Bitcoin Exchange Outflows Accelerate Despite Short-Term Price Weakness

Bitcoin continues to see its supply moving away from exchanges, reported blockchain analytics platform Santiment on Monday.

Over the past year, a net total of 403,200 BTC has moved off centralized trading platforms, representing a 2.1% reduction in the entire supply held on exchanges, according to the report.

In general, this is a positive long-term sign, according to Santiment.

Exchange Outflows Are Bullish

Investors usually take coins off exchanges to hodl or custody, which is bullish. They send them to exchanges in preparation for selling, which is bearish.

Around 14.7% of the total Bitcoin supply is currently held on exchanges, according to Glassnode. This has been in decline since mid-2022, when almost 18% was held on exchanges.

The figures for Ethereum are even more favorable, with just 8.7% of the supply held on exchanges and a steady decline from over 30% in 2020 as ETH is staked, custodied, and scooped up by treasury companies.

Back to Bitcoin, analysts believe that the bottom is strengthening, which could lead to a rebound. The OBV (On-Balance Volume) chart is a lot cleaner than the price, said analyst Sykodelic on Tuesday.

Meanwhile, fellow analyst “Daan” said Bitcoin was “stalling while its bull market support band is closing in.”

Analyst “Colin” was also bearish, identifying a bear flag continuation pattern, “which means a move down would be the expected outcome.”

If such a move down did occur, $74,000 to $77,000 would be the likeliest bottom, he said.

Short-term Pain Remains

It appears that Colin may have been onto something, as Bitcoin had lost the $90,000 level again at the time of writing.

The asset had lost 1.4% on the day and was trading at $89,862, but remained within its weekly range-bound channel.

Bitcoin has struggled to break through resistance at $92,000. It appears that this week’s Federal Reserve rate cut is already priced in, so it is unlikely to get a boost from that, and down appears to be the path of least resistance.

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