Bitcoin (BTC) investors are withdrawing funds from exchanges at a rate not seen since April 2021with nearly $3 billion worth of bitcoin withdrawn in the past seven days.
New data from on-chain analytics firm Glassnode shows that the number of wallets receiving BTC from exchange addresses reached almost 90,000 on November 9.
Exchange users wake up to self-custody
Amid the ongoing turmoil over the bankruptcy of major exchange FTX, Concerns of exchange users about the security of funds have increased.
The commentators have increased advice to avoid custodial wallets and take control of crypto assets, and the Regulators are increasing scrutiny of the cryptocurrency industry en masse.
The on-chain figures suggest that a large number of users have opted for non-custodial wallets over the last week.
The number of addresses making withdrawals experienced a huge spike on November 9thus surpassing the daily highs of May and June of this year, when BTC price action last saw significant downward pressure.
For November 12the last date for which data is available, addresses making withdrawals still numbered more than 70,000.
The same data from Glassnode gives an hourly average of more than 3,000 addresses withdrawing during the seven days to November 13.
Analysis: BTC reserves may not tell the whole story
The figures coincide with what appears to be a rapid decline in BTC reserves on major trading platforms.
While the speed of the decline suggests that the true balance count may be difficult to confirm at present, data from on-chain analytics resource CryptoQuant puts overall exchange reserves at lowest point since February 2018.
CryptoQuant tracks a total of 38 exchanges, including those with reported financial problems like FTX and Kucoin.
Another graph, this time from Coinglass, suggested 177,000 BTC in weekly withdrawals until November 13a US dollar value of about 3,000 million at current price.
Glassnode senior analyst Checkmate noted three exchanges showing what he called “particularly strange” bitcoin balance readings: Huobi, Gate.io and Crypto.com.
concluding a dedicated thread to the subject, he pointed out that “exchange balances are best estimate based on wallet clustering. They are more likely to be a lower bound than an overestimate.”
“These exchange-to-exchange fund flows include both actual customers and FTX/Alameda. They’re hard to separate, so they’re seen as relative to balance,” he added.
Regarding the forecast of how the current scenario may develop, Michael van de Poppefounder and CEO of the trading company Eight, said the worst is probably not over yet.
“We will probably have more problems with some exchanges in the next few weeks, but probably also a lot of gossip,” said to his Twitter followers over the weekend.
“Stay safe, calm and don’t make emotional decisions. We are in terrible territory but crypto will come out of this stronger.”
BTC/USD was trading close to $16,500 at the time of writing.according to data from Cointelegraph Markets Pro and TradingView.
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