An Average of 2k BTC Per Day are Now Leaving Exchanges
Bitcoin witnessed a dramatic sell-off during May 2021, which resulted in the price of the leading digital asset to plunge by around 50% from its peak. A prominent characteristic of this sell-off was that a flood of BTC entered crypto exchanges, which were previously experiencing unseen levels of Bitcoin shortage.
However, fresh data from the leading blockchain analyzer Glassnode reveals that the bear market could actually be nearing a bottom as Bitcoin supply on exchanges continues to considerably diminish. Data unveils that over the last two weeks, traders have been withdrawing around 2,000 Bitcoin per day.
Bitcoin Quietness: The Calm Before The Storm?
Over the last couple of weeks, the price of Bitcoin has been consolidating in a narrow range above $30,000. During this period, which extends to beyond seven weeks, Bitcoin has been what same have called “impressively quiet,” showing little signs of momentum.
In fact, last week Bitcoin witnessed its quietest trading week so far in 2021. Bitcoin trading volume dropped to $1.58 billion, the lowest since October 2020. Meanwhile, some traders have been exploiting this quietness by putting on “short strangles” — essentially a bet that Bitcoin will remain in the uneventful range it is currently trapped in.
The analysis firm Glassnode described this unprecedented quietness in its latest report. It said:
“It is starting to feel like the calm before the storm as muted and quiet activity appears across spot, derivative and on-chain metrics.”
It is worth mentioning that some analysts believe this quietness will come to an end with the upcoming U.S. CPI report for June. Previously, in May 2021, the Consumer Price Index for All Urban Consumers increased by 0.6%.
Many investors view Bitcoin as a suitable hedge against inflation. Thus, the release of the June consumer price index can push countless investors who are searching for a hedge against inflation towards Bitcoin.
Nevertheless, not all traders have been dormant during this quietness.
Traders Are Now Withdrawing 2,000 Bitcoin Per Day from Exchanges
Bitcoin reserves on crypto exchanges has been constantly declining since late May, currently at a rate of roughly 2,000 Bitcoin per day. The current supply of Bitcoin on exchanges corresponds to April levels, when Bitcoin was trading at its peak around $65,000.
As of now, there’s merely 2.5 million Bitcoin available on crypto exchanges. In the last three weeks alone, 40,000 BTC have been withdrawn from crypto exchanges. In comparison, a total of 140,000 Bitcoin is estimated to be deposited to exchanges during the May sell-off.
Looking at these numbers, it becomes clear that Bitcoin is leaving centralized exchanges at a rapid pace. Moreover, an increasing number of hodlers are refusing to sell their Bitcoin holdings. Combining these two facts, it seems as if entities are accumulating Bitcoin.
Data from crypto analytics firm Santiment also supports the “accumulation” theory. Prior to this, on July 5, the firm declared that Bitcoin reserves on crypto exchanges has reached a 6 month low.
All in all, it can be argued that more traders are currently accumulating Bitcoin. Whether or not this eventually leads to Bitcoin breaking out of its current ‘quietness’, is entirely unknown.
Do you think Bitcoin will soon manage to break out the uneventful pattern it is currently trapped in? Let us know in the comments below.