- Bitcoin (BTC) has been predicted to lead the general crypto market into a long downturn as FTX commences repayment to customers.
- Another analyst believes that Bitcoin is soon embarking on its prolonged correction triggered by the recent sell-off of all of Binance’s BTC holdings and the rising Consumer Price Index (CPI) inflation.
The crypto market is generally going through a serious downturn as Bitcoin (BTC) declines to $95k, Ethereum (ETH) to $2.7k, XRP to $2.5, Solana (SOL) to $168, and Dogecoin (DOGE) to $0.25. According to our market data, Cardano (ADA) is down by 1.66% in the last 24 hours, trading at $0.76.
The market condition has been predicted to get worse as users with FTX claims of under $50,000 have started receiving their locked-up funds. According to Arkham Intelligence, this batch of creditors represents $1.2 billion worth of assets.
As we reported last week, the next round of repayment distribution is expected to occur on May 30, specifically for customers categorized under “Class 5 Customer Entitlement Claims and Class 6 General Unsecured Claims.” This will include claims of value above $50,000.
Speaking on the potential impact on the market, an FTX creditor advocate called Mr Purple believes that claimants may likely not invest in cryptos due to their traumatizing experience in the past.
In a recent interview with an FTX Creditor, Sunil Kavuri, it was disclosed that many of the affected individuals became suicidal after losing their funds overnight.
We had earmarked funds for buying homes and children’s education. Many were depressed, suicidal, and had panic attacks. I heard of at least three suicides. Many FTX creditors are left in large debts, taking out loans to cover living costs.
SOL’s Reaction and Bitcoin’s Expected Decline
SOL’s struggle amidst the ongoing exercise has also been attributed to the decision of FTX to unlock 11.2 million SOL ($2.06 billion) on March 1. Based on data, this could be one of the largest token releases from its bankruptcy holding. As indicated in our earlier discussion, this is also the final phase of the FTX liquidation process.
Joining the crypto discussion, an analyst identified as Jason Pizzino has cautioned that the market could be gearing up for a “downward ride” as Bitcoin interest significantly declines. According to him, the Google search volume for Bitcoin has dropped to 24 out of 100 while the overall search for “crypto” falls to 12.
Shedding more light on this, the analyst also pointed out that the overall volume of Bitcoin on various exchanges has declined recently. Compared to the $130 billion in trading volume recorded in the previous bull run, Bitcoin has only managed a trading volume of $37 billion at press time.
For the crypto market to rebound from the current trend triggered by the FTX repayment, buying pressure would have to overshadow the selling pressure while the price returns to the February 3 high of $102,600.
For crypto analyst Klarck, Bitcoin’s prolonged correction could be underway due to two main reasons – rising Consumer Price Index (CPI) inflation and the liquidation of Bitcoin holdings by Binance. According to him, Bitcoin would make a further decline to $86k before the “big crash” occurs.
Meanwhile, Standard Chartered Bank believes that the asset would bounce back to hit $500k by 2029. As explained in our last analysis, this is expected to be fueled by institutional adoption from banks, hedge funds, and sovereign wealth funds.
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