Matrixport Warns of Altcoin Crash Snowball Effect Starting With FTX Coin Sell Off
FTX creditors could start selling $685m in SOL holdings | Credit: Shutterstock
- FTX is expected to sell at least $3.4 billion worth of cryptocurrency so that it may give its consumers cash back instead of tokens.
- Venture capital funds are also under pressure to pay back their investors’ money, making them another significant seller of crypto assets in addition to FTX.
According to a new estimate by the cryptocurrency startup Matrixport, FTX may sell at least $3.4 billion worth of cryptocurrencies to reimburse its consumers in fiat money rather than cryptocurrencies, which might cause volatility in the altcoin market for the remainder of the year.
Solana, ApeCoin, and Axie Infinity Emerge as Potential Challenges
The cryptocurrency exchange FTX, which declared bankruptcy in November 2022, stated that it intended to sell $200 million worth of cryptocurrencies per week, according to Matrixport. This indicates that the defunct exchange would keep offering its stock of cryptocurrencies for sale till the end of 2023.
“FTX creditors could start selling $685m in SOL holdings, beginning this week — at least $3.4bn worth of crypto is expected to be sold FTX, which should create an overhang for Altcoins for the rest of the year. During last week, SOL declined by -6%,” the company stated .
Matrixport did not immediately respond to a request for comment.
According to Markus Thielen, the company’s research director, the SOL funding rate has turned negative (-14% annualized) in anticipation of these sales and may go lower yet. SOL broke the $19 support with a strong volume yesterday. This is worrying since the $15 and $10 target levels are more important, claims Thielen.
The planned ApeCoin (APE) unlocks, which would allow [mainly] insiders to sell a further 11% of the outstanding tokens—or $50 million—on Saturday, September 16/17, were also mentioned and are blamed to have led to ApeCoin’s loss over the previous week to 10%.
Additionally, a large token unlock event is planned for October 20th, when Axie Infinity (AXS), which makes up 11% of the circulating supply, will unlock AXS. The price of AXS dropped by 32% as a result of the prior unlock event on July 22nd, according to the report. A comparable price fall is predicted to occur after the anticipated token unlock event.
Ether Could Decline to $1,000?
As the issue of 15k Ether is greater than the 11k Ether burned last week, Ethereum is also proving to be less “ultrasound money,” said Thielen and added that it’s important to keep an eye on what this implies (or even if it matters).
“Still, with Ether being close to the psychologically important $1,600 level, a break could carry prices lower, especially as revenue growth disappoints,” he wrote .
Technically, the breach over $1,650 causesd the company to be quite wary of Ethereum at this time.
Thielen says that it’s even possible to see a situation in which prices considerably decline before year’s end.
A drop below $1,500 would revive the notion that Ether could fall under $1,000, a price that would seem reasonable given the Ethereum ecosystem’s revenue projections (see our earlier forecasts), he commented.
The price of Bitcoin (BTC) is $25,836 less than the 50-day moving average ($27,731), which is bearish, while the cost of WoW increased by -0.5%. While the price of WoW increased by -1.1%, the price of Ethereum (ETH) is $1,617 lower than the 50d MA, which is also bearish.
The overall downward trend suggests that there is a bearish attitude. Weekly BTC volume declines are -37%, while weekly ETH volume declines are -31%. Price downside risk may be a concern during this period of low liquidity.
At the moment, Thielen concludes , Ethereum performs worse than Bitcoin because the ETH/BTC ratio is falling, according to the trend (20d) MA.
