Experts forecast ‘uncomfortable turbulence’ in the market amid the FTX-Binance clash

Binance’s exit from its investment in FTX and plans to divest the platform’s token triggered on November 8 the latter’s decline by almost 30% and a slide in Bitcoin quotes to around $19,500. The standoff between industry giants in the bear market in the near term threatens significant upheaval for market participants, ForkLog cited experts as saying.

According to Roman Nekrasov, co-founder of ENCRY Foundation, the current situation should not be interpreted as Binance’s intent to destroy FTX and Alameda Research.

“However I readily believe in Binance’s desire to pull the blanket over itself, increasing the share of its BUSD token on the market as many investors in a panic begin moving into stablecoins,” he said.

The expert did not rule out that in the coming days or weeks Binance may reverse its decision to sell the remaining FTT on the open market in favour of selling Alameda’s own tokens. In addition, turbulence during this period could be “very uncomfortable,” especially for newcomers to the crypto market who did not witness 2014 or 2018, he noted.

“Turbulence is not only a fall; it is also sharp, poorly forecast spikes upward. So over the next few weeks we may well see both panicked selling and, soon after, buying by more optimistic investors of undervalued assets,” explained Nekrasov.

In the medium- and long-term, macroeconomic factors will continue to weigh on the crypto market: an increase in the policy rate in the United States and Europe, high inflation and the risk of stagflation.

“Overall, nothing good is in store for the next six months. But some may get lucky and ride the waves of instability sparked by the Alameda/FTX situation,” the expert said.

The head of the Gear ecosystem, Pavel Salas, expressed concerns about FTX’s liquidity, which trails Binance in trading volumes. Alameda Research’s offer to buy back FTT tokens at $22 had not previously found support from Changpeng Zhao.

“The inability to repurchase the token and breaking through the $22 level will most likely lead to an even deeper drop in FTT and the further collapse of the entire structure. Securing additional credit to sustain the price will be extremely difficult,” the expert believes.

He recommends monitoring the situation for a couple of weeks, refraining from short positions in cryptocurrencies during that period. If FTX collapses and there are subsequent sell-offs, Bitcoin and Ethereum could also face a fairly strong blow, Salas warned.

CEO of Indefibank, Sergey Mendeleev, believes that such a situation on the day of the United States Congress elections “could not have happened by accident.”

“FTX will probably be ground down in the end, and if not to bankruptcy, then to very serious liquidity problems. But many had sharpened their teeth since the Luna dump suspicions; the collective unconscious, in the end, manifested in today\’s situation, when Alameda was pushed on numbers more for amusement than for practical considerations,” he said.

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