Bitcoin’s fundamentals are bullish this week as BTC exchanges are now at multi-year lows, while top crypto asset management firms such as MicroStrategy and LUNA keep accumulating more BTC.
BTC Outflows On Crypto Exchange Hit New Heights – Glassnode
Glassnode’s weekly crypto insights newsletter revealed that BTC outflows on crypto exchanges hit new heights this week. Part of the newsletter states that “clearly, BTC exchange balances have reached a historic low as it responds to BTC Whales’ accumulation over the past seven days. This monthly outflow reached 96.2K BTC last month.
It added that “It is rare for outflows of this magnitude to occur, and it has only happened a few times since the history of BTC.” Using BTC’s current price of $43.7K shows that the monthly BTC outflow from exchanges is now worth about $4.5B. Hence, it is no wonder that there was a significant drop in exchange market liquidity as it declined to 2,473 BTC.
It is the first time in four years that the amount of the leading cryptocurrency on exchanges has been this low. Despite a BTC price correction following 30 days of gains, understanding these fundamentals are still vital to BTC price performance over the short and long term.
Where Are All These BTC Going?
Based on Gresham’s law, the crypto investors consider BTC as good money, even though most would likely go ‘off risk’ this quarter. The question on many people’s lips is, where are all these BTC going? The short answer is that many BTC holders are withdrawing their coins from exchanges into their private wallets.
Glassnode surmised that it is not only BTC Whales withdrawing their BTC from exchanges; small BTC holders are also doing likewise. The report Glassnode’s insights newsletter is based on an analysis of various data metrics and algorithms. In addition, wallet addresses with 100-1000 BTC acquired more BTC last month, and they have started this month doing the same.
More BTC Accumulations Already This Month
Earlier in the week, Microstrategy CEO (Micheal Saylor) announced that his company had bought another $195m worth of BTC. Similarly, LUNA stablecoin issuers (terra) revealed this past weekend that it has $145m worth of the leading digital asset as collateral for its native token (LUNA).
The Glassnode newsletter remarked that all BTC holders, regardless of wallet size, are not slowing down in increasing their BTC holdings. “This indicates that the current market bias is to hold BTC and the majority of the top altcoins over the long term instead of converting them to cash or using them to trade on the crypto exchange markets.
Crypto analytics platform, Santiment, confirmed Glassnode’s assertions when it tweeted that there has been a huge spike in BTC’s social volume and social dominance on-chain metrics over the past 24 hours. However, this spike hasn’t had any positive impact on BTC price as it continues to trade within the $45.5K range.