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Bitcoin (BTC) Bounces Despite Traders Remain Cautious After FTX Crash

Bitcoin (BTC) Bounces Despite Traders Remain Cautious After FTX Crash

The cryptocurrency market has been hit hard this year, having been devalued by more than $2 trillion since its peak in November 2021. Cryptocurrencies have come under pressure following the collapse of major exchange FTX.

Jonathan Raa | Nurfoto | Getty Images

bitcoin bounced higher on Wednesday, rebounding from the previous day’s two-year low, even as traders remain wary of possible contagion from the crash of FTX cryptocurrency exchange.

The world’s largest digital currency rose almost 1.9% to $16,440.08.

“We are bouncing off the support level, which is to be expected as we have been oversold for the last week or two,” Vijay Aiyar, vice president of corporate and international development at crypto exchange Luno, told CNBC.

“However, this move does not yet indicate any bullish sentiment… We can see a bearish bounce here looking for resistance around $17K before further declines reach the $14K target,” he added.

Markets remain on edge after the fall of FTX, a once $32 billion empire that was one of the world’s largest cryptocurrency exchanges.

Investors are concerned that the fallout from FTX could be contaminated and are looking for signs of other companies or organizations that may have been involved with the exchange founded by Sam Bankman-Freed.

“In general, markets were nervous after FTX, anticipating further expansion from FTX-related parties,” Aiyar said.

FTX may have over 1 million creditors. The company owes $3.1 billion to its top 50 unsecured creditors alone. However, as of Nov. 20, various FTX entities around the world only had about $1.24 billion in cash, according to a lawsuit released this week.

Bankman-Fried, who stepped down as FTX CEO earlier this month, was trying to strike a deal from his home in the Bahamas to save the exchange in what seems unlikely.

Meanwhile, Justin Sun, a well-known crypto entrepreneur, said on Tuesday that he and his partners are considering buying some assets from FTX.

Cryptocurrency ether also rebounded on Wednesday, trading up 3.1% to $1,163.10.

Ether, in particular, came under pressure after hackers stole about $477 million in crypto from FTX.

The hackers then converted a huge amount – around $280 million – into ether before dumping the assets into another cryptocurrency when they started laundering the money. These sales put pressure on the airwaves.

It has been a tough year for the crypto industry, with the industry suffering from crashes, liquidity issues and bankruptcies. Over $1.3 trillion has been erased from the entire cryptocurrency market this year.

What you need to know before investing in cryptocurrency

Written by khirou

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