Bitcoin Exchange Outflow Volume Plunges to 7-Month Lows

Glassnode data shows a decrease in the 7-Day MA of bitcoin leaving centralized exchanges with only 986.237 BTC getting withdrawn in the past week or so.

The declining outflow could signal that investors have restored some faith in CEXs after the gigantic collapse of FTX. Billions of dollars worth of various digital assets were withdrawn from such exchanges amid FTX’s crash.

Decline in Crypto Withdrawals

Apart from crashing the entire cryptocurrency market and causing colossal investment losses, the demise of FTX damaged the stature of centralized exchanges in general. Many investors withdrew billions of dollars worth of digital assets from such platforms in the wake of the crash, hoping to avoid another similar event.

As CryptoPotato reported, around $8 billion worth of crypto left CEXs in a matter of a week last month. Bitcoin withdrawals accounted for about $3.7 billion, while ether transactions were $2.5 billion. 

Things escalated earlier this month when reports emerged claiming that the US Department of Justice might prosecute Binance for allegedly facilitating money laundering procedures. Despite being described by CEO Changpeng Zhao as FUD, the speculation triggered another massive wave of withdrawal requests.

The world’s largest cryptocurrency platform had to process outflow transactions worth $8 billion on December 13. Zhao said his company coped with the customers’ demand, reassuring that it is financially stable and a safe place for investors.

According to recent data by Glassnode, the panic among investors seems to be alleviating, with the 7d moving average for bitcoin exchange outflow volumes shrinking to 986.237 BTC. The last time the figures were so low was in May this year.

📉 #Bitcoin $BTC Exchange Outflow Volume (7d MA) just reached a 7-month low of 986.237 BTC

Previous 7-month low of 988.202 BTC was observed on 13 October 2022

View metric:https://t.co/TGwBkwI3wg pic.twitter.com/v1MDdXIBfi

— glassnode alerts (@glassnodealerts) December 26, 2022

Not Only Bitcoin

Glaasnode’s data further revealed investors have significantly reduced their withdrawal requests for other crypto assets as well. Ethereum exchange outflow volumes tapped a one-month low of 8,096.373 ETH, compared to the approximately 45,000 ETH departing from platforms in the middle of November.

📉 #Ethereum $ETH Exchange Outflow Volume (7d MA) just reached a 1-month low of 8,096.373 ETH

Previous 1-month low of 8,119.230 ETH was observed on 25 December 2022

View metric:https://t.co/LzFffVHu6i pic.twitter.com/49h7uVL4jn

— glassnode alerts (@glassnodealerts) December 26, 2022

Stablecoin withdrawals have also been on the decline, with the number of USDC exchange withdrawals hitting a 22-month low of 166.238.

Although these withdrawal declines could sound promising at first glance, it’s worth noting that they happened during the Christmas holidays when investors are typically less active, evident from the low trading volumes and lack of volatility.