Bitcoin climb fails to dispel fears that FTX contagion is 'far from over'

Bitcoin climb fails to dispel fears that FTX contagion is 'far from over'
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(Nov 29): Worries about contagion from the implosion of digital-asset exchange FTX clouded a rise in bitcoin and other cryptocurrencies on Tuesday.

The largest token rose as much as 2.1% and was trading at about US$16,485 (RM74,318) as of 10.23am in London. Second-ranked ether also posted gains, while meme token dogecoin surged 10% at one point.

Bitcoin has so far mostly weathered BlockFi Inc's bankruptcy on Monday. The crypto lender unravelled in the wake of the chaotic demise of Sam Bankman-Fried's FTX and sister trading house Alameda Research.

The crypto world is now nervously watching for further fallout from FTX, with the spotlight trained on the likes of struggling brokerage Genesis.

"The credit contagion is far from over," said Cici Lu, founder at Venn Link Partners, a crypto consultancy. There is "still very low visibility, in the second and third layers of counterparty risk, in terms of who's exposed to what", Lu added.

Bitfront, a crypto exchange backed by Japan's social media giant Line Corp, said it is shutting down amid industry challenges but indicated the step is not connected to the collapse of FTX.

Chart omen

Bitcoin chart patterns continue to flash warning signs about the token's outlook. An analysis based on plotting sessions when the token moves up or down by at least 10%, a so-called point and figure study, signals the coin is at risk of testing support levels running as low as about US$10,000.

Both bitcoin and a gauge of the top 100 tokens have shed more than 60% this year, a rout that contributed to a spate of blow-ups at crypto outfits.