Market-Wide Liquidity on the Decrease, While More ICOs Withdraw Their Ethereum

Despite Bitcoin and altcoin prices dropping to their lowest levels in a year or more, overall market liquidity is still on the decrease.

Essentially, despite the current availability of bargain-basement prices, more traders are leaving the crypto space the further we get into 2018’s bear market. That’s according to data released by information and analysis service, Diar.

Volumes on Decrease

That volumes may have reduced from January through to November should be no surprise to anyone. What is surprising is that new hands have not appeared to take advantage of low prices in the last couple of months. According to the data:

“Despite cryptocurrency prices having plunged 80-95% from the start of the year, traders aren’t taking a punt on the bargain. Token volumes have plummeted across major exchanges with 60% of listed cryptocurrencies trading below January levels. Order books are now filled to the brim on the sell side with November, to date, seeing an acceleration in depreciating volumes.”

The analysis looked at data from Binance, OKEx, Huobi, Bitfinex, Kraken, Poloniex, Bittrex, and HitBTC. It continues:

“…20% of cryptocurrencies that remain listed on major exchanges now have less than 90% of the trading volumes they witnessed at peak hype in January. More than half of those are effectively dead in the water with no traders looking to buy.”

ICO’s Withdraw More ETH

Also detailed is the increased rate of ETH withdrawal from ICO treasuries the closer we get to the end of the year. More ETH was withdrawn in November than October, while the last seven days alone saw a rapid increase to the withdrawal rate:

“Initial Coin Offering treasuries have seen total withdrawals of 170,000 ETH this month. Last week alone saw treasuries take out over 100,000 ETH…”

Despite the large withdrawals, Diar’s data suggests that the total amount of ETH withdrawn by developers since the start of the year is still only around 22% overall.

What About Those Hard Caps?

Perhaps someone in the comments section can answer this: what happens to all those ICOs that said they needed ‘X’ amount of ETH in order to build their blockchain project?

With Ethereum losing over 90% since the start of the year, how can those project hard caps really be of any use now? How will those projects build and develop their blockchains with 90% less money than they themselves told us they needed a few months ago?

Of course, maybe the blockchains will arrive and instead it will be revealed that many of those ICOs didn’t really need hundreds of millions, or billions, in the first place.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Greg Thomson is a freelance writer who contributes to leading cryptocurrency and blockchain publications like CCN, Hacked, and others.