25,878 BTC Withdrawn from Exchanges in a Day, Highest Net Outflow Over 5 Weeks

Bitcoin and the broader altcoin market have been showing signs of weakness for the last couple of days. Nonetheless, on-chain data and technical metrics paint a bullish picture, suggesting that a breakout could be imminent. 

Bitcoin Exchange Outflow Hits Five-Week High

The net amount of Bitcoin leaving centralized crypto exchanges reached 25,878 BTC worth around $1.04 billion, on April 14. This is the largest difference between Bitcoin’s outflow and inflow in five weeks, according to data shared by the on-chain and social metrics platform Santiment. 

This comes in the face of Bitcoin showing an unprecedented resilience to hold its $40k support. Despite losing more than 7% in the past seven days, Bitcoin has managed to resist a sell-off and hold its $40k support, a level that has maintained its status as the midpoint of the three-month-long price range for the flagship cryptocurrency. 

Data by CryptoQuant further reveals that Bitcoin outflows from exchanges have been pretty aggressive over the past few months, starting in November 2021. This suggests that investors are interested in accumulating more Bitcoin at the current rates, which could lead to a supply shock in the near term. 

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Rising US Inflation Could Lead to Bitcoin Rally

Echoing the same point of view, Santiment suggested that the Bitcoin price will increase in “a few days” if the outflow holds. “Historically, large quantities of BTC moving off exchanges lead to price rises given a few days for the pattern to hold,” the firm said. 

The sentiment around Bitcoin, and the crypto market in general, is even more bullish when considering the most recent inflation report. Earlier this week, the Bureau of Labor Statistics (BLS) released its key consumer inflation report, revealing that inflation reached 8.5% in March, the highest level since 1981. 

Generally, the crypto market moves higher following red-hot inflation reports as investors turn to riskier assets in order to hedge their wealth against inflation. In fact, several popular investors, including Paul Tudor Jones, the American billionaire hedge fund manager, view Bitcoin as a better hedge against inflation than gold. Jones said in October last year: 

“It [Bitcoin] would be my preferred one over gold at the moment. Clearly, there’s a place for crypto. Clearly, it’s winning the race against gold at the moment.”

Meanwhile, Ethereum, the second-largest cryptocurrency by market cap, has also seen aggressive outflows recently. On April 13, more than $729 million worth of the coin was moved out of crypto exchanges while around $658 million flew into exchanges, suggesting a net outflow of more than $70 million. 

On the other hand, huge amounts of USDT have been flowing into crypto exchanges. More specifically, over $168 million USDT tokens flew into centralized exchanges on April 13. This is potentially bullish as traders transfer their USDT tokens to exchanges to be able to easily buy other crypto-assets, particularly Bitcoin and Ethereum. 

Nevertheless, at the time of writing, the crypto market is largely in the red. Bitcoin, for one, is down by more than 2% over the past 24 hours, currently consolidating around the $40k mark. Ethereum is also down by around 1.7%, with XRP being the only altcoin in the top ten that has registered gains over the past 24 hours. 

As of now, are you bullish or bearish on Bitcoin? Let us know in the comments below.