Bitcoin Forum

One indicator is telling me that Bitcoin is preparing for a new major bull run and we are still early.

If we look statistics from 2010 number of Bitcoins sent to exchanges was mostly growing up until February 2020, with few breaks in 2017 and 2018.

Since February 2020 we can see clear reducing number of Bitcoins from Exchanges, and withdrawing to personal wallets.

This is good for many reasons, but most important is that people are in control of their bitcoins.

Bitcoin on exchanges from 2010 - 2020
https://i.imgur.com/SFF5gtm.png
https://glassnode.com/

Bitcoin on exchanges from October 2019 - October 2020
https://i.imgur.com/8kESxrg.png
https://glassnode.com/

I am not sure about the accuracy of the data you have gathered but if I consider them as correct, I can assume people are more willing to HODL than trading or selling off their bitcoin. Which is not a great trend apparently because more bitcoin in exchanges means more trading activity and more liquidity.

So less bitcoins in exchanges will mean more bitcoins will be locked in personal wallets without moving into the market. Which literally means less liquidity flow into the market.

But bitcoin market is not a traditional market. So not sure how the market will react on this.

If the statistics given is accurate, do you opine that due to fewer Bitcoin users withdrawing their funds through exchanges, Bitcoin is on a bull run? The Bitcoin market reacts in many ways and this info may actually not mean an appreciation in price leading to a bull run for Bitcoin, it could actually mean the opposite, but we'll see the direction the BTC market takes in few months to come, I prolly think the halving of few months ago is a better indicator of a bull run.

That being said, mind you that exchanges aren't the only means of exchanging Bitcoin, it could also be that more people now exchange their Bitcoins via P2p trade and not on exchanges, and hence withdrawals are still happening.

Yeah but holding doesn’t give clear idea regarding reduction in the crypto exchanges volume. I mean what’s the relation here? I believe holding would actually make this reduction very slow process. It will actually make those graphs very stable rather than going down.


Exactly this is the point I am making here. The market won’t actually move really. It would only go down if there is huge dump in the bitcoin capital.


Whether it is traditional or real but however logically current market is growing a lot. More and more investors are coming into crypto space. That only states one thing, it shall be moving up.

may i know the reason why holding or transferring bitcoins to personal wallet is a good reason? does it have any good effect to the current price of the bitcoin? i think if many people would hold their coins there would be a low trading volume in the market and this will result on slow change on the market and maybe slow progression of the bitcoin's price.

I agree with the OP that bitcoin is now preparing for the new bull run, and maybe the time will be happening this year or next year.
But we don't know the truth when the bull run will happen. We could only hope for that.
Maybe when the price can break $15k or up to $19k, we will see the bitcoin amount transfer to the exchange wallet.
But right now, I guess bitcoin price is on a good track to increasing the price, although we can see it will be up and down before the bull run happens.

I think that is because it will safer to holding bitcoin to personal wallets if we do not want to sell bitcoin right away.
Besides that, we can prevent the stealing that can happen at the exchanges too.
It affects or not, but for the bitcoin owner, they don't have to risk their bitcoin from the hacking, and they will only transfer their bitcoin to the exchanges if the price increase to their target price.
Many people will still trade their bitcoin as they want to increase the bitcoin amount, but they hold a big part of the bitcoin amount in their personal wallet for safety reasons.
Sooner or later, the bitcoin number at the exchange will slowly increase as people will know when their time to transfer the bitcoin to the exchanges.
The important thing here is we can make more bitcoin from trading before the bull run happen.

What could certainly be the significant relationships of people are now tending to withdraw their Bitcoins from exchanges and barely just wanted to store it into their personal wallets will make an assurance that Bitcoin will get into another major bull run? How could it possibly be a good reasoning that since people are out of withdrawing their Bitcoins from certain exchanges would lead or contribute to the bull run you were saying?


This would exactly be the point. People storing their Bitcoins on their personal wallets instead of doing trades will lead to the price of it to be stagnant or might cause into a mere down fall (it depends if it will be a soft dump or might be massive one) since people are prohibiting themselves to do trades meaning the circulating volume would also be reduced. Yes it is good that people are storing their Bitcoins on personal wallets instead of exchanges for exchanges must not be treated as storage wallets. But if people would just tend to hold their Bitcoins in their personal wallets, slow progression would be the effect of it on the Bitcoin price in the crypto market.

Bullish.

It's probably worth noting though that the Bitmex margin cascade in March and the criminal charges being filed against them this month probably exacerbated this trend. There has been a big exodus from Bitmex this year, which has created a vacuum in the BTC derivatives space. When that vacuum starts filling again and new contenders establish bigger market share, we may see coins flowing back to exchanges once again.

It isnt really losing its balance but this mean that people are really that becoming smart on not to put up all of their coins on an exchange.Yeah it can really give out those less numbers but actually
those people who do held much is just waiting for the right time to step in.Pretty much sure that there are lots which had already been allocated in any possible market movement that we do saw.

We shouldnt stress out ourselves if its becomes less as year goes by because it doesnt mean that it do shows less interest or reverse adoption.People are just really wise enough because
we know that these platforms are honeyspots to be targetted out by hackers and people had really just learnt their lesson.

Adoption doesnt only show on how much volume does an exchange have or the coins that been held up.

Being 2020, another factor could be because of the recent DeFi hype. It's said that a good amount of bitcoins got tokenized on the Ethereum network and got locked up. This can affect the amount of bitcoins kept in exchanges as some people are looking to make quick profits from DeFi projects,

Around 133,405 BTC ($1,557,885,255) as of today according to btconethereum.com has been tokenized on Ethereum network. 130k BTC may seem little compared to bitcoins circulating supply but when we look at the actual number of Bitcoins that are actively traded and transferred daily between exchanges, then the amount starts to look significant

https://talkimg.com/images/2023/07/19/Zle92.png
Source: https://btconethereum.com

Because Bitcoin you keep on exchanges is not your bitcoin, and exchange is holding private key and not you.

