The difficult situation in the cryptocurrency market has led to a drop in trust among centralised exchange (CEX) users. Some fear a repeat of what happened with FTX. Others believe in the power of Bitcoin and prefer to wait out this 'time of troubles' outside the market. Altogether, these factors are the reasons behind the record outflow of coins, which has reached 178,000 BTC per month.

As a result of the massive exodus of traders, nearly every coin that hit crypto exchanges in the past 12 months has returned to cold wallets. The supply currently available on CEXs is only 12% of the total supply, which corresponds to the numbers seen in December 2017.

Binance continues to see a high volume of trading. Judging by the activity, users didn't attach any importance to Changpeng Zhao's latest move (learn more here). However, outside of this crypto exchange, weekly activity has dropped to levels last seen in February 2021.

Following the shrimps (<1 BTC), who added 96,200 BTC to their reserves in November, crabs (1-10 BTC) showed record accumulation, buying 192,000 BTC worth $3.1 billion in just one month. The outflow is coming primarily from the DeFi sector, which has lost 24% of its capitalisation during this time.

These trends and the depth of the market drop have historical precedents. 

If we compare the current cycle from high to low with the bear markets of 2014 and 2018, we'll see a lot of similarities. In 2014-2015, the price dropped by 85% and lasted 407 days. In 2018, it was an 84% decline that lasted 364 days. The current fall is by 77% and has lasted 376 days.

The market is approaching the stage when the bottom forms. However, there are still several shocks ahead before Bitcoin returns to long-term growth. 

StormGain Analytics Team

(a cryptocurrency trading, exchange and storage platform)