On June 8, 27,000 more Bitcoin Profit were withdrawn from the exchanges where they were deposited. The last time there was such a significant outflow, Bitcoin appreciated by 88%.
The trend of users withdrawing their assets from centralized exchanges has gained momentum since Black Thursday. However, the amount of Bitcoin they removed yesterday is outstanding even in the context of this trend: a value of USD 265 million.
BTC deposits on the exchanges reached their lowest point since 2016
Hodling logic explained
On March 19, users withdrew 31,000 BTCs (USD 198 million), and then on March 24, another 27,000 BTCs (USD 180 million). Bitcoin’s price on 18 March was USD 5.238. By 7 May, it had shot up to USD 9.892.
What could be the correlation or even causality between users withdrawing funds from exchanges and the BTC price? If a user hopes to sell his Bitcoin in the near future, he will keep it on an exchange.
3 reasons why the Bitcoin price could be on the verge of a new upward trend
$18,000 by August?
On the contrary, if the same user expects an appreciation in prices, they are more likely to withdraw their funds to a non-custodial wallet for better long-term custody. As more Bitcoin leaves the supply in the short term, the price tends to appreciate, as long as demand remains the same.
However, in the markets, there is always more than one factor affecting the price.
Bitcoin 7-Day Average Exchange Net Flows
Bloomberg: „Bitcoin will approach the record figure of about $20,000 this year.
Analyzing the seven-day average for the same metric since Black Thursday, it barely reached its peak above the waterline. This would indicate a long term hodling sentiment by cryptomoney investors.
If we were to experience the same appreciation as last time, then the price of Bitcoin would reach USD 18,000 by the end of July. This would be in line with Bloomberg’s recent predictions.