Analytics firm IntoTheBlock has warned that a bankrupt cryptocurrency company holding billions of dollars in digital assets could trigger a cascading rise in prices.
IntotheBlock's Lucas Outumuro says in a report that traders are selling off their holdings over fears that now-defunct cryptocurrency exchange FTX could liquidate its massive digital assets worth $3 billion. Stated.
Outumuro focuses on Ethereum (ETH) and its rival Solana (SOL), two crypto assets that make up a significant portion of FTX's holdings.
“The key factor behind the discretionary sale is likely to be FTX’s planned liquidation of $3 billion in crypto holdings.
FTX has not announced when these liquidations will take place, but it is likely that recent bridging activity has spooked the market.
Since ETH and SOL are both part of FTX's holdings, we believe the lack of sustained price movement in these assets is related to driving sellers on the FTX and SOL fronts. is plausible. [fewer] Buyers are considering advance purchases in anticipation of liquidation. ”
For now, supply and demand appear to be colliding within a narrow trading range, Automurro said. However, analysts have named two other large sellers that could enter the crypto market later this year.
“It appears that buying activity from catalysts such as the potential ETH Spot ETF is being offset by expectations for FTX selling. We could see a wave of large sellers in the second half of the year at the same time as institutional catalysts and organic adoption continue to improve.” These complex power relations are likely to continue as (such as claims by the US government and Mt. Gox) are expected to occur.
At the time of writing, Ethereum is trading at $1,612 and SOL is worth $18.34.
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