Bitcoin on exchanges hit 4 year low - Glassnode

[_act_]

According to Glassnode, bitcoin on exchanges continues its macro decline with exchange outflow.

Bitcoin balance on exchanges continues its macro decline, reaching 12.6% of the Circulating Supply (2.4M $BTC).

Exchange balances have now seen a macro outflow of over 4.6% of the circulating supply since the March 2020 ATH.

This only means that bitcoin holders are not selling and this can lead to increase in bitcoin price. The increase may not be that significant to get bitcoin to all-time-high but an opportunity for people to hold at low price and make passive income.

[cryptomaniac_xxx]

Yes, it could be an indication that bitcoiners are slowly accumulating in their own wallet and maybe not doing that much trade as well. Obviously, they are buying in exchanges, but maybe they will immediately withdraw it to a wallet that they have total control of, have the private keys and mnemonic phrase as they don't want to take the risk on putting it in an exchange wherein it could be hack or they bitcoin might be confiscated by exchanges without warning.

[mk4]

Data like these can easily mislead people. Yes, it can definitely mean that people aren't planning on selling(at least yet) which is somewhat a good sign, but let's not forget that while a lot of people withdrew their coins, they can just as easily deposit it back on whatever exchange at any time they want.

[bbc.reporter]

Data like these can easily mislead people. Yes, it can definitely mean that people aren't planning on selling(at least yet) which is somewhat a good sign, but let's not forget that while a lot of people withdrew their coins, they can just as easily deposit it back on whatever exchange at any time they want.

Agreed. A whale sending in and sending out his millions worth of bitcoin would cost him only under $50. Also, it should also be known where those coins were sent and held. Were they sent to a personal wallet? Were they sent to a cryptolending platform similar to Voyager, Celsius, Babylon Finance?

The market will also not pump by itself. Leverage was much of the central cause on why bitcoin pumped from $3k to $60k. I mentioned before that if we do not know how mucn leverage was used to pump the market, we should be careful in thinking that all time high was caused by adoption because it was not.

I also asked where the coins were sent and held because of this news.



Babel Finance, the troubled Asian crypto lender that abruptly halted client withdrawals last month, suffered heavy losses due to proprietary trading with customer funds, according to its restructuring proposal deck obtained by The Block.

The deck, dated July 2022, reveals that Babel Finance lost more than $280 million in bitcoin (BTC) and ether (ETH) due to its proprietary trading failure. Specifically, it lost around 8,000 BTC and 56,000 ETH in June after facing liquidation due to a significant market downturn.

Source https://www.theblock.co/post/160230/babel-finance-crypto-lost-280-million-proprietary-trading-restructuring

[mk4]

*snip*

The funds doesn't even necessarily need to be deposited to lending platforms.

Don't get me wrong, things like this may be bullish, but people get overly bullish by this statistic as if the withdrawn bitcoin is locked or something.

[btc_angela]

Yeah, we've seen numbers from Glassnode a lot but it doesn't mean that we can interpret it as somewhat bullish or not. Maybe it could be true, nevertheless it can be seen differently. Just like what mentioned, whales moving out, and then later depositing it to other exchanges.

So I wouldn't put too much emphasize on it, or any other numbers that Glassnode has been releasing as of late. Be it bullish or not, we will how it does in the long run.

[AbuBhakar]

According to Glassnode, bitcoin on exchanges continues its macro decline with exchange outflow.

Bitcoin balance on exchanges continues its macro decline, reaching 12.6% of the Circulating Supply (2.4M $BTC).

Exchange balances have now seen a macro outflow of over 4.6% of the circulating supply since the March 2020 ATH.

This only means that bitcoin holders are not selling and this can lead to increase in bitcoin price. The increase may not be that significant to get bitcoin to all-time-high but an opportunity for people to hold at low price and make passive income.

Or there is a possibility the traders are now being cautious on leaving balance in exchange after the multiple report of account freeze without any reason and celsius disabling the withdrawal function for all its customer. We are currently on bear market while the trading volume on exchange is not decreasing which will be the case if Bitcoin traders is just holding right now.

[hugeblack]

I don't know whether I misunderstood the data that comes from Glassnode or are they deceptively displaying their data, in general if you rely on these data as investment advice, then most likely you will lose your money as they did during the previous two years.
Relying on the volumes of liquidity on the platforms is misleading and cannot be considered an indicator of price direction since most real changes come from off-traded markets (OTC) and then retailers make things worse (event amplification)

[dragonvslinux]

In order to be the contrarian here.

According to Glassnode, bitcoin on exchanges continues its macro decline with exchange outflow.
[...]
This only means that bitcoin holders are not selling and this can lead to increase in bitcoin price.

I'm not convinced this is specifically the case. This only means that less users are holding their coins on exchanges, not directly that they are less likely to sell them. 6 months ago I used to believe this theory, but in that time exchange supply has decreased along with price. This therefore only means that less Bitcoiners are holding coins on exchanges these days, not much else, probably as overall they are getting a bit smarter.

The increase may not be that significant to get bitcoin to all-time-high but an opportunity for people to hold at low price and make passive income.

I think the overall result will be slightly less selling when a relief rally / trend reversal begins, as more coins off exchanges means they are less likely to be sold (even if the last 6 months has sort of disproven this theory). But clearly the idea that more holders are holding for the long-term is yet to be proven, until we see how much supply is re-introduced (increased into exchanges) when prices bounce back.

