Bitcoin ($BTC) investors are moving to buy the dip after the cryptocurrency’s price plunged from around $20,000 to $16,000 after cryptocurrency exchange FTX endured a liquidity crisis that revealed it was unable to process customers’ withdrawals.
According to on-chain analytics platform Santiment, BTC’s 2-year low is being seen by investors as an opportunity to buy the dip, with funding rates showing an “extreme long bias, particularly on FTX.” On the exchange, it’s believed users’ funds are now impossible to withdraw.
Per the firm, users’ “feelings of hopelessness often correlate with higher risk.” The cryptocurrency’s price started crashing after Binance’s move to sign a letter of intent to acquire FTX, and backing out of the deal shortly after citing concerns surrounding the exchange’s business practices and investigations by US financial regulators. FTX’s CEO, Sam Bankman-Fried, told investors on Wednesday that the firm needed up to $8 billion after a bank run saw it halt withdrawals.
As CryptoGlobe reported, FTX saw outflows of 19,947 BTC, worth over $340 million, on November 7, the largest figure since September 10, 2021 when the exchange recorded more than 45,000 BTC outflows.
Moreover, on November 7 FTX recorded the “largest number of withdrawal transactions in its history,” which suggests users “were concerned about the current situation” and were potentially allocating their assets to other exchanges.
At the time of writing, Bitcoin is trading t around $16,200, dropping from more than $21,000 at the beginning of the month as the crypto market appeared to be gearing up for a recovery.
Recently, TRON DAO Founder Justin Sun said he is “putting together a solution together with FTX to initiate a pathway forward” after Binance decides to “not pursue the potential acquisition of FTX.com.”
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