Bitcoin (BTC) is jumping even as a trader stays on his guard after the FTX crash

The cryptocurrency market has taken a hit this year, wiping over $2 trillion from its value since its peak in November 2021. Cryptocurrencies have been under pressure after the collapse of major exchange FTX.

Jonathan Ra | Norphoto | Getty Images

bitcoin It jumped higher on Wednesday, rebounding from the previous day’s low in two years, even as traders remained wary about possible contagion from the collapse of cryptocurrency exchange FTX.

The world’s largest digital currency rose more than 5% to trade at $16,497.19 around 3:34 a.m. ET.

“We are bouncing off the support level, which is quite expected, given that we have been oversold for the past week or two,” Vijay Aiyar, vice president of corporate development and international at cryptocurrency exchange Luno, told CNBC.

“However, this move does not indicate any upside yet… We may see a bearish bounce here, given the $17k resistance, before more downside targeting $14k,” he added.

Markets have been on edge after the fall of FTX, once a $32 billion empire that was one of the largest cryptocurrency exchanges in the world.

Hackers start laundering cryptocurrency stolen from the crashing FTX exchange

Investors are worried about possible contagion from the FTX fallout and are looking for signs of other companies or entities that may have been exposed to the exchange, which was founded by Sam Bankman-Fried.

“Overall, the markets were nervous after FTX, and more contagion is expected from FTX-related parties,” Ayat said.

FTX can have more than 1 million creditors. The company owes $3.1 billion to its 50 largest unsecured creditors alone. However, various FTX entities around the world had cash balances of only about $1.24 billion as of November 20, according to a court filing published this week.

Bankman-Fried, who stepped down as CEO of FTX earlier this month, has been trying to broker a deal from his home in the Bahamas to save the exchange, a move that seems highly unlikely.

Meanwhile, Justin Sun, a prominent cryptocurrency entrepreneur, said on Tuesday that he and his associates are considering buying some assets from FTX.

Cryptocurrency ether It also rebounded on Wednesday, trading up more than 7% at $1,161.89 at 3:42 AM ET.

Ether in particular came under pressure after hackers stole around $477 million in cryptocurrency from FTX.

The hackers then transferred a huge amount – about $280 million – into ether before dumping the holdings into another cryptocurrency as they began laundering the money. This sale is putting pressure on the ether.

It has been a difficult year for cryptocurrency as the industry has been plagued by crashes, liquidity issues and bankruptcies. More than $1.3 trillion in cryptocurrency market value has been completely wiped out this year.

What you should know before investing in cryptocurrency