These Altcoin Shorts Have Exploded: The Exchange Is Selling Those Coins!

Traders remain impressed by Binance’s decision to liquidate altcoin FTT holdings. In the wake of the controversy surrounding Alameda’s balance sheet, crypto exchange FTX’s native token is arguing to hedge against a possible drop in FTT. Here are the details…

Altcoin market bustling: short positions increase in FTT

According to CoinGlass, the dollar price allocated to open position or futures and perpetual futures contracts linked to FTT increased from $87.56 million to $203 million overnight. That is, it more than doubled to a 12-month high. The funding rate fell sharply to 36 percent year-on-year, according to data provided by Matrixport Technologies. A negative funding rate indicates that open positions, or bearish in crypto, prevail. This indicates that investors are willing to pay funds to long positions to keep their positions open.

The combination of increased open position and negative funding rate indicates that traders are short on FTT. Strategy research leader at Matrixport, Markus Thielen, pointed out that many new short cases have been opened in FTT in the light of new information. Process volumes in the FTT spot market increased from $58 million to $3 billion. “Last week, Alameda’s balance sheet was questioned,” said Griffin Ardern, a volatility trader at crypto asset management firm Blofin.

Koindeks.com As we have also reported, Binance has also announced that it will liquidate FTT and other assets related to the FTX exchange. According to the expert, this seems to have caused panic amid investors choosing to hedge their assets like FTT. “FTT holders have to stop losses by selling short,” Ardern said. Currently, the price of the coin is quickly above $22, down 5%.

What had happened?

On Sunday, Binance CEO Changpeng “CZ” Zhao tweeted that he will liquidate the remaining FTT tokens he acquired last year as part of the exit from Alameda’s sister company FTX. Zhao cited reports of Alameda holding $3.66 billion in unlocked or illiquid FTT tokens on its balance sheet. “Due to recent reports coming to light, we have decided to liquidate any remaining FTTs on our ledgers,” he said.

“We are selling our FTT as an exit strategy in light of what we learned from LUNA,” Zhao said. As it is known, Terra’s LUNA token (now LUNC) crashed in May. It wiped billions of dollars off the market and investors. According to crypto exchange Phemex, Alameda owns more than 50 percent of the FTT token. Therefore, a continued decline in the price of the cryptocurrency could have market-wide consequences. Because as the price drops, Alameda will be the only buyer.

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