OKEX withdrawals to trigger a massive volatility spike on the cryptocurrency market

  • OKEx started testing its withdrawal functionality before reopening.
  • The market volatility may increase once users get access to their funds.

OKEx, one of the world's largest cryptocurrency exchanges, is ready to unlock a cryptocurrency withdrawal functionality on November 27. The trading platform users had to wait over a month until the company settled its legal issues and the Chinese police released one of its co-founders and a private key holder. 

Read the full story of what happened with OKEx here

While the news is welcome for many OKEx customers whose coins got stuck on the troubled trading platform, the cryptocurrency community is anxious that the market volatility will skyrocket once OKEx traders get access to their funds. 

OKEx starts testing withdrawals, volatility ahead

According to the CEO of blockchain analytical company CryptoQuant, Ki-Young Ju, someone has just moved 0.00 BTC from an OKEx wallet. The transaction may be attributed to system tests before the full reopening.

He also added that the event might result in a spike in market volatility as people will start sending withdrawal requests en masse. While he did not elaborate on the direction of the potential price movements, some crypto Twitter users believe that it may trigger the massive correction of the cryptocurrency market as traders will be eager to cash out on their assets that increased in value during the past month.

The cryptocurrency market is overbought

In the past 30 days, the total capitalization of all digital assets in circulation increased from $394 billion to $545 billion, which corresponds to nearly 30% growth. Meanwhile, an average daily trading volume more than doubled during the same period. 

Bitcoin and all major altcoins experienced double-digit growth, while Greed and Fear Index, calculated by the service Alternative.me, shows that the market reached the level of extreme greed. As FXstreet previously reported, it is a precursor of a massive downside correction. If history is any guide, even a minor trigger may set the market unwinding bullish bets.

Traders are ready to lock profits

BTC/USD, weekly and daily charts

BTC/USD weekly and daily charts

If OKEx users choose to take some profit on their released cryptocurrency holding, Bitcoin may dive below $18,000 and extend the decline with the initial focus on the former strong resistance of $16,500, followed by $14,000 (daily EMA50). Meanwhile, the TD Sequential indicator has created a sell signal on both daily and weekly charts, giving additional credence to the bearish scenario.

Meanwhile, considering the strong altcoin correlation with the pioneer digital asset, the Bitcoin sell-off will drag the whole market down. The bullish bets will start collapsing like a house of cards as traders will rush to block profits on their long positions. In this case, the downside correction may continue until the end of the year.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Cryptos feed

Latest Crypto News

Latest Crypto News & Analysis

Editors’ Picks

Four crucial on-chain metrics suggest that Ethereum price rally has just begun as bulls target $3,000 first

Attention has shifted to Ethereum, the largest altcoin in the market after breaking out to a new record high of $1,446 (on Coinbase). Speculators, traders, and analysts agree that this is just the beginning of the rally, and Ether may have jumpstarted the altcoin season.

More Cryptocurrencies News

Crypto enthusiasts' sentiment suggests Bitcoin price is far from a market top

Bitcoin price stalled after failing to break the resistance at $40,000. As reported earlier this week, JPMorgan & Chase strategists believe that BTC will retreat if it fails to hit levels above $40,000. 

More Bitcoin News

VET breaks through consolidation phase targeting a new all-time high

VeChain is breaking out toward record highs after overcoming a critical resistance barrier around $0.03. Recovery has been consistent since last week. 

More VeChain news

LTC dives to critical support looking to rebound towards $200

Litecoin has been grinding higher since the recent breakdown to $110. Recovery was very consistent, but Litecoin failed to hold above $160, let alone clear the resistance at $170.

More Litecoin News


Bitcoin Weekly Forecast: BTC price faces extreme volatility ahead of a new all-time high

Bitcoin had a wild run this week, dropping from a high of $41,350 to a low of 30,420 in less than 48 hours. 

Read the weekly forecast