As FTX prepares to sell its $3.4 billion hoard of digital assets, other cryptocurrencies may suffer, according to cryptocurrency services firm Matrix port. The anticipated selling pressure from the bankrupt exchange FTX sent traders into a panic, which caused a collapse in the cryptocurrency markets on Monday. For the first time since mid-June, Bitcoin (BTC) lost more than 2% and briefly plummeted to as low as $24,963 during U.S. morning hours. Since then, it has somewhat recovered some of those losses and is currently trading at about $25,140, down 2.6% in the past day. The second-largest cryptocurrency by market capitalization, ether (ETH), was down 3.2% on the day and was trading at $1,560.
The broad market proxy Coin Desk Market Index (CMI) fell by 3%.
Afraid of FTX, altcoins are most affected.
Alternative cryptocurrencies, or “altcoins,” are underperforming, with Solana’s SOL leading the pack with a fall of more than 8%. Layer 2 Arbitrium’s ARB and Ton coin’s TONNE both fell by comparable amounts, and Ripple’s XRP lost 5% of its value. Market players were considering the prospect that FTX would obtain a bankruptcy court order authorizing the sale of assets from its $3.4 billion in cryptocurrency holdings when the market started to decline.
A Monday market analysis by Singapore-based Matrix port, a supplier of digital asset services, warned that “an altcoin crash is coming” due to the possibility that FTX could begin selling tokens this week. SOL is under the most pressure because FTX owns that token in the amount of $1.16 billion, according to a Monday morning article by Coin Desk. According to data from Coin Desk Indices, that represents about 16% of its current supply.
Along with $560 million in Bitcoin, the defunct exchange also has hundreds of millions of lesser-known, illiquid micro-cap tokens. The company has already hired investment company Galaxy for digital assets to help with the sales.
Price forecasts for Solana (SOL) and Ethereum (ETH)
According to Matrix port, FTX’s crypto sales may have an impact on altcoin pricing for the remainder of the year. Matrix port noticed that SOL fell from the $19 level with rising volume, describing the action as “concerning” and possibly paving the way for more drops to the next support levels at $15 and then $10. As the protocol’s “revenue growth disappoints,” ETH may possibly fall much worse, warns the company. Technically, the breach of $1,650 causes us to be quite wary about ETH at this time. We can even see a situation in which prices drastically decline before year’s end. The possibility that ETH could fall to $1,000 could resurface if prices fall below $1,500.
According to Markus Thiele, head of research and strategy at Matrix port, “the altcoins of the past bull markets are tainted owing to poor tokonomas and may never come back while we need a new theme for the next generation of altcoins to acquire momentum. “Keeping exposure to bitcoin makes the most sense in the interim.”
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