The price of bitcoin (and the market in general) started the week with one of the biggest drops they have seen in 2024. While this widespread market decline caused widespread fear and panic among cryptocurrency enthusiasts, it seems that many investors took the opportunity to accumulate more digital assets at low prices.
According to the latest on-chain data, significant amounts of bitcoin have left cryptocurrency exchanges. The question here is: what does this mean and how does it affect the btc price?
Are investors backing the bullish rally to continue?
According to recent data x.com/intotheblock/status/1821912814845394981″ target=”_blank” rel=”noopener nofollow”>data from IntoTheBlockOver 28,000 btc (worth over $1.7 billion) were transferred out of cryptocurrency exchanges last week. This on-chain revelation is based on changes in the Netflows metric, which monitors how much of a particular cryptocurrency is sent in and out of centralized exchanges.
An increase in the Netflows value (or when it is positive) indicates that more funds are entering than leaving cryptocurrency exchanges. On the other hand, when the value of the metric falls below it, it implies that more crypto assets are leaving trading platforms than entering them.
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Source: IntoTheBlock
As shown in the chart above, the Netflows metric for bitcoin has been on the decline for the past few days, implying that large investors have been transferring their assets from centralized exchanges. According to IntoTheBlock, the $1.7 billion worth of btc withdrawn in the last seven-day period is the largest outflow observed within this time frame so far in 2024.
While it is difficult to pinpoint the reason behind this mass exodus, cryptocurrency movements of this magnitude away from centralized exchanges typically indicate a shift in investor sentiment. It suggests a change in holding strategy or even renewed accumulation by large investors, demonstrating their faith in bitcoin’s long-term promise.
Furthermore, the decreased availability of the main cryptocurrency on trading platforms could lead to a shortage of supply. Ultimately, this drop in the btc exchange reserve may lead to an increase in the price of bitcoin.
bitcoin price at a glance
Following a steep drop from over $64,000 to $48,000 on Monday, August 5, the bitcoin price has shown significant resilience over the past week, pushing its way above the $62,000 level.
At the time of writing, the top cryptocurrency is trading at around $60,400, reflecting a 1% price drop over the past 24 hours. Meanwhile, data from CoinGecko shows btc is still down more than 3% this week.
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The price of bitcoin hovering around the $60,000 mark on the daily timeframe | Source: BTCUSDT chart on x/06kdXeNT/" target="_blank" rel="noopener nofollow">TradingView
Featured image from iStock, chart from TradingView
