$5 Billion Bitcoin Exchange Outflows Suggest Investors Are Looking to HODL

On-chain transaction data appears to show that over the last 30 days cryptocurrency investors have withdrawn over 111,000 BTC from exchanges, presumably in a bid to hold onto their funds for the long run.

According to on-chain analyst Will Clemente, 111,033 BTC worth nearly $5 billion have left exchanges in said period, making it “one of the sharpest drops of exchange inventories in Bitcoin’s history.”

Exchanges down 111,033 BTC in the last 30 days. One of the sharpest drops of exchange inventories in Bitcoin’s history. pic.twitter.com/SjHVzOV7z2— Will Clemente (@WClementeIII) August 18, 2021

Clement’s words were backed by data from on-chain analytics firm Glassnode, which also recently tweeted about Bitcoin exchange outflows. Per the firm, bitcoin exchange flows “returned to a dominance of outflows through August” as investors kept on withdrawing BTC.

Bitcoin flowing out of centralized trading platforms is often seen as a bullish sign, as usually investors withdraw their funds in a bid to secure them in cold wallets or through other custody solutions. The funds may also be tokenized and used in decentralized finance (DeFi) services.

On the other hand, when large exchange inflows are seen, investors prepare for a market downturn as it could signify large sell-offs are about to occur.

#Bitcoin exchange flows have returned to a dominance of outflows through August as investors withdraw $BTC.

The market has transitioned through a number of phases of exchange flow dominance over the last year, with outflow dominance last seen in late 2020. pic.twitter.com/BQLlw06SJr— glassnode (@glassnode) August 19, 2021

Bitcoin exchange outflows may have recently started growing because of a recent price dip. The cryptocurrency fell from around $48,000 to a $44,000 low before it seemingly started recovering, according to CryptoCompare data.

The price coincided with a move of more than $222 million worth of stablecoins into centralized cryptocurrency trading platforms according to on-chain analytics firm Cryptouant. The large inflows, CryptoQuant noted, often grow and are behavior typical of “whales and/or institutional entities to wait in the shadows to capitalize on local dips.”

Bitcoin whales have seemingly been accumulating billions in BTC I since the flagship cryptocurrency dropped from its near $64,000 all-time high to a $30,000 low before recovering. In this context, whales are defined as clusters of addresses belonging to one entity with between 1,000 and 10,000 BTC.

These movements appear to suggest whales see bitcoin as a buying option when the cryptocurrency’s price remains below the $45,000 mark. Reports from institutional investment managers suggest demand is still there from their side as well.

As reported, four firms recently revealed they increased their exposure to the flagship cryptocurrency bitcoin by buying up a total of 250,204 shares in the Grayscale Bitcoin Trust (GBTC).


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