Investor confidence in cryptocurrencies has been hammered after FTX collapsed, sending shockwaves through the entire industry.
More than $1.3 trillion has been wiped off the cryptocurrency market so far in 2022 as the fallout from the FTX collapse continues to weigh on investor confidence.on Wednesday rose to a two-week high as investors continue to weigh up the fallout from the collapse of cryptocurrency exchange FTX.
But one analyst warned that the bounce is likely just a bear market rally and would not be sustained.Bitcoin topped $17,000 trading at its highest level since Nov. 15 before paring gains. The world's largest cryptocurrency was trading 2% higher at $16,879.50 at around 2:37 a.m. ET.Vijay Ayyar, vice president of corporate development and international at crypto exchange Luno, said the move higher was likely a result of "over leveraged shorts covering.
Someone who shorts an asset borrows some of that asset, sells it at a higher price then buys it back at a lower price and banks the profit from that. A short covering is when a trader buys the asset back at the lower price. That can cause the price of that asset to move higher. Ayyar said the price of bitcoin has "hit resistance" at $17,000 and is likely to go lower from there.Investor confidence in cryptocurrencies has been hammered after Sam Bankman-Fried's exchange FTXContagion from the fallout is spreading. Crypto lender and exchangeMore than $1.
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