Panic selling in cryptocurrency market amid FTT and macro risks

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The cryptocurrency market witnessed panic selling as investors feared over insolvency rumors of crypto exchange FTX. The Bahamian company’s native token FTT has dived on exchanges. FTT tokens are under pressure despite FTX founder Sam Bankman-Fried denying the rumours. The biggest cryptos Bitcoin and Ethereum plunged drastically, weighing on the market’s overall performance.

At the time of writing, on CoinMarketCap, the global crypto market cap is around $984.18 billion – down 4.07% from the last day. On the other hand, in terms of volume, the market rose by 46.68% over the last 24 hours to $118.03 billion. Bitcoin’s dominance fell by 0.24% in the last 24 hours to 38.58%.

Currently, the largest cryptocurrency Bitcoin is trading at $19,776, down 4.7%. While second largest Ethereum fell by 5% to trade around $1,491. Both BTC and ETH have now recorded nearly 4% and 6.4% declines on a weekly basis.

Among the top 10 cryptocurrencies, by percentage, Dogecoin was the worst hit, falling over 10%, followed by XRP, which lost almost 6% on Tuesday. DOGE’s weekly drop is now over 34%, while XRP is down almost 5% in 7 days. Other cryptocurrencies such as Tether, USD Coin and Binance USD are trading largely unchanged. Binance’s token BNB is performing erratically, but in 7 days the crypto is up almost 2%.

FTX’s token FTT fell by almost 20%. It was the most popular cryptocurrency on the market. FTX is struggling to hold its $18 mark. Its weekly drop is more than 30%, while the token’s one-month drop is over 24%.

Investors are offloading FTT tokens on insolvency rumors after a CoinDesk report revealed that Alameda Research’s balance sheet was heavily stacked with FTT tokens.

According to the report, Alameda has assets worth approximately $14.6 billion. It stated that Alameda’s largest assets were $3.66 billion and locked in FTT, while its third largest assets were worth about $2.16 billion in FTT security. That said, more than $5 billion of Alameda’s assets are FTT — raising questions about its solvency. Alameda is the sister company of FTX.

Following the news, FTX founder and CEO Sam Bankman-Fried has been criticized for his legislative proposals.

A cryptoanalyst Miles Deutscher tweeted saying that Sam Bankman-Fried was once admired as the king of crypto. Now Alameda and FTX are rumored to be on the verge of bankruptcy.

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