FTT defied every rational reasoning last week when it resurrected from the dead for the first time since FTX’s collapse.
The FTX token printed green candles sending its prices as high as 120%, the highest in 2023. We recall that the cryptocurrency sparked the collapse of its exchange in November 2022. Although, over the past few weeks, this rally wasn’t an uncommon sight as many flat-lined digital assets recorded decent gains.
Source: Kaiko report
Report from Kaiko, a data analytics firm, superimposed price data with some events related to FTX’s misfortune. The information reveals that the market activity recorded some traction shortly after the exchange’s former boss pleaded not guilty in court. The native token rose from below $1 to about $1.5 before accumulating another momentum that saw it spike above the $2 price mark. FTT began to plummet until Jan 19 after announcing a possible resumption of the defunct exchange. A significant pointer to the fact that the market interest is yet to leave the token totally.
Despite all the negative development surrounding the former exchange, an intriguing question remains how the market making of the FTX token has managed to survive till now? As at the time of writing, there are only six active FTT markets: Binance, Poloniex, Huobi, Coinex, and Kucoin. This number is a huge decline from 28 exchanges before the collapse. According to Kaiko’s report, Binance’s FTT-BUSD pair makes up most of the market activity with over 80% of its trading volume.
Source: Kaiko report
A closer observation of FTT’s market depth reveals that the token supply shown on the order book doesn’t match its recent price action. As of Tuesday, the equivalent of $160,000 FTT lies at 2% of the mid-price. The trade volume has not been impressive, besides a few spikes into the 8 -10 million range. This report suggests that a reason for this seemingly inorganic market activity is that the poor liquidity makes it easier for FTT’s price to rise. These few opportunistic buyers further attract holders waiting to offload their FTT stash.
Do you think the FTX token will continue to enjoy these boys of volatility, or it’s just a facade? Let us know your thoughts in the comments section below.
