The demise of the cryptocurrency exchange FTX dealt a devastating blow to the whole crypto industry. As Bitcoin falls more than 5% and dips below $16,000 for the first time in two years, selling pressure on the larger cryptocurrency market has returned.
The BTC is now selling at $15,970 and has a market worth of $306 billion, touching a new low for 2022. The overall cryptocurrency market has lost more than $200 billion during the past week. Market liquidity has been drying up quickly recently, according to on-chain statistics from Coinglass, which could be cause for concern moving forward.
Market liquidity is drying ,we need to pay attention. pic.twitter.com/Kv0htp7Tc5
— Coinglass (@coinglass_com) November 14, 2022
Users’ faith in centralized platforms has significantly decreased with the recent collapse of the cryptocurrency exchange FTX. The entire BTC balance on exchanges has decreased to less than 2.3 million, which is the lowest level since 2018. On-chain College reports using data from Glassnode as follows:
80.8k BTC have left exchanges over the last 4 days. People are clearly taking their BTC off exchanges to minimize counter party risk.
Short-term exchange data can fluctuate. I imagine this trend will continue as more ppl take custody of the asset and avoid trusting a 3rd party
— On-Chain College (@OnChainCollege) November 13, 2022
Since the crisis started, FTX’s sister company Alameda Research has been selling a significant portion of its Solana (SOL) holdings. Because of this, the Ethereum rival has experienced the biggest correction among all altcoins, falling more than 60% in a single week.