It is true, lot of Bitcoins is withdrawn from Bitmex, and we should also mention recent hacks including Kucoin and other exchanges exchange.

It could be partially, but I don't consider that to be bitcoin anymore, as that smart contracts are full of bugs and they can break at anytime, if they want to risk it let them do it. Trading on dex however was much higher than before for sure.

or because crypto users already learned their lessons not to store their btc or funds in those exchanges. as there were so many hacking incidents, even top exchanges, they finally decide not to store their funds in exchanges and just hodl it in their own wallets. just what others already mentioned and im more inclined on this reasoning.
p2p trading is i think still not huge amount to have impact in charts. imho.
 we are always seeing this very simple of advice - dont store your funds in exchanges. and hearing/reading many times over. store in wallets where you have your own keys. so maybe majority of crypto users are securing now their btc in their own wallets, finally learning their lessons!

Bulls as it is. If the data were verified and accurate, we can have a conclusion that no one's going to sell no matter what.
Pandemic? everyone held.
Bears? everyone still held.
Now if we get to see these signs just as what happened just now, it's encouraging to buy more and hold your horses.

Well, it doesn't automatically follow that since people are not anymore keeping their Bitcoins in exchange wallets they are already in control of their Bitcoins. It may happen that they just moved them from exchanges into custodial wallets, may it be mobile or web or desktop.

I agree that this is good for many reasons, chief of which is about security. It is less secure keeping one's Bitcoin in exchanges. History is telling us so.

This could also mean people are shifting from trading into pure hodling. A lot might have realized that trading is no good anymore, that it becomes harder each day trying to catch the next direction cryptocurrencies would take.

But if everyone, including the whales, held their bitcoin, we will see the bitcoin amount in the exchanges will reduce a lot, and people will not have a passion for trading bitcoin.
The crypto market will not go to rise as we see now, but the crypto market will be at a low price without we can predict when it will increase except if the pandemic really ends.

The pandemic makes people out there lost their jobs and even lost their lives.
But for people who already know the crypto and know that crypto can be their source to make money, they will still try to use it to earn money.
We are still at the bears, but my feeling is we almost see the bears will be gone from the market because the price can increase and break the $11k level.
That can give us hope to buy more bitcoin and hold it while waiting for the next high price.

The notable thing here isn't really about security (custodial vs. non-custodial). It's the fact that there are less and less BTC deposited on exchanges = less available supply to keep prices down. That's a bullish factor.


Bingo. I see BTC being accumulated and withdrawn from exchanges. That's what happens during bull markets. The ask side gets thin and price eventually floats upwards.

This chart indicates the rise in the number of people giving priority to bitcoin as an investment for long term than keeping it idle on exchange wallets. Maybe the increase in number of hacks on the exchanges also a reason for the large volume of funds getting moved to personal wallets from exchanges.

However with time the volume of funds in exchanges will have variation with regards to the price fluctuations. This also will have a variation on the data sheet.

It might also be due to DeFi, interestingly enough:


On top of that, we're seeing institutions like Grayscale hoard Bitcoin in full swing real time. The last time Bitcoin exchanges were this low was November 2018 according to the article above, which was a bearish preiod, but all signs right now definitely point to bulls. We're currently in a very interesting period where we're seeing actual growth not based on external hype.

The supply is not reducing at all, rather its scattered and it doesn't mean that the holders are burning their Bitcoin because if they sold it someone will buy it.
Exchanges are growing not just for bitcoin but for so many altcoins project so I believe some of them just trading their bitcoin so they can have the good tokens on their hand.

Besides, people are having a trust issues with the exchanges and maybe its safer for them to liquidate it and transfer it to their own wallet which they control. The bull market is coming, they are also preparing for that and they want to become a safe hodler.

The most curious thing is that exchanges suggest people to keep their bitcoin here instead of own wallets because they are more secure and safe but the hilarious is that after stating such proposal by the CEO of Binance, this exchange was hacked after 1-2 months if I amn't mistaken.
It's good that people prefer to keep their bitcoins in their own wallet instead of exchanges. I think this behavior can be a signal that people are expecting bitcoin's price to rise and want to keep their funds more secure right now. Maybe this opinion is illogical but personally I find some logic in it. When something is valuable or you think will become valuable, then you take care of it more seriously.

I think It really depends on whether people are withdrawing to "hold"...and really hold, or they are using bitcoin within a Bitcoin economy/ecosystem without selling too much for fiats or other currencies.

I agree with you op for the fact that inflow of bitcoin was going major to exchange in 2017 bringing more liquidity, remember during the period of ICO, almost 95% of the ICO project were listed in exchange thereby there was plenty of bitcoin on exchange for trading, and this incidence is even more than now of later day transaction, traders having the mind of upcoming bull run is saving their bitcoin in preparing of it, in that case it deduces liquidity.
How do you really think that the percentage of hodling bitcoin in personal wallet will not result to the occurrence of bull run?

Many people are still holding their coins waiting for what happened in 2018 to happen in this 2020 when the price of bitcoin went higher than never before. Your bitcoin is your bitcoin, you have the right to hold it to when your spirit tell you to release it for market.
I think there are still more bitcoin  supplier in the market than demand which they are few in the market, that got people talking that bitcoin on exchange is reducing in this 2020.

Withdrawing bitcoins to their wallets does not necessarily mean that they are moving it away from the market. They may possibly opening up OTC deals and also preparing to spend those coins. This could also be an indication that some people have been running low on liquid fiat cash at hand and they need to cope with the crisis currently and thus liquidating these assets.

