SOL and FTX Token saw a sharp rebound after headlines that Binance would acquire FTX due to liquidity issues, but will the upside last?
FTX Token FTT
$5.06 and Solana’s SOLSOL$24 endured a tough weekend of trading that saw altcoins take double-digit losses in the 15%–30% range, but the tide turned as news broke that Binance could be in the process of acquiring FTX.
On Nov. 8, FTX CEO Sam Bankman-Fried first took to Twitter to announce a liquidity-sharing partnership with Binance. Changpeng “CZ” Zhao, CEO of Binance, agreed to step in and provide liquidity to what was beginning to look like a bank run. Bankman-Fried billed the development as user-focused and benefiting the entire industry.
CZ also confirmed that Binance would step in to assist FTX with its liquidity crunch, with the CEO tweeting a letter of intent to purchase FTX.
Since Nov. 7, FTX has been experiencing liquidity issues after news broke surrounding Alameda Research’s odd-looking books. As FTX was fighting off withdrawals from their exchange, even freezing withdrawals at one point, Binance announced it would sell the entire FTT allocation it possessed.
During the disagreement between exchanges, FTT price dropped 38.7% from $25.71 to $15.76, and SOL price fell 31.23% to a five-month low at $25. After news of a potential agreement between FTX and Binance, FTT price bounced more than 20%, but it still trades well below what had been long-time support at $22.
The price of BNB BNB$320 has also suffered over the past few days, dropping by 14%, but the news of Binance agreeing to acquire FTX was followed by the exchange token staging a 25% rally within the hour.
While the story is developing and many unknown variables remain, the broader crypto market has reacted positively to the news. Bitcoin BTC$18,515 briefly rallied over $20,000 before slipping back into the $19,800 range, while Ether ETH$1,322 continues to trade above $1,500.
