In a recent report, the cryptocurrency analysis firm Arcane Research notes that bitcoin holders have been frantically withdrawing their BTC from exchanges. This suggests that investors are less inclined to trade or hold crypto assets on centralized exchanges.
Record Bitcoin Exchange Cash Withdrawals
Since the beginning of this year, Arcane Research has observed negative bitcoin outflows, which they shared on Twitter.
The analytics firm’s data indicates that BTC holders have been moving their holdings from exchanges to wallets “like never before.” In June, 119,000 BTC were removed from exchanges. In July, users withdrew 96,000 BTC from exchanges, and in August, they withdrew 65,000 BTC.
In anticipation of a renewed rally, holders typically assume direct possession of coins. Typically, a continued exodus of cryptocurrency from exchanges results in a significant reduction in selling pressure and paves the way for a strong price rebound. In this instance, however, Arcane Research believes that the failure of notable lenders such as Celsius, Babel Finance, Voyager Digital, and Vauld contributed to the net outflows.
The analytics firm observed that problems with these troubled lenders tarnished their reputation among users, indicating that they may also be losing faith in centralized cryptocurrency exchanges.
Before the summer, the largest BTC withdrawal from an exchange amounted to 71 thousand coins.
Glassnode data, an on-chain data provider, confirms Arcane Research’s findings. It is estimated that the bitcoin balance on cryptocurrency exchanges has reached a four-year low of 2,342,202.837. The decrease in BTC balances on exchanges corresponds with the exchange volume.
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What Is Up Next?
The most recent outflow of bitcoin from centralized exchanges suggests that BTC traders have no intention of selling their coins on the exchanges, which is bullish.
However, investors should proceed with caution as it remains uncertain whether the outflows will continue.
Bitcoin has been in a state of stagnation for months due to prevailing macroeconomic concerns that prevent rallies. At press time, the largest cryptocurrency by market capitalization is trading at $21,363.20, representing a daily decrease of 2.13%.