The second possibity is very likely because for the last few months bitcoin price has been very stable above the 10k USD mark. So you might want to sell some for fiat before holding onto the rest.

But, if that was the case why suddenly people starting doing P2P trades. Platforms like localbitcoins are doing great and have increased the number of trades for sure but that does not mean everyone would suddenly jump on such platforms and start doing P2P trades. And actually I have been doing P2P trades since a long time and I can easily tell you that P2P is never a good feeling because it being a manual process is tiring and time consuming so actually I always prefer doing direct trades unless fiat is involved.

I am not really sure about what to make with the chart given in the OP but that might be indeed a sign of market trends changing and a bull run coming more since we are close to the new year now and more people start to hold their coins I guess.

This indicator does show us many things. People tend to hold their bitcoin instead of making any trade on the market and this spot out that many people believe bitcoin will go up in the near future. Well, what are you waiting for right now? This is the best time for you to jump right up a bull train before it even starts dramatically. Dont waste your chance like what you did in 2017-2018.

Having a couple of ethereum in my wallet. Hope that they will soon give me a significant profit in the future. I was ignorant in 2017 while blindly holding my coin without taking any profit. Now, the circumstance has changed. I have become wiser and more experience. I will not let this opportunity slips away

I am not really sure about the accuracy of the data displayed by the site but even if it is true then it shows that the majority of crypto players do not trade but HODL their coins to private wallets.  I myself not very active in trading so why don't I put my coins in an exchange wallet but prefer to keep it in a private wallet which is much safer..

There is no accurate data when it comes in predicting the possible price. Specially if it tells about bitcoin which has more volatility compared to stocks and other coins in market. If you believe that it will goes up at the end of year, then hodling is best choice. As of now, bitcoin gradually moves up as it surpass the 11K dollars resistance.

I guess proof of keys that happens on 3rd January when Bitcoin was launched in 2009 is early this year. Having coins on an exchange is asking for troubles. When I personalty need to exchange a con i send it to an exchange , swap it fro other coin and then withdraw it. It takes an hour max. They have only 1 hour to somehow fuck it up and waste my coins. Very tiny chance.

Everyone who has doubt about information I posted I say don't doubt but go and check for yourself on Glassnode website and links I posted.

And you are doing it all right because exchanges are for exchanging coins and not for keeping them.
I prefer to do exact same thing like you.

The amount OF BTC on most exchanges is decreasing as the chart shows and it is showing in the sell side of the market. I think you need to consider the OTC volume also before jumping into conclusion. I read that the OTC trade volume has increased significantly recently and if the big player starts using OTC then this is something to factor in. Most of the big funds and companies are deploying capital into Bitcoin, if they are buying on exchange, they won't leave their BTC on exchanges but move it to their safe wallet.

This still doesn't mean the price cannot drop, I understand the excitement as everyone assume institutional really want to hold Bitcoin for long term, I am really concerned about the big whales when they decide to sell. Early this month, there was a movement of 50btc that was mine 2010,suddenly the market began to crash, if the above analysis is true and verified, such things wouldn't bother traders and holders. I ponder what will happen when large institutional investors begin to move their Btc back to exchange.

If the Bitcoin amount on exchanges is going lower, does it mean that many people prefer to move their BTC to their personal wallet and hold it?
Well, if this happens, it may have something special there probably. We can't ensure what will happen next, but will it mean another bullrun?
It may not be specified easily for the bullish market soon. But, it means that many more people believe in BTC, believe that it is important to hold BTC because someday, the price will go up significantly and make a boom like what happens previously or probably more than it.  Well, let's see what next

Speculation insights could matter but in my own opinion after experience losses in investment I made up my mind not to believe in everyone's speculations because most of it are just HYIP that will going to happen or not. So I should had made my own decision and choice if to invest more or not. This time since bitcoin market is high it is not advisable to invest unless market will going to crash again and that will make bitcoin 3K USD per btc and if it happen high chance that I will invest again a money that I can afford to lose.

There's a lot of difference from that two charts. Because we are in a situation where in we need to manage well our bitcoin. What i mean was that, this pandemic that hitted us makes some of the investors pull out some of their bitcoin in crypto exchanges. There's  lot of reason why they are withdrawing their bitcoin.
 
 Bitcoin these past few days took a small pump, it is gaining some strength to finally took the pump.

Bitcoin still not touch $11,500 and it stays at below $11,500.
But I am sure that bitcoin price will break that price soon.
This pandemic makes people think about making money from many sources, and luckily for people who know about crypto, they can use crypto to make money.
Maybe those people want to hold their bitcoin in their wallets because they concern about the hacking in the exchanges.

The small pump help people to gain some profit for a while, and I think many of them are making some money.
But in a long term, bitcoin will have a big pump like before, and I am sure that pump will be bigger than before.
Although the pump will not happen quickly, we can still use that pump to make a profit.
Maybe the price will increase step by step and not directly jump to the highest price. That can be good for us if we can try to buy low and sell high.

