FTX Token (FTT) saw massive gains on Thursday as news of former CEO Sam Bankman-Fried making bail spread across the space. The rapid uptick in the price of the token showed the positivity, albeit brief, that had spread across investors in the token. However, as the dust settles on the disgraced founder, the question now becomes whether the digital asset can hold the gains from yesterday.
On Thursday, Bankman-Fried’s parents had put their home up to raise money for the $250 million bond put on the former CEO, with friends and associates speculated to have helped come up with the 10% collateral required for his release. However this was achieved, Sam was released under house arrest.
Soon after the news broke, the price of FTX’s native token FTT made a significant jump. After trending just below $1 for the better part of the week, the 65% push had brought it above $1.1. This brought renewed vigor to the market and momentum rightfully picked up.
FTT price spikes following SBF making bail | Source: FTTUSD on TradingView.com
The problem now is that FTT has not done a good job of holding onto these gains. Naturally, the brief surge in price had triggered sell-offs among investors looking to take out some profit, triggering another fall below $1. In the early hours of Friday, there had been a 9% jump that brought FTT’s price above $1 once more, but even this would not hold.
Support remains weak at $1 and it is now a battle between the bears and the bulls to turn this critical level in their favor. Right now, the bears remain in control of the digital asset with the price sitting at $0.96, and FTT has struggled to break the resistance mounting at $1.
What About FTX?
For many in the space who lost money when the FTX crypto exchange collapsed, this is just the beginning of the battle. Charges have already been brought against Bankman-Fried and his associates in what is being called the ‘largest fraud of the generation’ but there is still a long way to go.
On Thursday, it was reported that Paul Hastings LLP had been appointed by a committee to represent the interests of creditors in the FTX bankruptcy case. So far, the new FTX CEO John J. Ray III said he and his team had been able to recover around $1 billion worth of assets.
Former Alameda Research executive Caroline Ellison and FTX co-founder Gary Wang have already pled guilty to fraud charges and agreed to work with authorities. Both have been released on $250,000 bonds with travel restrictions.
As the FTX case develops, it is expectedly going to have a big impact on the price movements of FTT tokens. Given this, investors should exercise caution when investing and trading the cryptocurrency.
Featured image from Bitcoinist, chart from TradingView.com