The cryptocurrency market has been battered this year, losing more than $2 trillion since peaking in November 2021. Cryptocurrencies have been under pressure since the collapse of major exchange FTX.
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Bitcoin The cryptocurrency rose to a two-year low from the previous day on Wednesday, even as traders remained cautious about possible contagion from the collapse of the cryptocurrency exchange FTX.
The world’s largest digital currency was up nearly 3% to trade at $16,501.30 at 8:31 a.m. ET.
“We’re breaking out of a much-anticipated support level because we’ve been fairly oversold in the last week or two,” said Vijay Ayyar, vice president of corporate development and international at Luno cryptocurrency exchange.
“However, the move is yet to show any upside… We could see a bounce back here, looking at resistance around $17K before a further drop targeting $14K,” he said.
Markets remain on edge following the collapse of FTX, one of the world’s largest cryptocurrency exchanges, once a $32 billion empire.
Investors are concerned about possible contagion from FTX’s collapse and are looking for signs of other companies or institutions that may have been exposed to the stock exchange founded by Sam Bankman-Fried.
“In general, markets were nervous after FTX, expecting more contagion from FTX-related parties,” Ayyar said.
FTX can have more than 1 million creditors. The company owes $3.1 billion to its 50 largest unsecured creditors alone. However, according to a court document released this week, FTX’s various entities around the world had only $1.24 billion in cash balances as of Nov. 20.
Bankman-Fried, who resigned as CEO of FTX earlier this month, has been trying to negotiate a deal from his home in the Bahamas to escape the exchange, a move that appears highly unlikely.
Meanwhile, high-profile crypto entrepreneur Justin Sun said on Tuesday that he and his partners are considering whether to buy some assets from FTX.
Cryptocurrency ether It was also up more than 4% on Wednesday to trade at $1,165.95 at 8:32 a.m. ET.
Ether, in particular, was under pressure after hackers stole about $477 million in cryptocurrency from FTX.
Later, when the hackers began to launder the money, they diverted a large amount – about $280 million – into ether before dumping the holdings into another cryptocurrency. This sale put pressure on the air.
It’s been a tough year for cryptocurrencies, with the industry plagued by crashes, liquidity problems and bankruptcies. More than $1.3 trillion in value has been wiped from the entire cryptocurrency market this year.