Bitcoin Outflows Reach Four-month High
11 Sep, 2024 ● Coin news
Recent data shows a substantial increase in Bitcoin outflows from exchanges, with around $750 million in assets withdrawn on September 10.
Data from IntoTheBlock (ITB) indicates this is the largest net outflow of Bitcoin (BTC) since May, potentially signaling a shift in investor sentiment as the BTC price hovers around $57,000.
In a Q&A with Cointelegraph, Juan Pellicer, a senior researcher at ITB, explained that such outflows often indicate a change in sentiment, as investors move coins to private wallets in anticipation of price increases, adding:
“Regulatory concerns can prompt withdrawals as users seek to avoid potential restrictions. Institutional accumulation typically involves large-scale transfers from exchanges.”
One possible reason for the spike in outflows is the transfer of BTC to "cold storage" hardware wallets, a common practice among traders and investors when moving assets off exchanges.
Pellicer noted that a “growing trend of self-custody” is contributing to these outflows, driven by security concerns, as BTC holders increasingly turn to cold storage.
The volume of BTC leaving exchanges on September 10 suggests institutional involvement, with Pellicer highlighting the “$2.95 billion volume of yesterday” as a sign of significant institutional activity.
Institutional activity in the cryptocurrency market, particularly in relation to these significant BTC outflows, may signal a more long-term bullish perspective on the asset.
Historically, large Bitcoin outflows have been associated with subsequent price increases, primarily due to a decrease in exchange supply combined with rising demand.
Pellicer confirmed this historical pattern, explaining that it “stems from basic supply-demand dynamics.”
According to ITB data, on May 31, 16,050 BTC worth approximately $1 billion in net outflows left exchanges, preceding a rise in BTC price to $71,000 just five days later.
Sources:
https://cointelegraph.com/news/bitcoin-exchange-outflows-sept-750-million-surge
