On-chain analytics provider Glassnode has reported that bitcoin exchange flows will regain dominance of outflows by August as investors pull the digital asset back.
It added that the market had gone through a number of phases of dominance of foreign exchange flows over the past year. The previous dominance of outflows was last seen in late 2020, just before BTC surged above its all-time high of $ 20,000.
# Bitcoin exchange flows have returned to outflow dominance by August as investors withdraw $ BTC.
The market has gone through a number of phases of dominance of foreign exchange flows over the past year, with the dominance of outflows last seen in late 2020. pic.twitter.com/BQLlw06SJr
– glassnode (@glassnode) August 19, 2021
BTC and ETH Exchange Exodus
At the end of July, more than 465,000 BTC left the exchanges, as reported by CryptoPotato. At the time, Glassnode reported that its wallet balances had dropped to their lowest level since the deep crypto winter in late 2018.
When bitcoin leaves centralized crypto exchanges, it is usually viewed as a bullish sign. The assets can be moved to custody or cold wallets or tokenized and invested in DeFi. Conversely, with large inflows on the exchanges, this is considered bearish as investors may begin to prepare for liquidation.
Data analyst Will Clemente commented that the past month saw one of the largest declines in Bitcoin exchanges in history.
“Exchanges have fallen 111,033 BTC in the past 30 days. One of the sharpest declines in stock market stocks in Bitcoin history. “
Glassnode also noted that the same thing happens with Ethereum. The total ETH held on the foreign exchange balance has hit an all-time low, while the ETH 2.0 staking has reached new highs, it said.
The analysis provider stated that the recent rise in ETH price was supported by a continued outflow of ETH supply on the exchanges. Ethereum’s trading balances hit an all-time low of 13% of circulating supply this week, equivalent to 15.3 million ETH.
It added that a large chunk, roughly 5.7% of the total Ethereum supply, has found its way into the Beacon Chain deposit agreement. The ETH 2.0 staking contract has now locked almost 7 million ETH, or around $ 21 billion.
Bitcoin price outlook
BTC prices fell again today and have fallen another 2.5% in the past 24 hours. Bitcoin was trading at $ 44,224 at the time of writing, according to CoinGecko. The asset is now down 3.2% since the same time last week as the correction deepens.
To continue the uptrend, Bitcoin will need to break resistance at its previous high of $ 47,850 on August 16. The long-term outlook is still optimistic, at least according to the infamous stock-to-flow model.
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