It has been almost an entire week since the FTX fiasco took place. Unfortunately, the impact of the FTX crash is still being felt throughout the cryptocurrency.
There does not seem to be any end to the constant market downtrend that the FTX crash has triggered. The recent crash has prompted investors to move their crypto funds out of the online solution providers.
This means that the investors want to move their crypto funds to platforms/wallets that provide the users full control over the assets.
Their main goal is to stop third parties from freezing their funds in light of the crypto downtrend. Therefore, the investors are actively withdrawing their crypto funds from the exchanges.
It is surprising that the same situation has been witnessed for all minor and medium-level crypto trading platforms. It indicates that the investors have lost their trust in crypto exchanges for now.
Trading Volumes and Withdrawals Reach the Highest Levels
Due to the FTX crash, investors have lost a great amount of trust in most of the crypto trading and exchange platforms.
The latest metrics have shown that since the past week, the trading volumes and withdrawals on the crypto trading/exchange platforms have reached the highest levels in months.
In recent days, the level of withdrawals has been rising, which is an alarming situation for all major cryptocurrencies.
Trading Volume Reduction and Increase in Withdrawals
The data shows that the trading volumes for the cryptocurrencies started to rise from November 7 and kept rising until November 12.
Finally, the unusual trading volumes lost their momentum and came back to the levels recorded prior to November 7.
As for the Bitcoin withdrawals, the cryptoquant.com report showed that on November 7, the total number of BTC held on exchanges was 2,312,458 BTC.
As of November 13, the same number had reduced on the exchanges to 2,098,600 BTC. It shows that in that particular period, a total of 213,858 BTC left the exchanges.
The mentioned number of BTC that left the exchanges in the particular period translates to $3.4 billion.
Like Bitcoin, Ether has recorded massive withdrawals from multiple crypto exchanges. On November 7, the recorded number of ETH on the exchanges was 21,640,394, and on November 13, it was 20,077,244.
Possibilities of Bullish and Bearish Trends
Under normal circumstances, if BTC were to leave the exchanges, it would mean that the investors are accumulating them. This would increase the positive sentiments, which would favor the bullish run.
However, keeping the current situation in mind, it suggests that the sentiments of the investors are negative. This is because they have lost trust in the capabilities of exchanges to protect their funds.
Therefore, it is difficult to say exactly what the investors have in mind for now. The market is also fearing that the investors withdrawing their funds may start selling BTC or ETH on a large scale.
This could also trigger a massive bearish trend that may continue for a long time.