FTX, the once-prominent crypto exchange and hedge fund that collapsed in 2022, is set to begin its third round of creditor repayments. The bankrupt company, through the FTX Recovery Trust and FTX Trading, announced on Wednesday that it will distribute $1.9 billion to eligible claim holders starting September 30. The final list of recipients will be based on a record date of August 15, with no further claim disputes holding up the process.
This new payout follows a $1.2 billion distribution in February and a massive $5 billion allocation announced in May, signaling steady progress in the recovery process for thousands of creditors worldwide. However, not everyone is convinced this is the full picture.
The timing of these moves is puzzling. On-chain transactions indicate that both entities continue managing large crypto positions, despite their bankrupt status and ongoing legal obligations. The FTX Recovery Trust and FTX Trading recently confirmed the upcoming third distribution round, set to begin on September 30. However, the optics of staking assets instead of liquidating them for cash repayments may erode the fragile trust left among creditors.
The total crypto market cap excluding Bitcoin (TOTAL2) has experienced a sharp pullback, dropping nearly 4.7% from its recent peak of $1.49 trillion to around $1.40 trillion. This move comes after a strong multi-week rally that saw the altcoin market cap surge from below $1.1 trillion to new yearly highs. However, the recent correction highlights growing selling pressure and short-term exhaustion among altcoins.
From a technical perspective, the chart shows a rejection from the local highs after the market encountered resistance near the 1.5T level. Despite the drop, the structure remains bullish, with price still above the 50-day, 100-day, and 200-day simple moving averages (SMAs), which are now stacked in bullish alignment. The 50-day SMA, currently at $1.14 trillion, could act as key support if downside pressure increases.
The volume profile reveals significant activity during this recent breakout, suggesting the rally was driven by strong participation. However, the red bars during the current retracement phase indicate growing profit-taking. If TOTAL2 manages to hold above $1.35T, the broader altcoin market could resume its upward momentum. But failure to do so might open room for a deeper correction toward the $1.25T support zone.
Featured image from Dall-E, chart from TradingView
