Exchange Entries and Exits Show Investors Haven’t Abandoned Bitcoin

0

Bitcoin is still tethered around the $40,000 angle as the market moves through social and political crises. This hurt the crypto market as it has other financial markets, but the market held up in the face of adversity. Despite falling prices, bitcoin investors are still holding on to their digital assets, as evidenced by exchange inflows/outflows.

Drop in Bitcoin Exchange Deposits

Bitcoin exchange deposits are down. The number of investors depositing their coins on exchanges, presumably to sell them, has been declining lately. That number is down almost 50% since its all-time high in November. FX deposits had reached up to 74,000 BTC entering trade per day. However, that number has fallen to 41% per day since Monday, February 28.

Related Reading | How Analysts Expect Crypto Sports Sponsorship Spend To Hit $5 Billion In Less Than Five Years

While FX deposits have declined, FX withdrawals have followed the opposite path. This number still stands at a high level of 40,000 to 48,000 BTC leaving trades per day in the month of February. This shows that bitcoin investors are still hoarding coins on exchanges. It also reduces the supply of BTC on exchanges every day, leading to greater scarcity on exchanges.

BTC revived supply remains low | Source: Glassnode

Data from glass knot shows that this trend is not just beginning. Since July, the 30-day EMA of net exchange flows has shown that more investors have preferred to withdraw their coins instead of moving them to exchanges. Even though the number of withdrawals has decreased, it still exceeds the number of bitcoins moved to exchanges, showing that demand is still greater than supply.

Flows remain low despite the recovery

Bitcoin had touched monthly lows in February, but even that did not see FX inflows rise. These influx figures remained on a steady downward trend with only minor influxes recorded amid major headwinds.

From May to June 2021, bitcoin inflows had increased, which represented a loss of confidence from investors. However, the digital asset had since fallen and had not recovered to that level. This indicates a major return of confidence for investors. Not only that, but it also shows that bitcoin investors are back on an accumulation trend, choosing to hold for the long term instead of making short-term gains.

Related Reading | BitConnect founder accused of orchestrating $2.4 billion fraud

TradingView.com Bitcoin Price Chart

BTC on verge of another bull | Source: BTCUSD on TradingView.com

The rekindled supply measure from BTC also indicates renewed confidence in the digital asset from investors. Usually, when conviction is down, this metric sees a very big uptick. However, the recorded volume showed almost no difference from previous days.

Bitcoin exchange deposits

BTC exchange deposits down | Source: Glassnode

The normal long-term capitulation typical of early bear markets has yet to register. This indicates that investors are not ready to sell their coins. Although, that could mean there are more dips ahead before the market officially welcomes another bearish stretch.

Featured image from MARCA, charts from Glassnode and TradingView.com


Source link

Share.

Comments are closed.