Bitcoin and Ethereum have continued to slide with traders concerned that other crypto exchanges could follow after the collapse of FTX.
The largest coin by market cap, Bitcoin, lost 6.6% to US$15,727 within the last trading day. Ethereum on the other hand fell by 14% to US$1,089 since this time yesterday morning.
According to Naeem Aslam, a market analyst at Avatrade, news that crypto exchange Genesis needs a US$1bn capital injection “shows how interconnected this whole world of crypto really is.”
However, he suggests that traders need to keep in mind that the issue with Genesis - as it was with FTX - did not revolve around cryptocurrency, but with individuals or corporates who failed to use correct measures or practices.
“This issue is not with the space as it is still very flourishing, and the value that Bitcoin provides hasn’t changed, and it will not change. But the confidence in the industry has certainly been shaken up, and this is not a positive thing for now,” he added.
Aslam believes investors should keep an eye on Genesis and the other exchanges which may also be seeking additional capital.
Any exchange that goes under, he said, could hit sentiment further and see the Bitcoin price break US$15,000.
Ipek Ozkardeskaya, a senior analyst at Swissquote, believes that “it’s hard to convince new money to join the market in the middle of the turmoil,” and suggests that Bitcoin could go as low as US$12,000.
Among some of the altcoins, Polkadot was down 3% to US$5.05, Solana was down 2% to US$11.49 and Litecoin jumped 1.5% to US$61.74.