After Binance-FTX Deal
The recent Binance-FTX deal has played a major role in sending the crypto market to the red zone. The terms of the deal are unclear, what will happen to the FTX account is unknown, and there are chances that Binance may not buy FTX because of its poor financial records.
It was a rollercoaster ride for crypto investors the entire week. First, the news of FTX's liquidity crunch shocked crypto market participants. That was followed by the larger announcement on Nov. 8 that Binance would buy FTX. The news sent the FTT token on a precipitous drop, losing more than 73% of its value in the past 24 hours.
The market is experiencing heavy shorting after more than 402,000 traders lost over $870 million since Nov. 8. Bitcoin traders lost over $281 million in the short period, followed by Ethereum (ETH) traders down $233.2 million and Solana (SOL) traders losing $56.6 million.
A Long Way From All-Time Highs
Crypto investors may be in for more pain, as there is no sign that the bottom has been reached. Bitcoin is down nearly 13% to around the $17,500 mark. The last time the cryptocurrency traded at this level was in November 2020.
Bitcoin’s market cap has fallen to roughly $336.6 billion—a long plunge from its all-time high of $1.28 trillion. However, ardent crypto investors may find encouragement in the fact that it only took Bitcoin a year to ascend from November 2020’s low prices to its all-time high of $69,000.
The Bottom Line
The drop in crypto prices is bringing a bumpy end to the year for the market. There may be a time in 2022 for it to recover, but being in this uncertain territory will make investors wary about the near future.