bitcoin’s price performance may be unfavorable for bullish proponents, but it remains a focal point for serious on-chain money movements. bitcoin fell below an important support level of $54,000 again in the past 24 hours, giving many short-term investors a big reason to worry.
However, despite this short-term volatility, a fascinating trend is developing beneath the surface. Interestingly, on-chain data reveals a large accumulation trend among long-term investors, with over $728 million worth of btc being withdrawn from exchanges last week.
Massive btc withdrawals from cryptocurrency exchanges
On-chain data suggests that long-term investors are taking advantage of this drop by accumulating more bitcoin. This interesting trend was noticed by IntoTheBlock, an analytics platform known for its in-depth tracking of on-chain data related to bitcoin and other cryptocurrencies. According to IntoTheBlock, a cumulative total of $728 million worth of btc was withdrawn from cryptocurrency exchanges throughout the past week.
In addition to this significant withdrawal figure, IntoTheBlock data points to a negative net flow of 220.6 million on exchanges aggregated over the past seven days. This means that the volume of bitcoin leaving exchanges has far exceeded the volume entering, suggesting that more investors are withdrawing their assets from exchanges than depositing them. In particular, IntoTheBlock attributes the withdrawal trend to addresses holding between 100 and 1,000 btc.
What does this mean for bitcoin?
Exchange withdrawals are generally good for crypto assets, as they reduce the amount of cryptocurrencies available for sale. The more bitcoin leaves exchanges, the scarcer the supply becomes, which could push up the price.
However, while this trend of accumulation by a few major holders indicates strategic operations, it does not necessarily reflect the overall market sentiment around bitcoin at the time of writing. Despite notable pullbacks, bitcoin has struggled to meet investor expectations, and its price has fallen below key psychological levels. In fact, bitcoin closed August with disappointing negative price performance and fell 8.6% for the entire month.
Moreover, this accumulation trend by large holders is countered by other worrying developments in the market, notably outflows from US-based spot bitcoin ETFs. This is because these ETFs ended the week with outflows worth $169.97 million on Friday, bringing the streak of outflows to eight consecutive days.
This decline in inflows into bitcoin spot ETFs suggests a growing bearish sentiment among institutional investors, who appear to be withdrawing funds from these products. This, in turn, further complicates bitcoin’s near-term price outlook.
At the time of writing, bitcoin is trading at $54,614 and is still at risk of further decline.
Featured image from PCMag, chart from TradingView