FTX Token (FTT), the native cryptocurrency of the troubled exchange, has undergone a turbulent week, losing its value by over 80% at some point. It remains to be seen, however, whether the token will rebound to its pre-FTX liquidity debacle levels before the end of 2022, now that the asset is exhibiting signs of a short-term recovery.
In particular, FTT was trading at around $25 on November 4, before it abruptly crashed on November 8. In the days that followed, the token traded as low as $2 before it started to regain some of its losses.
Indeed, by press time, the token was trading at $3.47, gaining by about 36% in the last 24 hours, with the daily chart indicating a price peak of $4.11.
The token’s latest rally has been inspired by the general cryptocurrency market gains in the wake of the slowing United States inflation rate. In this line, investors appear unfazed by the FTX drama by continuing to pump more capital into the asset. Notably, over the last 24 hours, the token has attracted about $109 million in capital.
FTT technical analysis
Despite the ongoing FTT gains, technical analysis remains skeptical. In particular, a summary of the technicals is for ‘sell’ at 15, while moving averages are fronting ‘strong sell’ at 13 on the daily gauges. Elsewhere, oscillators are aligning with neutral at seven.
Furthermore, the gains followed the development that FTX made $34 million in trading fees from the last time it burned the FTT token on Oct. 31. At the same time, the token appears to receive support from crypto exchange Binance despite the platform withdrawing a proposal to buy FTX.
Initially, Binance had announced that it would liquidate all its FTT holdings, but on-chain data highlights that the trading platform might still be holding part of the tokens. A review of the address shows Binance still has $59 million worth of FTT.
What next for FTT?
In general, the prospects of FTT regaining its previous high will largely depend on the FTX exchange’s ability to resume normal operations. Notably, FTT holders enjoyed lower trading fees and the ability to earn interest and rewards like waived blockchain fees.
At the same time, it will be interesting to monitor if FTT follows the trajectory of tokens of crypto projects whose parent businesses were shaken up by the prevailing crypto winter. As reported by Finbold, such tokens recorded significant gains mainly inspired by community activities like short squeezes.
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