Baring in mind the number of exchanges/services/platforms that have been hacked over the years, become insolvent, etc, etc, means users are finally holding more coins themselves, rather than relying on third party services. This doesn't mean they won't immediately send these coins back to these exchanges and services when price increases however. As I said, time will tell.

[Lucius]

Bitcoin balance on exchanges continues its macro decline, reaching 12.6% of the Circulating Supply (2.4M $BTC).

Whether the data is correct or not, it seems to me at this point that at any given time we have at least a few million BTC available for sale if we take all the CEXs that exist and are somewhat relevant. Maybe someone will disagree, but such a quantity available for sale has a great influence on the price regardless of the max supply, if we add to the fact that a little less than 2 million BTC is available for mining and about 1.7 million BTC will enter circulation in less than 10 years then we can conclude that the supply is still much higher than the demand.

[jaberwock]

This only means that bitcoin holders are not selling and this can lead to increase in bitcoin price. The increase may not be that significant to get bitcoin to all-time-high but an opportunity for people to hold at low price and make passive income.

Other than the hodlers who are not selling. There's also a possibility that they are buying more on the exchanges and that's the cause of the decline in btc supply. I think this was mostly a good news and not a bad news just because the supply of btc in exchanges is declining, as the price can skyrocket anytime soon.

In the event that a lot of people are going to sell, the stock of btc in the exchanges are going to be refilled again so there is no need to worry. People are always going to do that as it doesn't make sense to just hold and buy btc for nothing or only because they do it for display purposes. If that is what they want then they better go on those nft's.

[wagmi]

It's amazing to see after Bitcoin's crash how right now, available Bitcoin supply up for sale is extremely low again.
What can we read out of it?
Available Bitcoin supply up for sale on exchanges will be immediately bought because demand for Bitcoin is very high.
When mot much Bitcoin is available on exchanges, prices can go up very quickly.

It's not unrealistic to see a big price increase, soon.

wagmi
 

[OgNasty]

This isn't at all surprising given what we've just seen from Celsius and others throughout this crash.  Nobody wants their coins locked up for a decade, trust me.  I'm still trying to get my mtgox funds back.  That has to be a big driver behind this movement away from exchanges.  I'm sure once the market settles down and retail adoption starts picking up again, we'll see a reversal of this trend.  I still don't think the average person wants to hold their funds in a wallet of their own control.  Although that is probably the best way to take coins off the market...  I've heard so many stories from newbie friends getting funds lost in cyberspace.  Especially when it comes to ETH and trying to figure out cross chain swaps...

[hatshepsut93]

During 2021 bull market analysts were also saying that coins leaving exchanges is a bullish sign and that means Bitcoin is on track to $100,000 or $300,000. And yet Bitcoin crashed. So it seems that the correlation between coins held on exchanges and the price is not so strong and clear.

You could also theorize that if there's less coins on exchanges, it means there's less trading volume, and smaller trading volume means larger price instability - meaning faster and sharper crashes are possible.

[Baofeng]

Yep, it's obvious that when there are less bitcoin in an exchange, the holders are not going to sell it. However, it doesn't translate that we will have a bull run since everyone is just holding. And we are in a bear market after all, no movement for all of us, we can see it as well in the trading volume. Or maybe I'm just old school, but as a practice, to really appreciate bitcoin, you must know how to do self-custody, learn how private key works, in short you will appreciate it more if you have it in your own wallet.

[STT]

On exchange supply probably would relate to liquidity in a trading basis because prices will move if there is a gap in volume to alter the supply vs demand nature of the order book.   Whether the price sticks or not is another matter, as said people can easily just jump on a price if they think its overly attractive and dump their wallet contents to pay the bills etc.

[adaseb]

This is not a good indicator. It has been falling for a very long time and if you actually took trading advise by looking at this metric you would be severely underwater.

I mentioned this many times before. The higher that Bitcoin goes the less people will keep on an exchange. Back in 2012 when it was like $50 a coin, people held maybe 50-100 because the value wasn’t that much. Now it’s completely different. Even 1 coin is too much to lose so people withdraw it to their cold storage. 

[Poker Player]

Data like these can easily mislead people. Yes, it can definitely mean that people aren't planning on selling(at least yet) which is somewhat a good sign, but let's not forget that while a lot of people withdrew their coins, they can just as easily deposit it back on whatever exchange at any time they want.

Precisely in another thread I was saying the same thing. In the last year I have seen the same news, that Bitcoin keeps leaving the exchanges, repeatedly just before drops in price. Therefore, I doubt very much that it can be considered a bullish indicator.

News from April 4, when the price was around $42k:

Bitcoin Continues To Flow Out Of Exchanges.

This one from January 28:

Bitcoin Worth $670M Leaves Centralized Exchanges After Hawkish Fed Comments.

These were the first couple of news items I found, but I'm sure we can find more.

As a joke we could say that this is a contrarian indicator.

[Fara Chan]

To secure a security system in an exchange is more difficult than securing it in a wallet, because the wallet has a private key and phrase that we can control, although it is also not so secure it is not safe, because there is also someone's wallet that can be hacked.

It's just that purchases are required on the exchange, so investors can temporarily move bitcoins to their respective wallets, to avoid the risks that will occur, at least until this chaos begins to end and can be said to be safe for the future.