Bitcoin (BTC) Dropped to its lowest level in two years as crypto traders processed the news that the Binance exchange retreated from an earlier plan to buy its once mighty but suddenly ailing rival FTX.
The CoinDesk Bitcoin Price Index fell to $15,625, the lowest since November 2020, after Binance said that, after conducting due diligence on FTX, it would not go through with the deal. BTC was down 14% on the day, the biggest single daily drop since mid-June.
Binance on Tuesday said it would buy the billionaire Sam Bankman-Fried’s FTX after what appeared to be a severe run on deposits but backed out on Wednesday afternoon citing “mishandled funds and alleged U.S. agency investigations.”
The fear among crypto traders is that the distress at FTX or at Bankman-Fried’s trading firm, Alameda Research, might lead to forced selling, potentially hitting not just the FTX’s own exchange token, FTT, but other cryptocurrencies from bitcoin to ether and Solana’s SOL.
“This is another one of those catalysts,” said Bob Iaccino, Path Trading Partners co-founder and chief market strategist. “I wouldn’t be surprised if bitcoin went as low as $9,000, which for me, as someone who got out of bitcoin and is waiting to get in again, would actually be a positive.”TRADE SUGGESTION: SELL AT 16584.69, TARGET AT 15585.58, SL AT 16825.
