The Next FTX? Huobi Token Price Sinks as Outflows Rise

Huobi Global, the giant cryptocurrency exchange, came under intense pressure as investors worried about its future. The company saw significant outflows after the company announced a new round of layoffs and hinted that existing staff will be paid using stablecoins. Huobi Token, its ecosystem crashed to the lowest point since November.

Huobi Global layoffs

Huobi Global is a leading crypto exchange that served millions of customers during its peak. At the time, it was the biggest exchange in China. The company came under intense pressure when China banned cryptocurrencies and companies in the industry. 

After ten years in the industry, Huobi Global’s founder decided to sell the company for about $1 billion. He sold it to a group of investors who are linked to Justin Sun, the founder of Tron. The company then named Huobi as its global advisor. 

Huobi has been a controversial company for a long time. The company has never released its audited finances and its internal happenings are not well known. Like FTX, it has its own ecosystem token known as Huobi Token, which is thinly traded and has no major role. 

Huobi Token declined sharply after the company confirmed that it was indeed laying off workers. It attributed the layoffs to the ongoing weakness of the crypto sector. According to numerous reports, the company will start paying its staff with stablecoins.

This is notable since Justin Sun is one of the biggest stablecoin dealers in the world. He created USDD, an algorithmic stablecoin that briefly lost its peg. Tron, his network, also deals with billions of stablecoins every day. 

Data compiled by DeFi Llama shows that Huobi’s exchange saw outflows worth over $74 million in the past 24 hours. The company has shed over $141 million in the past 7 days. This is notable since the company holds about $2.18 billion in assets. Most of these assets are associated with Justin Sun.

Huobi Token price prediction

The four-hour chart shows that Huobi Token crashed hard on Friday. It moved below all moving averages and the Ichimoku cloud. The token also moved to the lower side of the Bollinger Bands while the MACD moved below the neutral point. Therefore, the token will likely have a bearish breakout as sellers target the next key support level at $4.