The amount of Bitcoin stored on exchanges is ‘continuously plummeting’, according to a new report from CoinTelegraph.
Indeed, since Crypto’s ‘Black Friday’ in March, when the price of Bitcoin swiftly fell from over $9,000 to nearly $4,000, data from Glassnode shows that the amount of Bitcoin that traders are storing in cryptocurrency exchange accounts has fallen to the tune of $2.85 billion (from 2,950,000 BTC to 2,700,000 BTC.)
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What is causing the decline? Analysts say that there are several factors at play: firstly, decreased trust in cryptocurrency exchanges, after all, this month has seen both the indictment of the four BitMEX co-founders as well as the arrest of OKEx founder Star Xu.
More importantly, the decrease in the amount of BTC on exchanges could be indicative of a decline in the number of BTC holders that are willing to sell their coins.
“Bitcoin Accumulation Has Been on a Constant Upwards Trend for Months.”
Indeed, Glassnode said a large part of the Bitcoin supply is stored in so-called ‘accumulation addresses’, which are digital wallets that BTC has been moved into and never out of: “Bitcoin accumulation has been on a constant upwards trend for months. 2.6M $BTC (14% of supply) are currently held in accumulation addresses. Accumulation addresses are defined as addresses that have at least 2 incoming txs and have never spent BTC.”
Crypto Twitter commentator @Oddgems also wrote on Saturday that “more and more #Bitcoin getting out from exchanges and most probably being transferred to non-custodial wallets. This suggests slightly lower liquidity and lower selling pressure going forward.”
More and more #Bitcoin getting out from exchanges and most probably being transferred to non-custodial wallets.
This suggests slightly lower liquidity and lower selling pressure going forward.
Source @glassnode pic.twitter.com/tBTRWV7yY6
— Oddgems ( ) ️ (@oddgems) October 17, 2020
Historically speaking, periods of low volatility tend to precede substantial price movements. Earlier this year, David Waslen, co-founder and chief executive of HedgeTrade, told Finance Magnates that “generally speaking, a drawn-out period of low-volatility price consolidation will lead to a huge move on either side.”
“The longer the consolidation persists, the more violent the breakout or breakdown will end up being,” he explained.
