More and more, Bitcoin is leaving centralized exchanges.
A general market correction for cryptocurrencies has characterized the last week. During this time, Bitcoin holders (mainly whales) have been moving Bitcoin from exchanges to private wallets. Although there have been some inflows to exchanges as well, the outflow has been more frequent.
Data from Santiment indicates that 25,878 BTC have been moved off exchanges in the last 24 hours alone. This is the largest exchange outflow difference recorded in the previous five weeks, suggesting that a progressive increase in Bitcoin outflows is being witnessed on the network, but what does this mean for the digital asset and those holding or trading it?
📊 25,878 #Bitcoin were moved off of exchanges in the past 24 hours, the largest difference between outflow & inflow in 5 weeks. Historically, large quantities of $BTC moving off exchanges leads to price rises given a few days for the pattern to hold. 👍 https://t.co/wZ4Q8LZsxn pic.twitter.com/UCWp7G5WuZ
— Santiment (@santimentfeed) April 14, 2022
Outflow spikes lead to price rises.
The good thing about Bitcoin is that it leaves patterns for those interested to read, understand, and predict price behaviors in the future. In the past, BTC outflow from exchanges usually led to price rises. This is shown in the chart below, where two outflow spikes led to 24% and 26% price increases, respectively.
Santiment’s data suggests that this may be the case this time as well, provided that the pattern holds for the next few days. If that is the case, we should expect the asset’s price to rise significantly in the coming days despite the current stagnation seen at around $40,000. The only requirement now is for the pattern to be sustained, which cannot be guaranteed as investors decide the market’s direction with their actions.
How Bitcoin is faring
Bitcoin has not experienced any significant volatility since the correction on 11 April. After dropping below $40,000, a brief relief rally took the price to $41,000 again, but it has not been able to grow past that.
At the moment, “Things aren’t looking good for Bitcoin, but bears can’t celebrate until a weekly close below $37,600,” analyst Nebraskangooner tweeted, as the daily chart shows a close with a bearish engulfing candle. However, if the weekly candle closes above $37,600, the analyst says Bitcoin may bounce from here.