Crypto Market Contagion Fears Reemerge as Genesis Trading Prepares for Bankruptcy

• DXY fell intra-day to a new 7-month low of 101.56 yesterday
• Bitcoin managed to tackle the key resistance zone above the $21,500 mark
• Genesis Trading could be preparing for bankruptcy

Yesterday, the US Dollar Index (DXY) experienced a sharp fall to a new seven-month low, reaching 101.56. This sent Bitcoin into a frenzy, with the leading cryptocurrency briefly managing to break through the key resistance zone at $21,500. Unfortunately, the excitement was short-lived, as the DXY quickly bounced back and news emerged that Genesis Trading, a subsidiary of the DCG empire owned by crypto mogul Barry Silbert, could be preparing to file for bankruptcy.

If the reports turn out to be true, the bankruptcy filing could come as early as this week. Genesis is currently in confidential negotiations with various creditor groups and is working on a restructuring plan. However, the details of the plan have yet to be finalized as the parties involved are still struggling to reach an agreement. According to sources close to DCG, various proposals have been exchanged between Genesis and its creditors, but the situation is still fluid and the plans could still change.

The news of a potential bankruptcy filing has reignited fears that the contagion in the crypto market after the FTX bankruptcy in November could continue. As such, it remains to be seen how this will affect the Bitcoin price. The DXY’s strong bounce could serve as a buffer against any potential losses in the short term, but further drops in the DXY could lead to further losses for the leading cryptocurrency.