In the case of every trader it is a good idea to buy at a lower price and sell at a higher price but it is a long wait bitcoin is a type of crypto-currency or virtual currency the price of the coin fluctuates. The demand for bitcoin investments has increased significantly due to the effects of the epidemic but the balance of bitcoin is very good although the exchange rate has declined. Traders are holding on to high prices bitcoin is moving slowly but it will be very profitable for investors.

 not early and not late but bull run is a bull run and we all want this  . 2017 and some parts of the 2018 are the year where btc grew noticeably , the trade between these times supposed to be verry active than on other years  . im confused if reduced activity is good or bad because if people dont trade actively that means they are holding but active trading is also a sign of a healthy market  .

not your keys not your coins is what they always say so this is a plus point for the people that are now not sending coins to an exchange

Part of the reason why bitcoin balances on centralized exchanges reducing is because bitcoin is being gradually accepted as a potential store of value. Bitcoin started its way, like any other hard money before it, as a commodity or collectible, and now the vast majority of people familiar with bitcoin consider it a good instrument to keep your wealth. But bitcoin is yours only if private keys are in personal possession. Thus, we can conclude that bitcoin is good at storing value, but centralized exchanges are bad at storing bitcoin, they either have been hacked or will be hacked, they cannot be trusted when it comes to your own funds. That is why rational people prefer to withdraw their money from exchanges and keep it on personal wallets.

I would like to believe that the record low number of BTCs on the crypto exchanges is because investors realized that their crypto assets there are not safe, but as someone already mentioned the outflow started happening when DeFi started coming into focus, so I believe many actually bit into this bait in the true way they bit into ICO&altcoins back in 2017.

On the other hand, we know that crypto exchanges are not very transparent with their data, and the companies that analyze them see only what the exchange allows them to be seen. Maybe that's why some exchanges have started offering an interest option in order to deter users from withdrawing coins to their personal crypto wallets.

It can mean that there are lots of bitcoin traders that turned to be bitcoin hodlers.
It might help bitcoin to have an increase to it's price because of the reason that lots are hodling bitcoins.
It could also mean there have been huge shift from bitcoin pair trades to altcoin pair trades, I guess maybe due to it's high votality which some (or most?) traders are looking for even though it is too risky.

I guess there is a big part of constitutional investments that make up the difference. Back in the day it was mostly people who had bitcoins and it was mainly the miners who were the big investors, however nowadays it is not like that, there are plenty of places like grayscale and so forth that invest hundreds of millions of dollars, and these are the ones we are aware of, these are not even the ones that we have no idea about, which is why I believe there is even more as well that we do not know that was bought by huge companies.

When you consider all of that, you think you would keep hundreds of millions of dollars worth of bitcoin in an exchange? Of course you wouldn't, and that is why there is less in exchanges since there is more in companies personal wallets.

Or maybe more of the bitcoin investors is now learn their lesson and know that there is a high risk loosing it, when you stored your crypto/bitcon in exchange than having it in your wallet .

We have a lot of scam exchange news hacked etc and that's what I think the main reasons why they prefered to have it in thier own wallet. and use only exchange when they need to convert to other crypto currency or Fiat .

Hopefully yes, since there are so many incident that crypto exchange is hacked also there is some issues that always happen in the exchange like kucoin now, and personal wallet is a good way to save bitcoin.

If more people save bitcoin as much as he can we will see its price will never go to zero as many people think bitcoin could collapse one day. Yeah, bitcoin still new to be said as an investment place and an investment who has a high risk rather the other investment place.

But, if we hold this situation, I mean we as the user always hold our bitcoin and never sell our bitcoin when the price decreasing we will help bitcoin alwasy stand in any situation and of course there will be many people who will come and believe that bitcoin can be said as an investment place like other.

We should be able to compare the volume of the larger DeFi contracts to exchange balances to get a better idea of DeFi's effect on the market. I'm guessing DeFi played a role but I think the bigger factor was the March crash. That's why the peak was in February.

For one thing, as price shows, that crash was a massive bout of accumulation. Essentially, weak hands sold to strong hands, who then withdrew their coins from exchanges.

For another thing, because of the magnitude of the crash, a lot of traders got wiped out. Liquidated and/or broke, they left the market. At least temporarily, that has left a vacuum in exchange liquidity.

I think so! After 10 years of bitcoin ,I think people already learned how to keep their bitcoins and storing bitcoins in exchange is really not secure unlike if they put it into their own wallet with their own password and private key.
Holding bitcoin on their own wallet will lessen the supply in exchange which has the tendency to surge high in value of it. So, if this will continue then I think there is a possibility that the another ATH will come earlier but we still don't know if when but we are still hoping.

I don’t know about this for sure if there is going to be a bull run, but I have seen a similar news around August, and they were also saying that this is a hint that Bitcoin is about to be going for a bull run, but this is October and we are still waiting for a bull run. I don’t really know how this works, but I think not being traded on exchanges means that there will be a released liquidity in Bitcoin, and liquidity is a very important thing in every market.

Of course the news I read then said that when there is a decreased buying and selling of Bitcoin it means that investors are now into HODL because they believe in Bitcoin. I just don’t know all these things.

People who were economically stronger bought Bitcoins when the prices were crashed and basically they will hold their assets in long term and also exchange hacks are too often in the past years so people learned the importance of security while holding their funds.

Somehow that DeFi seemed to me to be the most logical reason for people to move their BTC from the exchange - but this reason of yours definitely makes sense, it's amazing how whales profited on that crash, and as always weak hands probably still wonder why they didn't keep their BTC. On the one hand, it is good that less BTC is kept in custodial wallets, but again, it is bad if they end up in various crypto projects that have no future and could end up like the ICO a few years ago.

No one is having skeptism about what you posted, information might be true as stated but this cryptocurrency. People can withdraw any amount they way want and still resale outside the exchange. We have local merchants and retailers, there tons and thousands of transactions that are been conducted on pair to pair desk or OTP.
There are other similar cases that 500k Btc left on exchanges that has surge the market many times, I bet you saw the case of onecoin scam and how they dump there Btc and ethereum on exchanges.

