No sooner than Binance CEO, Chanpang Zhao (CZ) compared the FTT price plunge with the unfamous LUNA price slash, hefty withdrawals were registered in a very short time frame. Interestingly, the indicators point toward the revival of the bearish trend and hence the token is expected to continue shedding its value ahead.
In the meantime, the question still arises whether one should end FTT or wait for a remarkable recovery.
The market trends seem to have flipped largely as Bitcoin failed to secure its levels beyond $21,000. However, the dropping market sentiments were further fueled as Binance plans liquidated all their FTT tokens in the coming days. This led to a huge FUD which compelled the market participants to exit the FTX exchange hampering the FTT price rally.
Binance Exchange, which ran out of FTX capital a year ago, received $2.1 billion in BUSD and FTT stablecoins as compensation. Now, as the popular exchange prepares for liquidation, will it create a death spiral within the markets as it did during the Luna-UST collapse?
It has to be noted that Terra’s collapse was incorporated with other elements like the failure of an algorithm stablecoin. This compelled the platform to liquidate more than 80K BTC which further dragged the entire market down. However, the crash further created a huge domino effect on the other platform which were directly or indirectly related to the Terra ecosystem.
Currently, there are no BTC at stake, but the possibility of a massive price drop cannot be completely ruled out. The liquidation of billions of FTT tokens could certainly exert significant bearish pressure on the space, but the bulls could also mount a strong rally at the right time.
