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As FTX Token Consolidates, What’s Next for FTT?

Last Updated December 13, 2023 1:54 PM
Nikola Lazic
Last Updated December 13, 2023 1:54 PM

Key Takeaways

  • FTX contests a $24 billion tax bill from the IRS.
  • FTT token consolidated, marking a new high of $6.
  • Chart analysis points out a potential reversal.

As the dust settles on the latest market movements, all eyes are on the FTX Token (FTT), which shows signs of consolidation. Investors and traders keenly watch the token’s performance, pondering the critical question: what’s next for FTT ?

Amidst a backdrop of volatile markets and shifting regulatory landscapes, the future of FTT hangs in a delicate balance. This article will delve into the factors that could influence FTT’s trajectory in the days ahead, examining technical analyses and the broader market sentiment that could shape the path of this prominent crypto asset.

Ongoing Legal Battle 

FTX is contesting a massive $24 billion tax bill from the IRS, arguing several points in its defense. The exchange notes that it operated for three years without paying dividends or profits. It also experienced considerable losses, countering the IRS’s claim for substantial taxes.

FTX also points out that it is currently undergoing liquidation and has ceased all business activities except those necessary for the liquidation process.

Furthermore, FTX argues that satisfying the IRS’s demand would divert funds from the victims of the exchange’s collapse, who are already experiencing significant financial setbacks. With around $7 billion recovered by FTX’s administrators, including $3.4 billion in cryptocurrency assets, the dispute highlights the intricate financial situation FTX finds itself in against the IRS.

As the legal battle looms, FTX remains steadfast in its stance that a court-overseen evaluation would reveal its substantial operational losses, potentially deeming the IRS’s tax assessment unfounded. The resolution of this case is poised to set a precedent for cryptocurrency taxation and will be a pivotal moment for those affected by the FTX debacle.

FTT Price Consolidates

Meanwhile, the price of FTT has been consolidating after pulling back above its horizontal support at around $4.50. 

Ending structure
Rising wedge formed

Following its impressive 400% surge in November, culminating in a peak of $5.50 on the 10th, there was a retracement to its lower horizontal area just below $3. A subsequent uptrend commenced, albeit with diminished momentum, gradually reclaiming levels above the November 10th high.

On December 10th, a new high at $6 was attained, but the price swiftly retreated to $4.50. The formation of an ascending triangle suggests that this could signify the conclusion of the recovery. Now, positioned at its support level, the upcoming observation will determine whether a downside breakout is imminent.

Should such a breakout occur, FTT’s price might sharply return to $3. Conversely, a bounce could indicate a renewed attempt to continue the uptrend. However, achieving a new high above $6 seems improbable at this juncture. Consequently, even in the event of a bounce, the recovery may be short. This may pave the way for a subsequent descending move.

Disclaimer

Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.

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