Hopefully it will get lesser and lesser, bitcoin wasn't invented so that people could make profit from it and leave it aside. If you buy bitcoin at 100 dollars and it becomes a million dollars each, you all would sell it, I would keep it because I would realize that there must be a reason why bitcoin is a million dollars and it would mean bitcoin could be used to purchase stuff as well, everyone would want a piece, so I wouldn't need fiat anymore at all.

However people are forgetting that we are not at that level anymore, we are lower so they all consider the pricing and profiting as the only thing that matters. I believe as long as people put their money on exchanges and make them richer, we are not going to see bitcoin adoption increase too much to a point where we can spend it everywhere.

Yeah, by assuming that the data is correct I believe there can be another reason why people are not storing their bitcoins on exchanges and that is because keeping coins on exchanges was never safe and now days more awareness is spreading regarding this. I myself used to store my bitcoins on binance and I trust them a lot but I don't use them as wallet anymore so that might be a reason.

But you might be right that people have started to store more bitcoins now and that is the reason less people are trading but I doubt that because even when traders are holding they will always buy sell various other coins simultaneously so there is always activity going on from their side.

Cryptocurrency is withdrawn from the exchange by large campaigns, for which getting a profit of 8% per annum is not large compared to their expectations. But I changed my rules for storing BTC and transferred them from my wallet to Binance in order to get a profit by placing them on the deposit.

DeFi brought a lot of opportunities for the early investors, those who wisely played with it and timed their trades so well. But it lured the crypto enthusiasts so bad that they could not resist from investing in DeFi projects after seeing huge success of YFI. DeFi is the reason why btc was moved out of exchanges but there were some causes:

• Traders feared the FUD going on at exchanges
• Traders got scared of themselves that they may get lured to invest in yield farming and liquidity pools
• Traders invested a lot in DeFi projects but lost because of the crash
• Whales played well by liquidating many small traders at once and made fortunes by doing that

Btc not being at exchanges is really good because traders are now understanding the values of crypto and are scared about exchange hacks too, better control their btc in their wallets. It also serves as an opportunity for whales to pump back btc prices because sell area is vanishing.

Or most purchases at recent times are just from giant companies and institutions and they just transferred those coins into their cold storages. With the surfacing of reports about companies buying thousands of bitcoins in one go, it isn't really a wonder why most coins are disappearing from exchanges. Also, due to the countless hacks that have happened even to some of the most reputed exchanges, it's better to be safe than to be sorry. 2010 vs 2019 data says nothing constructive IMO, and in fact if a bull run is indeed waiting to happen, most coins would be on exchanges ready to get swapped in-between hands for price actions to start.

Exchanges are not really the only thing that bitcoin price is affected by, people could still sell their coins even at lower level if they do not want to wait for it to go up, which means instead of having a ton of bitcoins not being sold, we could have few bitcoins all being sold on the market, so the price doesn't really get impacted by the amount of bitcoin in the exchanges at all.

I feel like there needs to be a reason for bitcoin to go up or down, it can't be for absolutely nothing at all. Which means if we could have a news that is so major that bitcoin should be going up, we could see a market price movement higher, this news is not like that, we need something more, or it could be something that could be bad for fiat, that usually helps us as well.

well. this data may be a trick. i believe that trend of bitcoin is depend on mostly few group of people and funds like Grayscale. They can shift their bitcoin from exchanges to their wallet or vice versa for manipulation. not a big deal.

Of course this is good news, with reducing bitcoin balances on exchanges, making me wonder, are investors turning for the long term?
Or is this just a security measure to prevent losses on the exchange ?, like the case of the Kucoin hack ?,
if investors save in personal wallets and in the long term, inevitably!, Bitcoin will go to the moon!

Reducing from bitcoin balance maybe some investor hold their assets on personal wallet not in exchange wallet like nano ledger and other private wallet, when something bad happen to them they have forget giving data information to other to open and check his bitcoin assets and giving way to bitcoin balance reducing. Although some side is bad but give chance for bitcoin will have little supply on market and have chance to see bitcoin at the future with higher price.

Withdrawing funds from the exchange to personal wallets is more likely due to concern for their own security - since a lot of exchanges has been hacked or simply blown away in recent years.
I'm not sure that your data supports your theory, but I still insist that such charts are related to the vulnerability of exchanges and the lack of guarantees for the return of lost funds in the event of hacks.

The first time the thread popped up, this is the same thing I reasoned. It could be people are withdrawing from exchanges to personal wallets due to high risk involved in those exchanges lately because of theft and hacks. As far as people still trade on exchanges, I don't think there is a reason to panic just yet. Let's wait for the bull run.

Maybe that is one of the reason why such things happen, recently there are several exchange got hacked so I think people are securing their funds for a while and putting it to their secured personal wallets while preferring it for a hold. Although I believe that there will be a bull run coming still we need to be aware for some market flaws gonna happen to avoid any losses for looking more forward for bigger price pumps came.

Peole finally becoming smart enough to use non-custody solutions. There are more DEXes than it was before. Maybe this affects statistic too

Not only hacking is what concerns them but the idea about the coming bullrun maybe they are waiting for the correction first so they are getting ready to buy again when the prices dumps before going higher and higher.
practically this is a good way of being ready .
but of course maybe the reason also is what happen in Okex exchange that has been taking into authority recently,so people are taking off first to make sure they will not be affected in case the government are into exchanges.

Makes me wonder if the time needed to move coins to an exchange will limit the supply during the next bull run and make the price skyrocket.
Think about it for a moment. The supply is getting low now, with the demand being relatively stable because people are moving coins from the exchanges. When demand explodes people who would be inclined to sell will not be able to get their coins to exchanges fast enough to satisfy the demand. I'm not a trader so I won't really benefit from it, but a big bull run would be good for Bitcoin's image.

