Mon, 21 Mar 2022 18:00:37 +0000
Bitcoin’s stint above $40,000 continues as the market ushers in another week of trading. The weekend had been a rollercoaster for investors but prices have since started to level out. With the break above $40,000 last week, faith has gradually returned to the market, causing more people to invest in the digital asset. Amid this has emerged an accumulation pattern that suggests a bullish outlook for the long-term.
Over the past week, bitcoin exchange outflows have been on the rise. This is marked by the recovery of the digital asset’s value above the $40,000 level. This coveted level can be elusive for the cryptocurrency. However, with so many breaks above it in the first three months of the year, it has been able to garner enough support to enter an accumulation trend.
Data from Glassnode shows that the previous week has seen more exchange outflows than inflows. Recording the daily numbers via reports shows that on a daily, bitcoin investors are choosing to move their coins out of these (centralized) exchanges to other wallets. An example of this was Saturday which saw $1.6 billion in BTC leaving exchanges in a single day.
On the weekly scale, the outflows have continued to surpass inflows, although not by a large margin. In a recent report, the on-chain data aggregator showed that $6.3 billion in BTC left exchanges compared to the $6 billion that were moved in.
🚨 Weekly On-Chain Exchange Flow 🚨#Bitcoin $BTC
➡️ $6.0B in
⬅️ $6.3B out
📉 Net flow: -$298.2M#Ethereum $ETH
➡️ $5.2B in
⬅️ $6.7B out
📉 Net flow: -$1.5B#Tether (ERC20) $USDT
➡️ $4.1B in
⬅️ $4.2B out
📉 Net flow: -$99.0Mhttps://t.co/dk2HbGwhVw
— glassnode alerts (@glassnodealerts) March 21, 2022
This trend of outflows surpassing inflows usually points towards one thing and that is the fact that investors are accumulating. Market trends can have a big impact on this, especially if the price is low. However, with bitcoin touching as high as $69K last year and now only trading at $41,000, a lot of investors might see this as a good time to fill up their bags while they wait for the price to recover towards another all-time high.
BTC recovers above $41K | Source: BTCUSD on TradingView.com
Another reason for exchange outflows being so high is for safekeeping. A saying in the crypto space that is used a lot is “Not your keys, not your coins.” This simply means that for an investor’s coins to be truly safe, they have to keep it in a wallet whose private keys they control and that is not the case on exchanges.
Related Reading | TA: Bitcoin Corrects Lower, Why BTC Remains In Uptrend
Instead, investors prefer to remove their coins from these exchanges and send them to wallets that they control. This is especially important for investors who are holding their coins for the long term. This way, they are safe if anything, say a hack, happens to an exchange. It also keeps investors’ wealth from being controlled by any governmental entities.
Featured image from NewsBTC, chart from TradingView.com