Bitcoin continues to see outflows from exchanges, showing that investors want to keep their coins out of crypto trading platforms (at least for a while). This could be a bullish sign for Bitcoin, as there are fewer BTC available to sell. Several analysts pay close attention to Bitcoins sitting on exchanges and how they fluctuate. A larger number of Bitcoins on exchanges might be a bearish sign.
Bitcoin Outflows from Exchanges Continue
According to data shared by the blockchain analysis firm Santiment, Bitcoin’s ratio of supply sitting on exchanges continues dropping hard. As they explain, the number of Bitcoin on exchanges has now hit the lowest level since December 2018, even when Bitcoin’s circulating supply is larger than at that time.
In addition to it, there is 13.5% less Bitcoin on exchange wallets than just 2 months ago, which shows that 1.6% of the total Bitcoin supply has been withdrawn from crypto trading platforms. If the market experiences a demand shock (i.e. a large buying pressure from investors all over the world), we could see the virtual currency moving higher.
There have been many times in the past when Bitcoin experienced sudden price moves. A lower supply on exchanges and a fast increase in the demand for BTC could definitely help Bitcoin continue to get closer to $45,000 per coin.
Another thing to take into consideration is that the trend of withdrawing Bitcoin from exchanges could continue in the coming weeks and eventually months. If that happens, then we could definitely see a strong buying pressure on Bitcoin.
Furthermore, over the last few years, we have seen how Bitcoin and cryptocurrency exchanges built new solutions and services for users to get fast and easy access to the cryptocurrency market. We are talking about different fiat on-ramp solutions and support for many different fiat currencies. Additionally, it is now possible to buy Bitcoin and other digital currencies with debit and credit cards, which was more difficult in the past.
Thanks to the expansion of the cryptocurrency market, we could see Bitcoin continue its upward trend in the coming weeks and months. Let’s not forget that in 2021, Bitcoin surged up to $69,000 per coin and then it entered a consolidation phase in which the coin was traded between $36,000 and $45,000. Now it is just a matter of time to see how far Bitcoin can move thanks to a lower liquid supply on exchanges.