The scenario is different from your posting to now. I think you will be happy to see the current price of Bitcoin in many exchanges. I have got some profit for holding these assets just for a few days. So it can be said that I am a little bit happy now. I want to see Bitcoin at least $15k within a short time. Expecting big changes in the market soon.

Security will always be the prior reason why people are moving out of the exchange.
Maybe some of them just realized the reality behind storing crypto in an exchange, that once you put those cryptos in a certain exchange you no longer own them, instead It's the under the control of the exchange already.
Most of the crypto exchange doesn't have insurance to cover their clients loss if something bad happened to them . So, its better be safe than sorry.

What if people are realizing about the cryptocurrency security and start moving their funds to their wallets? Recently Kucoin also got hacked so I see these are the reasons more than the bullish trend.

The numbers are real and I see people trading bitcoin less often, their hoarding trend since the bitcoin event plunged in March 2020. I don't know why bitcoins were collected. . The amount of more bitcoin gained is also increasing with the number of Tether released. I feel the hands of world tycoons silently buying bitcoin. Rare Bitcoin is an opportunity for a new bull run, I am very optimistic about this.

Which is actually the right direction for crypto community because so many exchanges got hacked/scammed that it is hard to trust any exchange even if it is of the caliber of Binance because really it takes one bad day and you lose all the holdings just because of being lazy and not installing a wallet.

I think reducing balance don't have much to do with people holding coins rather than trading but because people are now more aware and educated about how they can keep their coins in their grasp by holding the private key. I was someone who used to keep some balance on exchanges and I also kept some (not much) on Cryptopia and when they got hacked/scammed I immediately withdrew all coins I had on exchanges and pledged to never keep coins on exchange unless I want t trade them.

Even so, that could still result in the same sort of bullish pressure discussed by the OP. If you have funds stored on exchanges, you are much more likely to trade them than if it takes effort and time to deposit every single time. I know from experience.

This is actually a tool a couple HODLers I know have historically used: make cold storage difficult enough to access that they can't reasonably panic sell in a crash. It's the same idea, really.

This is also could be a reason - and I don't see anything wrong with it. In this case, it is not only profitable for whales to withdraw their funds to cold wallets and hold them, but also, as you correctly noticed, this allows you to limit yourself from FOMO attacks and do not make hasty decisions

It seems to me that the fear of another hacking of the exchange is quite a significant factor here.
And the more people leave the exchanges, the faster they will start investing in providing even super - excess security instead of writing themselves (for example) regular bonuses or paying for crooked marketing and stupid "bring a friend" promotions, and so on.
As soon as the exchanges resolve the security issue, the outflow of people will continue and distrust of exchanges as a place to store money will grow more and more.

The first exchange hacked that happened last month was Kucoin exchange when hacker tamper with their cold wallet and move away approximately $200 million worth of different coins, it affect the entire market as the same week, Donald Trump was reported to be positive to corona virus.
There have been another drama in Okex exchange about team who hold key to wallet exchange in police custody, who does that with such a huge funds?
According to Bitcoin.com (https://news.bitcoin.com/187000-btc-drained-over-2-billion-in-bitcoin-leave-the-top-exchanges-since-june/), about 187,000 BTC worth Over $2 Billion has been move from top Exchanges Since June.
Compared the two image.
Image A shows total amount BTC that was sitting on crypto exchanges on June 2020

Image B indicate the amount of BTC remaining on top exchange 4 days ago according to  Bitcoin.com (https://news.bitcoin.com/187000-btc-drained-over-2-billion-in-bitcoin-leave-the-top-exchanges-since-june/)

Personally, there is no point for another person to keep holding my fund, it's not about trust, security comes first. An exchange can get hack and once insurance is not covered, you will get burned and end up with nothing. The time factor of refunding your account may take a while, the trumoil may be huge with market collapse.

I am afraid this time the balance on the exchanges are reducing for the wrong reason, but ultimately the result could be the same, market wise.

My guess this time the balance of coins sitting on exchanges has been reducing over the last months not because people have become more conscious about the custody of their precious satoshi, so decided to withdraw on their wallet under the "not your keys, not your coins" mantra.
On the opposite they have been retrieving their coins because they want to put them at work on the DeFi smart contracts.
Wrapped BTC on the ETH ecosystem have topped recently.
So not only people haven't learned anything regarding "NYK,NYC", but also they are actively giving always those keys to the DeFi contract where the technological risks sums to the trust risk.

The effect, as I said, could also be less coins to play with for the speculators, but the reason could be very much the wrong one.

The market is always right. :P

It seems that there are many people preparing for a significant increase in the price of bitcoin, so most of them hold bitcoin in their wallets, this is of course in addition to whales collecting huge amounts of bitcoin as I mentioned before, all this leads to a lack of liquidity in the market and therefore it is possible that we will witness an upward trend Great Bitcoin in the coming period.

Where are you seeing this lack of liquidity? Right now the central banks are still bending over backwards to get people to borrow money, it's just they don't want poor people to borrow money. They're perfectly happy lending to small and big business.

The forums are giving me mixed signals. One thread talking about whales moving old coins out of cold storage and others talking about little bitcoin days being destroyed because nobody wants to sell.

Perhaps due to the current pandemic many people prefer to withdraw their Bitcoin from exchanges, and save in each personal wallet.
This is only natural, considering that in a situation like now money is very valuable, so trading that has a high risk is avoided by some
people. It would be better if we have Bitcoin holding in a personal wallet. Because for now it's safer like that.

I did not say that there is a lack of liquidity now, but I did say that collecting bitcoin by whales and holding by some people will lead to a shortage of bitcoin liquidity in the market. This is my opinion and it does not necessarily happen that completely, there are many things affecting the market.

