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Cryptocurrency exchange netflow has changed drastically in the last four weeks as investors suddenly started to withdraw most of their holdings back to their crypto wallets. Such a tendency is usual for the crypto market when a rebound is incoming.
As Santiment's data suggests, Bitcoin saw a massive surge of coins moving off of exchanges yesterday, which was also the largest daily amount of coins withdrawn in the last four months. Investors moved away more than 40,000 BTC.
👌 #Bitcoin saw a massive surge of coins moving off of exchanges yesterday, its largest daily amount (40,572 $BTC) in 4 months. The supply of coins on exchanges is down to 8.48%. As exchange supply decreases, it de-risks chances of a future sell-off. https://t.co/gi4ki39Z6T pic.twitter.com/OKtdS6RUJY
— Santiment (@santimentfeed) October 19, 2022
The aforementioned transaction and the movement of funds in the last few weeks resulted in the supply of coins on exchanges dropping by almost 9%. A negative netflow is usually considered a positive sign for the market as it pushes the chance of an upcoming sell-off on the market down.
However, the low percentage of the existing supply on exchanges is not a necessary condition for a recovery, as it does not attract fresh funds to the market in any way. Unfortunately, the inflow to the cryptocurrency market remains on an extremely low level, especially if we are talking about institutions.
Alex DovbnyaAccording to the most recent CoinShares report, institutional investors have not made any inflows to the market. The only existing movement of funds accounted for shorting ETPs that give investors reverse exposure to Bitcoin.
The lack of new inflows and the movement on the network in general are also projected on the chart of the digital gold. In the last few weeks, Bitcoin has been showing extremely low volatility on the market, with the price moving in the 2% price range. At press time, the first cryptocurrency is trading at $19,152.
Alex Dovbnya
Vladislav Sopov
Dan Burgin