Bitcoin crashes below $16,000 for the first time in two years

The collapse of the crypto exchange FTX has acted as a massive blow to the entire crypto space. The broader cryptocurrency market is again under selling pressure as Bitcoin tanks over 5% below $16,000 for the first time in two years.

As a result, BTC has hit a new 2022 low and is currently trading at $15,970 with a market cap of $306 billion. Over the past week, the broader cryptocurrency market has lost more than $200 billion. On-chain data from Coinglass shows that market liquidity has dried up quite quickly recently, which may be a matter of concern going forward.

Market liquidity is drying up, we need to be aware. pic.twitter.com/Kv0htp7Tc5

— Coinglass (@coinglass_com) 14 November 2022

Amidst the recent collapse of the crypto exchange FTX, users’ trust in centralized platforms has plummeted. The total BTC balance on exchanges has fallen to its lowest since 2018 to below 2.3 million. Citing data from Glassnode, on-chain college reports:

80.8k BTC has left exchanges in the last 4 days. Apparently people take their BTCs from exchanges to minimize counterparty risk. Short-term exchange data may fluctuate. I imagine this trend will continue as more people take care of the asset and avoid relying on a third party.

Solana suffers the most with FTX collapse

FTX’s sister group Alameda Research has been selling its Solana (SOL) holdings in huge 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 down another 13% 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, fell more than 23% on Sunday alone. Developers associated with Serum split the project’s code in a so-called fork amid concerns that an upgrade key that controls program could be compromised, a Solana spokesperson said.

As of press time, altcoins are facing deeper correction. Dogecoin (DOGE) is down 10% and Polygon (MATIC) is down almost 13%. Ethereum (ETH) is down 7% and is back below $1,200.

Bhushan is a FinTech enthusiast and has a keen flair for understanding the financial markets. His interest in economics and finance draws his attention to the emerging markets of blockchain technology and cryptocurrency. He is continuously in a learning process and stays motivated by sharing his acquired knowledge. In his spare time, he reads thriller novels and sometimes explores his culinary skills.

The content presented may include the author’s personal opinion and is subject to market conditions. Do market research before investing in cryptocurrencies. The author or publication has no responsibility for your personal financial loss.