Not to mention that exchanges have been known to socialise losses whenever there's a bad crash or liquidity wipe -- thereby literally reducing the account balance you have on Bitcoin. Can't recall the exact names but we've had some big names in the space in past few years do this.

They all fear "bank runs" because when it comes to it, I dread to think how many exchanges actually have enough in their wallets to honour every single withdrawal.

According to what you said and if the information is accurate, we can get one important from this information. Decreasing amount of bitcoin on the crypto exchanges means the holder and owners of bitcoin have no interest on selling their bitcoins, at lest not currently and not with this price, they prefer to hold the bitcoin on their wallets for a longer time. This means they are waiting for a higher prices and hopefully this can give us another positive signal for the increasing price of bitcoin in mid and long term.

One data point doesn't even make a correlation, let alone a case of causation.  At least you have a thesis to rely on that can be tested over time, not like some of these chart fundamentalist quacks running around promising they know where btc is going to trade because they drew a line connecting a couple points on a graph. But you'll need far more data than what you've presented before anyone takes this theory seriously.

You have a point regarding your statement. There's possibility that maybe we are looking at one angle only here and not seeing the whole picture of the situation. But then again, sometimes those charts have other meaning and that is for us to discover. But just looking at the exterior part of it, one reason that I am seeing is that crypto users are now starting to realize that storing their funds in exchanges is not safe, whether top or just a new one in the block. So what they are doing is they are sending it to their respective wallets, where they have their own keys and full control.

That really only applies to active positions held on leveraged derivative markets, like futures or perpetual swaps. It can happen because the market depth can be too thin to absorb all the highly leveraged positions.

I guess it could technically happen on spot exchanges that allow leverage, like Bitfinex or Coinbase Pro, but the leverage offered is so low that it's extremely unlikely and historically has never happened. It's impossible on regular spot exchanges that don't offer leverage.


What number would you put on it? How many exchanges are running a fractional reserve? :)

It is only natural that there is a decrease in Bitcoin balance on exchanges, considering that it is not safe to store all the coins on the exchanges.
Especially after there was news that KuCoin was successfully hacked, making investors prefer to store Bitcoin in their personal wallets. Another
reason is that many Bitcoin holders do not intend to sell their Bitcoin in the near future, especially seeing the current Bitcoin price which managed
to rise to $ 12,800. Make investors more optimistic about Bitcoin holding for long-term investment. And the safest way to store Bitcoin in the long
term is of course in a hardware wallet, not storing it on exchanges, which are prone to getting hacked.

There is no option, which is 100% safe. Even storing in a hardware wallet is risky. Because it is susceptible to damage or robbery. Obviously you can recover the coins using the backup seed, but I have seen people messing up with this part. Either they don't take proper backup, or issues get thrown up during the recovery phase. Soring coins in a paper wallet or online wallet is safe enough, if you are careful enough to take proper precautions such as 2FA.

Since there's no way to prove this without real data, I would say, every exchange probably. Even those who supposedly keep 1:1 assets (like, cough, Tether) have never been able to openly prove this beyond closed-door audits. And every exchange that's ever had something close to a bank run (wallet run or whatever) has had troubles. Even if everything is truly cold storage, it shouldn't take more than a day to get things mobilized (let's be magnanimous and account for timezones).

And yes on socialised losses -- has only happened so far to platforms offering leverage but Mt Gox tried to do it too didn't they? And that was an alleged "hack".

In a general sense, any insolvency (whether from a hack, or from a margin lending default as seen on Poloniex, Okcoin, Huobi, etc.) would be expected to bring socialized losses. I guess I was just referring to the "socialise losses whenever there's a bad crash or liquidity wipe" bit, which is more specifically a leverage issue. To put it one more way: if you want to be insulated from crash-related socialized losses, stay away from exchanges that offer leverage!

While this is technically true, going forward, with improved operations from exchanges and above all improved liquidity on the market, the event of the default of a market participant are expected to diminish significatively. Hence reducing the need to "socialise losses" in the first place. At least, this is what I am expecting.

But why not just eliminate this possibility with non-custodial? I'm not saying all these Dexes are the best, but I think if we begin normalising non-custodial solutions for any kind of CEX/DEX (along with simply not allowing for leverage) then we simply leave no room for that decision. Or we just keep allowing users to get burnt until they learn their lessons (not).

I think non custodial DEX's have a long way until they will be able to provide the necessary liquidity and speed of execution of a traditional exchange.
Also I think that, while there is some use case for DEX's, I think a large part of users (the so called "institutional money") simply will neve be able to trade there. ( is ee a very segmented market in the future, amongst Centralised and DEX's).

 

Nevertheless, there is a certain percentage of the likelihood that the volume of Bitcoin is decreasing on exchanges due to the decision of users to store their assets more securely. One way or another, storing cryptocurrency on exchanges is unsafe. But I suppose it is worth paying attention to the fact that according to statistics, there has always been a significant increase in the volume of bitcoin on the exchanges before the fall in prices, as well as in the opposite direction, withdrawing Bitcoin to safer wallets to Hold before a bull run. At least this version gives ground for thought and encourages about the near future.

That's certainly the hope, that liquidity will improve, but at the very least I think Bitcoin's scarcity lends itself to an illiquid ask side on the spot market. That encourages high volatility, which in turn encourages a thinner bid side. Pegged derivatives markets should react accordingly. Of course, regulated markets already react to this sort of thing with circuit breakers.

I also think we're a very long way off from some future where BTC isn't treated as a highly speculative risk asset, and where volatility and liquidity could mirror that of more traditional assets. The exchange and derivatives sector, from a functional point of view, looks extremely similar to 2017. Illiquid as hell.

