The apex coin was seen trading higher intraday on Tuesday evening as the global cryptocurrency market cap rose 0.6% to $850 billion at 10:26 p.m. EST.
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Why It Matters: Bitcoin and Ethereum were seen in the green at the time of writing even as contagion concerns remained in place after the collapse of FTX and Alameda Research — companies founded by Sam Bankman-Fried.
On Tuesday, it was reported that cryptocurrency platform BlockFi is reportedly ready to file for bankruptcy to mitigate its exposure to FTX.
Edward Moya, a senior market analyst from OANDA, said, “Cryptos did not selloff on the BlockFi news as much of the cryptoverse knew ties between FTX and BlockFi were strong.”
“Bitcoin is showing resilience here but it is hard to imagine investors are ready to test the waters until we learn more of the full contagion risk associated with FTX. If more exchanges or crypto companies pause withdrawals or limit activity, that will likely bring back the pressure on cryptos,” said Moya, in a note seen by Benzinga.
Meanwhile, other risk assets like stocks were seen trading lower. S&P 500 and Nasdaq futures were down 0.3% each at the time of writing. Investors will look out for retail sales data due on Wednesday and will be glued to more company earnings.
Investors were jittery as Russian rockets pounded eastern Poland on Tuesday killing two people. Poland, a North Atlantic Treaty Organization (NATO) member, has convened a meeting of its national security committee in the aftermath.
Cryptocurrency trader Justin Bennett said Tuesday that “$17,000 is key.” He said, “$16,992 is the location of last weekend’s CME gap (Friday’s close). So far, the bulls have been unable to secure a 4h or even a 1h close above it. A close above is needed to extend this rally. Close below $16,750, and it’s back to $15,800.”
CME gap refers to the difference between the trading price of Bitcoin futures contracts when the market opens on Sunday and when it closes on Friday.
CryptoQuant analyst Tomáš Hančar noted that Bitcoin miner reserves fell by nearly 4600 BTC in the past seven days, reaching the lowest levels since the beginning of the year.
“Apparently, AT LEAST SOME miners must have been spooked by the recent FTX collapse and decided to sell,” wrote Hančar.
The analyst said that the “worst may finally be behind us” considering that everybody was “probably expecting Bitcoin to be trading way, way lower in the light of things that took place since 7th November with FTX and the contagion around it.”
Dylan LeClair, a cryptocurrency analyst said that the FTX exploiter address, which has been dumping all other drained assets for Ethereum, is now one of the largest holders in the world with 228,523 ETH valued at $284.82 million.
“Everyone should keep an extremely close eye on what happens next…,” said LeClair.