Arcane Research, a cryptocurrency analysis firm, notes that bitcoin holders have been pulling their BTC off exchanges hysterically in a newly released report. This implies less interest among investors to trade or hold the crypto asset on centralized exchanges.
Record Bitcoin Exchange Outflows
Arcane Research took to Twitter to share the negative bitcoin outflows they have observed since the beginning of this year.
Data from the analytics firm shows that holders have been moving their BTC stashes from exchanges to wallets “like never before”. For context, 119,000 BTC left exchanges in June. In July, users moved 96,000 BTC off of exchanges, and in August, 65,000 BTC has been withdrawn.
Holders usually assume direct custody of coins when anticipating a renewed rally. A continued exodus of crypto from exchanges typically results in a significant reduction in the selling pressure and sets the stage for a strong price rebound. But in this case, Arcane Research believes the collapse of prominent lenders like Celsius, Babel Finance, Voyager Digital, and Vauld likely contributed to the net outflows.
The analytics firm noted that issues with these troubled lenders soiled their reputation among users, further suggesting that they might also be losing trust in centralized crypto exchanges.
It’s worth mentioning that the highest exchange withdrawal of BTC before the summer amounted to 71,000 coins.
Data from Glassnode, an on-chain data provider, corroborates Arcane Research’s analysis. It estimates that the balance of bitcoin on crypto exchanges has hit a four-year low of 2,342,202.837. The drop in the BTC balance on exchanges concurs with the exchange flow.
What Comes Next?
The latest outflow of bitcoin from centralized exchanges paints a bullish picture as it implies BTC traders have no intention of liquidating their coins on the exchanges.
However, investors should be cautious as its still unclear whether the outflows will be sustained.
Bitcoin has been stasis for months as prevailing macroeconomic concerns keep rallies in check. At press time, the world’s largest cryptocurrency by market value is trading hands at $21,363.20, representing a 2.13% drop on the day.