The price of Bitcoin — and the market as a whole — started the week with one of the biggest declines ever recorded in 2024. While this broad market decline has caused widespread fear and panic among cryptocurrency enthusiasts, it appears that many investors have seized the opportunity to accumulate more of the digital asset at low prices.
According to the latest on-chain data, significant amounts of Bitcoin have left cryptocurrency exchanges. The question is — what does this mean and how does it affect the price of BTC?
Do investors believe the bull market will continue?
According to the last data from IntoTheBlockover 28,000 BTC (worth over $1.7 billion) have been transferred from cryptocurrency exchanges over the past week. This on-chain discovery is based on changes to the Netflows metric, which tracks the amount of a specific cryptocurrency being transferred to and from central exchanges.
An raise in Netflows (or when it is positive) signals that more funds are flowing into cryptocurrency exchanges than out. On the other hand, when the metric falls below, it means that more crypto assets are flowing out of trading platforms than are flowing into them.
Source: IntoTheBlock
As shown in the chart above, Bitcoin’s Netflows rate has been degenerating over the past few days, indicating that vast investors are moving their assets away from centralized exchanges. According to IntoTheBlock, the $1.7 billion in BTC withdrawn over the past seven days is the largest outflow recorded during this period so far in 2024.
While it’s demanding to pinpoint the rationale behind this mass exodus, cryptocurrency movements of this size from centralized exchanges typically indicate a shift in investor sentiment. This suggests a shift in holding strategies or even fresh accumulation by vast investors, showing their belief in Bitcoin’s long-term promise.
Moreover, the decrease in the availability of the main cryptocurrency on trading platforms may result in a shortage of supply. Ultimately, this decrease in the BTC exchange reserve may trigger an raise in the price of Bitcoin.
Bitcoin price in brief
After plummeting from over $64,000 to $48,000 on Monday, August 5, the price of Bitcoin has shown great resilience over the past week and has managed to return above the $62,000 level.
At the time of writing, the leading cryptocurrency is trading around $60,400, reflecting a 1% price decline over the past 24 hours. Meanwhile, data from CoinGecko shows that BTC is still down over 3% this week.
The price of Bitcoin hovering around the $60,000 mark on the daily timeframe | Source: BTCUSDT chart on TradingView
Featured image from iStock, chart from TradingView
