Bitcoin’s withdrawal from exchanges suggests that selling pressure is abating, creating a positive foundation for long-term price gains.
In recent weeks, Bitcoin has continued to exit exchanges, indicating that selling pressure may be weakening. According to data from on-chain data platform CryptoQuant, the amount of Bitcoin sent to exchanges has recently dropped to 30,000 per day. This was recorded as the lowest inflow level since 2016. For comparison, while the average daily Bitcoin inflow of the last 10 years was around 90,000, the highest inflow level in this cycle was recorded at 125,000 BTC when Bitcoin reached $66,000. The fact that users are not sending their Bitcoin to exchanges generally indicates that they prefer to keep these assets in personal wallets and not sell. This suggests that a possible selling pressure is decreasing.
The Netflow-to-Reserve Ratio is a metric that measures the ratio of net inflows and outflows to total reserves. When this ratio is negative, it indicates that net outflows from exchanges are increasing and Bitcoin is being withdrawn from exchanges. The most pronounced negative values coincide with the end of bear markets and were seen during periods when investors made heavy purchases at $17,000 levels.
This decrease in the amount of Bitcoin withdrawn from exchanges indicates that investors are holding back their BTC for long-term savings rather than selling. This trend can create a lack of liquidity in the markets and create a more solid basis for price movement. In the long term, Bitcoin’s withdrawal from exchanges could be a sign of positive price movements.