Anika Begay
The price of Bitcoin, and the market in general, started the week with one of the biggest drops ever seen in 2024. While this general market decline has caused widespread fear and panic among cryptocurrency enthusiasts, it seems that many investors have taken the opportunity to accumulate more digital assets at low prices.
According to the latest on-chain data, significant amounts of Bitcoin have left cryptocurrency exchanges. The question here is: what does this mean and how does it affect the price of BTC?
Do investors say the bull run will continue?
According to recent data from IntoTheBlock, more than 28,000 BTC (worth over $1.7 billion) were transferred off cryptocurrency exchanges last week. This on-chain revelation is based on changes in the Netflows metric, which tracks the amount of a particular cryptocurrency being sent in and out of centralized exchanges.
An increase in Netflows (or when it is positive) indicates that more funds are entering than leaving cryptocurrency exchanges. On the other hand, when the value of the metric drops below, it implies that more cryptocurrency assets are leaving than entering trading platforms.
Source: IntoTheBlock
As shown in the chart above, the Netflows metric for Bitcoin has been declining in recent days, implying that large investors have been moving their assets away from centralized exchanges. According to IntoTheBlock, the $1.7 billion in BTC withdrawn in the last seven-day period represents the largest outflow seen in this time frame so far in 2024.
While it’s difficult to pin down the logic behind this massive exodus, crypto moves of this magnitude away from centralized exchanges typically indicate a shift in investor sentiment. It suggests a shift in holding strategy or even new accumulation by large investors, demonstrating their confidence in Bitcoin’s long-term promise.
Additionally, the decline in the supply of the leading cryptocurrency on trading platforms could cause a supply crisis. Ultimately, this fall in BTC’s exchange supply could trigger a surge in the price of Bitcoin.
Bitcoin Price at a Glance
After a sharp drop from above $64,000 to $48,000 on Monday, August 5, the price of Bitcoin has shown great resilience over the past week, climbing back above the $62,000 level.
At the time of writing, the leading cryptocurrency is trading around $60,400, reflecting a 1% price decline over the past 24 hours. Meanwhile, CoinGecko data shows BTC is still down over 3% this week.
The price of Bitcoin hovering around the $60,000 mark on the daily timeframe | Source: BTCUSDT chart on TradingView
Featured image from iStock, chart from TradingView
