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FTT traders might want to hold their horses before buying because…

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Source: Pixabay


The FTX exchange is going through its roughest phases in recent history. Its native token FTT suffered a major crash in the last few days following rumors that the exchange might be on the blink of insolvency.


Here’s AMBCrypto’s price prediction for FTT


The insolvency rumors caught fire following a major transaction in which roughly 23 million FTT was sold. Upon further inspection, it was revealed that Binance was the seller that offloaded the large FTT amount worth over $500 million.

Binance CEO CZ released an official statement revealing that his exchange opted to liquidate the remaining FTT in its portfolio.

The statement by the Binance CEO confirms that Binance cleared the FTT in its portfolio in an attempt to minimize exposure.

The decision is not surprising given that the market has already experienced the impact of crypto companies going bankrupt.

The latest concerns over Alameda and FTX potentially facing insolvency have the market on the edge. The massive FTT sell-off we have seen in the last few days is a testament to the prevailing investors’ concern.

FTT price action

FTT peaked at $26.43 at the start of November, before embarking on a sell-off by slightly over 18% to as low as $21.42.

Its $22.40 press time price may indicate a slight recovery but the ongoing concerns about FTX and Alameda may trigger more downside.

FTT price action

Source: TradingView

FTT’s sell pressure resulted in a retest of its 2022 bottom range, with the price coming close to the current year-to-date low.

But is the FTX native coin out of the woods yet? A look at its on-chain metrics may help provide a better view.

The amount of FTT in circulation went up in the last few days as more coins flooded the market courtesy of the liquidations.

Active withdrawals also experienced the largest monthly spike with withdrawals peaking at 127 a few hours before press time.

FTT metrics

Source: Santiment

The above-mentioned information confirms an increase in activity especially oriented towards exiting FTX.

This observation was also confirmed by a spike in whale transaction count (transactions over $1 million). These transactions notably increased in the last few days. At the same time, the supply held by top addresses dropped by a substantial margin.

FTT metrics

Source: Santiment

These observations confirm that whales have been selling off their FTT in light of the recent concerns.

Conclusion

FTX is one of the biggest crypto exchanges and the ongoing situation may severely dent its reputation. We have seen crypto companies crash and burn and it would not be surprising to see FTX suffer the same fate. On the other hand, the extent of the danger remains uncertain and may even be exaggerated.

The fact that whales are selling confirms that the market is spoofed. FTT might be discounted for now but buying the dip before the danger passes might be too much of a risk.

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Michael is a full-time journalist at AMBCrypto. He has 5 years of experience in finance and forex and more than two years as a writer in the crypto and blockchain segments. Michael's writing at AMBCrypto is primarily focused on cryptocurrency market news and technical analysis. His interests include motorcycles and exotic cars.

Disclaimer: AMBCrypto's content is meant to be informational in nature and should not be interpreted as investment advice. Trading, buying or selling cryptocurrencies should be considered a high-risk investment and every reader is advised to do their own research before making any decisions.