Cold feet are responsible as exchange users continue to move Bitcoin from exchanges to non-custodial wallets.

Bitcoin
BTC

to mark
$16,724

it has flooded out of exchanges in the past week as users grow wary of security and regulatory scrutiny.

Data from on-chain monitoring resource Coinglass shows that US exchanges are experiencing particularly sharp declines in BTC balances.

US exchanges are leading the BTC exodus
In the wake of the FTX scandal, efforts to draw attention to the risk of escrowing BTC intensified on social media.

Users seemed to heed the warning, withdrawing more than $3 billion in cryptocurrency in the week immediately following the solvency debacle and ordering record amounts of hardware wallets.

Meanwhile, the fallout from FTX is just beginning, and as regulators plan investigations and more attention to cryptocurrencies as a whole, investor fear continues.

The data shows that the trend is still in effect when it comes to exchanges. In the past seven days, virtually every major platform has seen net withdrawals exceed deposits.

The biggest weekly drop comes from Gemini, down almost 30,000 BTC, closely followed by Kraken, Binance and Coinbase.

Not surprisingly, US exchanges saw particularly strong pullbacks; the jurisdiction is set to play a key role in the FTX saga going forward.

This week, lawmakers announced a hearing dedicated to what happened in the exchange, with its former chief executive, Sam Bankman-Fried, apparently about to be extradited to the United States from the Bahamas.

“The fall of FTX caused enormous damage to over a million users, many of whom were ordinary people who invested their hard-earned savings in the FTX cryptocurrency exchange, only to have it all disappear in a matter of seconds,” said the Maxine Waters, the chairman of the Committee on Financial Services of the US House of Representatives, who is organizing the hearing, quoted by the mainstream media.

Meanwhile, figures from Coinglass show that even exchanges without FTX exposure have failed to stem the exodus.

In total for the week, 134,000 BTC came off their books, the equivalent of about $2.2 billion at current prices, with about $1.5 billion coming from US platforms.

The graph of the history of Bitcoin Cash. Source: Coinglass
“Acute financial difficulties”
As Cointelegraph reported, while holdings of trade have increased, the average BTC hodler remains significantly underwater and therefore less inclined to sell.

Related: Bitcoin Price Falls to $16.4K on Genesis Troubles as Execs Defend GBTC

Data from the on-chain analysis company Glassnode confirms this. The average long-term holder (LTH), an entity that holds coins for at least 155 days, is 33% in the red.

This is almost unprecedented and is only compared to the pit of the 2018 bear market, when the average figure reached 36%.

The accompanying comments described the LTHs as “acute financial distress”.

Bitcoin LTH unrealized loss annotated graph. Source: Glassnode/Twitter
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Source: CoinTelegraph

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