With the former FTX CEO's arrest, the crypto market has now shifted its focus to improving macroeconomic conditions, analysts said.
The arrest of Sam Bankman-Fried in the Bahamas and the subsequent unsealing of a U.S. indictment against the former FTX CEO has seemingly calmed the market, with ether (ETH) and bitcoin (BTC) both posting modest gains during the Asian trading hours.
Ether posted on-day gains of 4.46%, according to CoinDesk market data, coming in at $1,332 by late afternoon Asia time. Bitcoin gained 3.7%, hitting $17,805.
Bitcoin recently hit a one-month high earlier this week ahead of U.S. inflation data, and its dominance has cracked 41%, CoinDesk previously reported. Digital assets are generally rising as traders expect the Federal Reserve to slow down its inflation-fighting interest rate hikes.
"This is the main trigger in the increase in prices," Raphael Kim, the founder of Seoul-based crypto VC Reframe, told CoinDesk. Kim said the lower-than-expected data in the CPI was a relief to many traders, who are building a post-FTX investment narrative.
Many other tokens on the CoinDesk 20 were up during the Asia afternoon trading session, in particular those associated with layer 1 tokens including Avalanche (AVAX0, up 7.3% to $13.69, Solana (SOL) up 7% to $13.94, and Cosmos (ATOM) up 6.9% to $9.92.
Data from CoinGlass shows that traders who held short positions have faced immense liquidation pressure over the last 24 hours. In total, $119.51 million in positions have been liquidated, with 83% of them being shorts.
Meanwhile, Binance’s exchange token, BNB, is up 4% to $274.
Nansen data shows that the netflow to the exchange flipped positive during the last 24 hours to $715 million. During the Tuesday trading day outflow hit nearly $2 billion over regulatory concerns and news that the exchange was temporarily suspending USDC withdrawals.
Changpeng "CZ" Zhao, Binance founder and CEO, tweeted that he welcomes the “stress test” and suggested that all centralized exchanges should have similar regular tests. While the exchange doesn’t appear to have a liquidity problem at this time, CZ has warned staff to expect “turbulent times” ahead.
Data from Nansen shows that Binance currently has reserves of $57.4 billion. OKX, the next exchange on the list, has reserves of $6.7 billion, while Crypto.com, in third, has reserves of $3.4 billion.