FTX token FTT has skyrocketed by 27% within a day to trade at $2.07 according to Coinmarketcap. This sharp rise was ignited by fake news of FTX paying $16 billion to its creditors.
Although the price increase attracted attention, the token remains tied to FTX’s ongoing bankruptcy, posing significant risks to investors.
FTX token FTT Price and Market Activity Soar
According to the reports, the size of the FTX token (FTT) market capitalization rose by 27%, reaching $681 million. There was a 1221% increase in trading volume due to traders’ speculation occasioned by the rumors. From below $1.40, the token soared to reach its peak of $2.71 before hovering around $2.07.
Technical Indicators Show Mixed Signals
In terms of its technical note, RSI has stood at 49.41, which neither means it is overbought nor oversold, but in consolidation. This neutral RSI reading is an indication that there is a slowdown after the sharp rise in the price.
The MACD indicator turned upward and gave a mildly bullish signal since the blue line is slightly higher than the orange signal line. This histogram is in the green zone, though, not very strong; thus, it means there is a mild bullish exposure.
All in all, the indicators suggest either the formation of a base or the trend reversal to the sideways, or slow upward movement on the short-term scale in the nearest future.
Bankruptcy Warnings Cloud FTT’s Future
As for the circulating supply of tokens, FTT has 328,895,104 tokens circulating with no further token generation anticipated. The current issue surrounding the FTX bankruptcy has been a potential threat to the growth of the token. The platform has warned that FTX token FTT has no intrinsic utility and could be liquidated to repay creditors.
Thus the price has gone up but the risk shown by the bankruptcy proceedings is also higher. The token could be sold to reduce the existing debt, likely causing significant deterioration of the token’s price.
Even though this token was designed to create long-term value through innovation, investors should bear these risks in mind. The token’s success will directly depend on the result of the FTX legal case.
Rumors Drive Speculative Trading
The price surge was largely fueled by rumors on social media, claiming a $16 billion payout to FTX creditors. These claims gained significant traction but were quickly debunked. Despite corrections, traders continued to push FTT’s price upward, capitalizing on speculative momentum.
FTX clarified that no payouts are scheduled until after a court hearing on October 7. Nevertheless, any distributions are likely to take place over time, and some creditors may not be poised to receive their money until 2025.
Future of FTT Remains Uncertain
FTX’s bankruptcy case remains unresolved, and FTT’s future is highly uncertain. The next hearing is scheduled for October 7, when it will address the overall reorganization of the company. However, the payouts are expected to be smaller than expected.
Debt holders are anticipated to be repaid only 10–25% of their lost cryptocurrencies using November 2022 prices.
Although FTT is short-term profitable its long-term value is uncertain. There could be further fluctuations and share price volatility due to legal unrecoverable in FTX and its liquidation procedure.
