The collapse of the crypto exchange FTX has served as a massive blow to the entire crypto space. The broader cryptocurrency market has once again selling pressure as Bitcoin tanks over 5% slipping under $16,000 for the first time in two years.
As a result, the BTC has touched a new 2022-low and is currently trading at $15,970 with a market cap of $306 billion. Over the last week, the broader cryptocurrency market has lost more than $200 billion. On-chain data from Coinglass shows that the market liquidity has been drying up pretty fast recently which could be a matter of concern going ahead.
Amid the recent collapse of the crypto exchange FTX, users’ trust in centralized platforms has fallen greatly. The total BTC balance on exchanges has dropped to the lowest since 2018 to under 2.3 million. Citing data from Glassnode, on-chain college reports:
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.
FTX’s sister concern Alameda Research has been selling its Solana (SOL) holdings in massive quantities ever since the crisis unfolded. As a result, the Ethereum competitor has corrected the most among all altcoins crashing more than 60% in a single week.
As of press time, SOL is trading another 13% down and is trading at $12.59 with a market cap of $4.5 billion. A Bloomberg report notes:
“Tokens issued by Serum, a liquidity infrastructure hub built by FTX and used by market makers and lending protocols on Solana, tumbled more than 23% on Sunday alone. Developers attached to Serum split off the project’s code in a so-called fork amid concern that an upgrade key controlling the program could be compromised,” said a Solana spokesperson.
As of press time, altcoins are facing deeper correction. Dogecoin (DOGE) has tanked by 10% and Polygon (MATIC) has tanked by nearly 13%. Ethereum (ETH) is down 7% moving once again back under $1,200.