Bitcoin (BTC) exchanges lost 100,000 BTC during the weekend’s price crash, data shows — and that’s a bullish sign.
Figures from on-chain monitoring resource CryptoQuant on Aug. 5 tracking exchange balances show a dramatic drop occurring just after BTC/USD shed $1,200 in minutes.
BTC exchange reserves hit major lows
Prior to the turbulent weekend’s trading, Bitcoin balances on exchanges totalled approximately 2.49 million BTC ($29.2 billion). Afterwards, the ledger fell to 2.39 million BTC ($28 billion) — the lowest ever recorded by CryptoQuant.
According to popular analyst Cole Garner, the change is yet another hint that the overall mood among investors is extremely optimistic.
“The amount of #Bitcoin held on exchanges just dropped off a cliff,” he wrote on Twitter on Thursday.
“It happened two days ago – whales bought up the selloff. $BTC flowing out of exchanges is *bullish*”
As Cointelegraph reported, decreasing numbers of coins held on exchanges suggests that investors plan to hold BTC, not sell or trade it at short notice. Garner agrees.
“The only reason to take them off exchange is because you intend to not sell them anytime soon,” he added.
Bitcoin exchange reserves 2-week chart. Source: CryptoQuant
Binance may need fewer hot wallets
Whales — those holding conspicuously large amounts of Bitcoin — seemed to have anticipated the pullback far earlier, as coins made their way back to exchanges a week earlier.
Commenting on the trend, CryptoQuant offered an alternative but no less bullish explanation involving major exchange Binance.
“68101 BTC transferred from Binance to a newly created wallet, and not clear whether it’s their new cold wallet or the 3rd party custody,” the firm responded to Garner.
“Even if it’s Binance’s, it could be a bull signal since Binance decided to reduce the portion of hot wallets in charge of user withdrawals.”
BTC/USD was heading towards $11,800 at press time, as the remnants of the crash dissipated and $12,000 became a target once again.
Earlier this week, Cointelegraph Markets analyst Michaël van de Poppe suggested that the next correction may be the final opportunity to buy BTC at a discount.
Published at Thu, 06 Aug 2020 10:19:00 +0000