Investors speculate Alameda is pulling liquidity as crypto market nosedives
|- FTT price lost its critical support at $21.6 on Monday to decline to $17.9.
- The ongoing Alameda and FTX controversy picked up heat after Binance's decision to sell its FTT holding.
- The consistent panic sell-off has led to the crypto community labeling the current situation as a possible bank run.
FTT price noted a further decline on Monday after the Alameda balance sheet controversy intensified following Binance CEO Changpeng Zhao and Sam Bankman-Fried's(SBF) comments. Along with FTX’s exchange token FTT, Solana price noticed a massive nosedive on November 8.
Adding liquidity to FTX & Alameda’s woes
Many traders are speculating that Alameda, FTX’s sister company, might be pulling liquidity on FTX pairs.
Hsaka, a well-known trader and influencer, tweeted the possibility of Alameda pulling liquidity for spot pairs.
Looks like Alameda decided to stop providing more exit liquidity? pic.twitter.com/8wy7DOBqJY
— Hsaka (@HsakaTrades) November 8, 2022
Looks like Alameda decided to stop providing more exit liquidity? pic.twitter.com/8wy7DOBqJY
— Hsaka (@HsakaTrades) November 8, 2022
FTX exchange’s native token FTT, seems to be on a freefall registering a 38% drop in the last 48 hours. Solana, another token closely associated with SBF, has dropped 32% in the same period.
CZ vs. SBF controversy continues
While CoinDesk's revelations came approximately a week ago, most of the market reacted only after Binance CEO CZ's tweets. CZ mentioned that his company would be selling off all its FTT holdings, further justifying the move as risk management. He tweeted,
"Liquidating our FTT is just post-exit risk management, learning from LUNA. We gave support before, but we won't pretend to make love after divorce. We are not against anyone. But we won't support people who lobby against other industry players behind their backs. Onwards."
Regardless, FTX's CEO, Bankman-Fried continues to reassure the community that FTX and all its assets are fine. He appealed to CZ to work together for the crypto community.
Although the billionaire assures investors about balance sheet concerns, investors are already panic selling their holdings. If this story continues to develop in the direction that it is going, the crypto markets could witness the third biggest implosion after Terra-Luna, lending platforms and Three Arrows Capital.
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