Over the past few weeks, the market has seen an extremely low inflow of Bitcoin to exchanges—around 30,000 daily deposits, comparable to the record lows of 2016. By contrast, the 10-year average sits at about 90,000, while this cycle’s peak of 125,000 daily deposits was recorded when BTC hit the “bullish” mark of $66,000.
When users send fewer coins to trading platforms, it typically suggests they prefer to keep their BTC in personal wallets rather than gearing up to sell. The last time deposit figures were this low was at the very start of Bitcoin’s major rally. Although this doesn’t guarantee a swift price upswing, it does point to a potential shortage of Bitcoin on the spot market.
Netflow-to-Reserve Ratio
This metric indicates the relationship between net inflows/outflows to exchanges and their total reserves. Negative readings highlight a dominance of outflows-meaning Bitcoin is leaving exchanges. The most pronounced negative values occurred at the end of the bear market, when “savvy” players actively bought coins from forced sellers at around $17K.
Conclusion
The drop in daily deposits to exchanges to a level not seen since 2016 suggests a large-scale trend of holding Bitcoin in personal wallets, while the Netflow-to-Reserve Ratio confirms a continued outflow of coins. Taken together, these signals set the stage for potentially more robust price movements in the future.
Written by AxelAdlerJr
