Bitcoin showed signs of recovery after a disastrous week in which over US$1.3tn was wiped from the cryptocurrency markets.
Having fallen over 27% following the collapse of FTX – formerly the world’s second-largest digital asset exchange – bitcoin managed a healthy 10% recovery on Thursday, and is today changing hands at US$17,300.
Though still US$5,000 down from its pre-crash position, there is at least some evidence of a sharp recovery.
Bitcoin was largely unaffected by the FTX crash, and the currency remains highly liquid, so this week’s events shone a light on the efficacy of crypto contagion in spreading through the market.
Hope for a bitcoin (BTC) recovery on the four-hour chart – Source: currency.com
Ethereum is also showing strong evidence of a recovery. Having lost 35% of its market value ths week, the second-largest cryptocurrency bounced back nearly 20% to change hands for US$1,270 as of Friday morning.
Solana (SOL), which was the worst-hit large-cap network token due to its exposure to FTX, is still down 50% week on week, though a 25% relief rally on Thursday brought the coin’s market value back above US$6bn.
Polygon (MATIC) and Litecoin (LTC) have both managed to recover 20% of their losses, while Cardano (ADA), Dogecoin (DOGE), Polkadot (DOT) and Ripple (XRP) are also stabilising.
As for FTX Token (FTT), while it has bounced back slightly, the fallen exchange’s native cryptocurrency’s market cap of US$435mln is barely a 10th of what it was only a week ago.
With more and more evidence of FTX founder Sam Bankman-Fried’s mishandling of customer funds coming to light, FTX holders will struggle to ever regain their losses.
FTT goes down – Source: CoinMarketCap
Global crypto market cap has added US$40bn in the past 24 hours, in part due to a stock market rally as investors seek out riskier assets following a drop in the US Dollar Index.
The decentralised finance (DeFi) space saw nearly 20% of value withdrawn across all protocols during this latest crisis, but there are signs of a recovery underway as spooked DeFi users return.