Cryptocurrency outflows on exchanges have seen huge increases.
As the leading cryptocurrency Bitcoin dropped by almost 50% from its all-time high, the data was interpreted as a signal that the market is approaching the bottom. Cryptocurrency outflows on exchanges have seen huge increases.
What Do Bitcoin Outflows Mean?
While it is still early to say whether the crypto outflows will continue, data has revealed that some investors are satisfied with the current price and do not intend to liquidate their BTC positions on exchanges. In cryptocurrency markets, investors move their capital into wallets, custodians and cold wallets when they expect a price increase.
Glassnode recorded 22,550 BTC outflows on cryptocurrency exchanges on Monday. The blockchain analytics firm tracks the flow of money from many cryptocurrency exchanges, including Coinbase and Kraken.
Petr Kozyakov, co-founder and CEO of global payments network Mercuryo, told Coindesk: “Money outflows can best be described as HODL.”The number of Bitcoins held on cryptocurrency exchanges decreased from 2.56 million to 2.54 million in three weeks. Investors often move cryptocurrencies from exchanges to their wallets in anticipation of a price increase.
“Investors are keeping their assets in hardware wallets in anticipation of the price going to an all-time high or even higher after the current drop,” Kozyakov said.
Quantum Economist Analyst Warns
However, Quantum Economist analyst Jason Deane called for a cautious approach. Deane said: “The course of the market is not clear yet. Sentiment is mixed and many metrics disapprove of bullish momentum. Therefore, considering the traditional bullish signal, it should be interpreted in the context of other indicators.”
Leading cryptocurrency Bitcoin is trading around $33,000, down 1% on the day. The BTC price had plummeted due to Musk’s environmental concerns and China’s repressive attitude.
A sustained increase in BTCs held by whale institutions may be required to reallocate confidence in the battered market. The balances held by these major investors rose aggressively during the bull run.