Bitcoin Exchange Balances Decline To Three-Year Low Amid Rising Prices
October 27 2021 - 06:00PM
NEWSBTC
Bitcoin exchange balances have been on the decline since the bull
rally began. The volumes were expected to go up once the digital
asset had hit a new all-time high in October. However, this was not
the case. Previous trends have often pointed to exchange balances
seeing an increase in bull markets when investors moved their
holdings to exchanges in order to take profits. This bull market
has defied all expectations for it and continues to do so. Outflows
from exchanges outpace inflows as investors withdraw BTC from
exchanges en masse. Exchange balance volumes relative to the
circulating supply of bitcoin have declined towards three-year
lows. BTC exchange balances now sit at levels not seen since
January 2018. This has led to a supply squeeze on exchanges,
causing sell pressures to drop tremendously. Related Reading
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Promote Adoption Big Exchanges See Declining Balances Big exchanges
like Binance, Coinbase, and Huobi have seen large volumes of
bitcoin withdrawn from their exchanges. Binance recorded the
highest outflows for the last week with 21,000 BTC withdrawn from
the crypto exchange. This is one of the sharpest declines recorded
in the market. BTC exchange balances continue to decline | Source:
Arcane Research Huobi also saw thousands of BTC leave the exchange
in the past week. The past seven days save 8,000 BTC withdrawn from
the cryptocurrency exchange. The outflows from the exchange
culminated in a 9% drop in the volume of bitcoin held on Huobi.
These outflows are no longer surprising given that the market has
continuously followed this trend for the past few months. Growing
scarcity has led to mounting buy pressures as investors scramble to
get their hands on as much of the digital asset as they can.
Exchanges Hold 12.94% Of Bitcoin Supply The share of the total
circulating supply held by exchanges has plummeted in October.
Currently, exchanges hold 2.44 million BTC on their balances. This
translates to 12.94% of the total circulating supply, a new
three-year low. A total of 27,500 BTC left exchanges in the past
week alone. Related Reading | Brace For Impact: Wall Street Is
Headed Straight For Bitcoin, Says Analyst Chart trends show that
the volume held by these exchanges has consistently declined as the
price of bitcoin has grown. Exchange balances had peaked for the
year in June after the market had experienced a crash that put an
end to the bull rally in April. Sell pressures eased in the months
following June, leaving room for further accumulation by investors.
Investors are choosing to leave their assets in cold storage rather
than moving to exchanges to take gains from the market. BTC trading
in the mid-$58K | Source: BTCUSD on TradingView.com Glassnode’s
data shows that Coinbase holds 29% of global exchange reserves.
Despite the sharp decline in its balances, Binance still holds 21%
of global bitcoin exchange reserves. Gemini holds the third-largest
volume with 12% of global reserves. The report however did not
include balances from the crypto exchange, FTX. Featured image from
Bitcoin News, charts from Arcane Research and TradingView.com
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