FTT Token Plummets After Court Approval – Is a Complete Crash Coming?

The native token of bankrupt crypto exchange FTX continues to decline. Even though it is still in an upward trend, things are not good for people invested in FTT token. The price started to decline on October 7 from a price point of $3.060. Let’s explore why FTT investors are at risk and what can happen with the token.

The FTT Token Continues To Fall

On October 7, FTT token took a sudden surge of 56.80% to reach $3.422 ahead of the  confirmation hearing for the FTX bankruptcy case. This was the final hearing and people were looking towards the court if it will approve or deny the repayment plan of the fallen exchange. As the court accepted the plan, FTT token started to plummet from $3.060. At the time of writing the token has taken a hit of 24.45% and is trading at $2.3160.

Chart Data For FTT Token

The price of FTT token continues to move in an upward parallel channel if we check the hourly chart. However, currently it lies exactly at the lower range of the channel and the bearish momentum suggests that it is going to take a downward breakout. FTT token price is supported by Moving Average 200 at $2.293 and it is the last supporting moving average. The remaining averages are building a downward pressure on the price. Other technical indicators such as RSI and MACD are also supporting the falling price. The signal line has crossed over the MACD line. The histogram gives a clear signal of bearish momentum. The RSI on the other hand has also fallen to 41.84 points.

Possibility of Liquidation

Now that the court has approved the repayment plan of the FTX exchange, the FTX estate can liquidate the FTT token to collect funds. Even the coinmarketcap has published a warning to the investors on the FTT token page. The investors are advised to stay clear of the token as the token might be liquidated any time by the estate. FTX in its press release on October 7 has stated that it will be returning a 100% of the bankruptcy claim amounts plus interest for non governmental creditors. The data for its whole case can be found on the Kroll page for FTX case.

Looking Ahead!

FTX has creditors across 200 jurisdictions across the globe and the estate is working to finalize the arrangement. Amidst this process, FTT token might see a surge in price however investors are at huge risk. When the estate will announce the liquidation of the native token, it will spread a market wide panic causing investors to lose their investment. I have shared this warning in another article dated October 2. It would be in the best interest of the investors to manage their positions before any official news comes out. The estate will liquidate the token sooner or later to collect funds for repayment, as it clearly has no use case anymore.

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