Correct perhaps they are realized how dangerous storing coins on an exchange
Everybody seems had educated themselves in 2020 as they learned how to store coins properly not by buying and let there.
This is a mix between people has had an improvement security awareness and the bull run prep.
Still not sure but there is no harm to believe people are allin to bitcoin after desperate on the bubble property right?

Well, we never know. As the earlier posts said, we never know what might happen since it is not the same as a traditional market. All I know in this matter is that people actually owns their bitcoins now since they are not holding it in an exchange. Maybe most of them just wants to hold it for a long time and do not want to trade it that quickly. I also don't know how the price will go from this.

Yeah I had same thoughts; with the recent hacks and everything that has been happening, people must have felt that exchanges wouldn’t be a good choice for them to be storing their assets. From the start exchanges has never been a good place to store cryptocurrency assets, if you do and eventually the exchange gets hacked and is unable to pay back for what was lost, you will just lose your assets like that without compensation or whatsoever.

If you have plans to leave them on an exchange then it has to be an exchange that has insurance, that way you’re sure that your money is safe in case of such.

The data supports the idea of price increasing because the moment when the bitcoin balance started to reduce in exchanges, we have started to see a bit of increase in the bitcoin price as well. It is just not that big of a deal, that is the problem. It did had some impact on the price and increased it a bit, but the main thing is bitcoin doesn't increase or decrease depending on just one thing, it does change however depending on multiple things and mainly from people making decisions on the price and reacting to it by buying or selling.

It means this was one portion of the result, but it wasn't the whole 100% of it. So the ones who say it was impactful are right a bit, and the ones who say it had nothing to do with it are right a bit as well, it both had an impact but a little one.

Due to exchanges getting hacked, that may the reason people don't like to keep their bitcoin on exchanges. Recently the hacking of kucoin, may let them think about this.but I'm not satisfied about the graph cause i believe its not showing accurate things. possible that people withdraw their bitcoin from exchange and hodl those on their Blockchain wallet or cold wallet or others bitcoin wallet.so i don't think, need to take this matter seriously after seeing this graph

Part of keeping safe your money through bitcoin is not by keeping it to exchanges. It is natural for a bitcoin holder to withdraw bitcoins from.exchanges to store it in their personal bitcoin wallet for safe keeping. If it happen to be that mostly in most of exchanges that bitcoins users are keeping their bitcoin for holding purposes then high chance that bitcoin will take the bull run. We can be happy with that of course.

Nowadays investors are getting smarter and have learned from the mistakes that happened before. With many exchanges scams
and hacks, of course, investors are looking for a safe place to store Bitcoin. Therefore, if you look at the chart Bitcoin balance on
exchanges must have decreased. Since investors currently only store Bitcoin on exchanges for trading purposes only, Most of the
Bitcoin they own will be stored in they personal wallet.

Hasn't this also pretty regularly happened in cases where exchanges have been hacked or otherwise lost coins? Not due to leverage, but just everyday run of the mill bad cybersecurity or poor management. The risks compound on each other- volatility, leverage, and having a third-party custody your coins. All could lead to loss of value for investors, and amplify losses when caused by any individually. 

I think it is possible to prevent erosion if the market is analyzed well before investing the risk will be much less here. Each investor monitors the exchange sites before the exchange and saves the currency in the wallet to minimize losses. Although there is always a balance after including all types of transactions as the overall exchange balance imbalances are possible in the individual components of the exchange balance such as current account, capital account or a combination of the two an imbalance in the sum of capital accounts can lead to an increase in wealth in a surplus country, while deficit countries become more indebted.

Not sure transferring to their wallet is a good thing cus with less volume there won't be much price movement, but I think the only good reason for people to transfer their bitcoins back to their wallet will be to avoid losing it to unexpected exchange hack, and nothing more.
Agreed, because with less volume there's no way the price of bitcoin can surge ahead, since the value is determined by the market and the traders, so holding bitcoins back will definitely hinder it from growing.

https://i.imgur.com/vMcWXd7.png

Update from January 2021 and balance of Bitcoins on exchanges is still going down and reducing!
This is very good news because around 80% of Bitcoins are illiquid and can't be purchased on exchanges, creating less sell pressure.
It should also be mentioned that liquidity is getting lower as bitcoin is becoming scarcer.

That's a great observation. Probably has something to do with the current bull run too.

Generally, a reduction in the coins on exchanges implies that people are getting out of BTC for speculative motives while moving their holdings to a long term portfolio. That reduces market supply and essentially creates shortage, increasing price in the short run.

Economics 101, essentially. But over the long run price action will still be determined by fundamentals, which is also strengthening right now.

Besides, as you said, people should move away from custodial wallets period, and that includes exchange balances. Use the bitcoin network as it's designed to, dammit.

Increasing demand, via institutionals or even retail, and decreasing scarcity, from the reduced balance on changes, and reduced miners supply have surely contributed to driving the price up.
I just published something here:

This last rally Leg has been also bought by retail? (https://bitcointalk.org/index.php?topic=5307952.msg56053431#msg56053431)

Let me ask you, if it is true that the decline in bitcoin on the exchange from October 2019 - October 2020. then what about November to January, while the trading volume continues to increase day by day? So, who trades large amounts of bitcoin, if deductions are made?

Whenever bitcoin balance on exchanges increasing, it could mean people deposit bitcoin to sell, and a Reducing the number of bitcoins on exchanges simply means that people withdraw their bitcoins for custody to private wallet or cold-storage, which results in less bitcoin to be traded while demand continues to grow to cause the bitcoin price to skyrocket. We know that institutional investors buying bitcoin by over the counter transactions. They are the ones who suck all that bitcoin into their wallet, it is a good thing since less bitcoin to sell on exchanges means less probability to dump it.