$1.8 Billion Worth of Crypto Leaves Market as Bitcoin Breaks Through Resistance

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Arman Shirinyan

Cryp­tocur­ren­cy mar­ket faces mas­sive out­flows as traders lose trust in exchanges

Con­tents

The large out­flows hit the cryp­tocur­ren­cy mar­ket as $1.8 bil­lion worth of Ethereum, Bit­coin and Teth­er left the mar­ket. We could tie such a strong out­flow to the extreme fear on the mar­ket.

Net flow by position

Ethereum has faced the largest out­flows on the mar­ket, with $748 mil­lion in the cryp­tocur­ren­cy moved from cen­tral­ized exchanges. As Glassnode data sug­gests, the net flow for Ether remains at ‑164 million.

Bit­coin’s net flow also remains neg­a­tive, with $700 mil­lion worth of cryp­tocur­ren­cy leav­ing the mar­ket as traders move their funds away from exchanges. Pre­vi­ous­ly, U.Today not­ed that mas­sive out­flows dur­ing the cor­rec­tion peri­od may cause a sup­ply shock in the future, when the demand for cryp­tocur­ren­cy recov­ers to 2021 levels.

The only cryp­tocur­ren­cy that faced a pos­i­tive net flow was Ether-based Teth­er sta­ble­coin with $353 mil­lion poured into the mar­ket, which may reveal two things: traders will pur­chase more cryp­tocur­ren­cies with their Teth­er hold­ings, or the Trea­sury releas­es more coins into cir­cu­la­tion to bal­ance the price of the asset.

Why do traders choose to move funds away from exchanges?

While eco­nom­ic and mar­ket caus­es could affect traders’ desire to move funds away from cen­tral­ized enti­ties, the lim­i­ta­tions that exchanges faced recent­ly from reg­u­la­tors caused a pan­ic among cryp­tocur­ren­cy investors who kept their hold­ings on exchanges.

Many CEOs warned users about their inabil­i­ty to avoid orders from finan­cial reg­u­la­tors and that they will have to ban or lim­it traders. State­ments incen­tivized out­flows from all major exchanges as traders start­ed active­ly mov­ing funds to cold or hot non­cus­to­di­al wal­lets with one-sided access.



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