Investors are moving their BTC away from exchanges, what does this mean?

Bitcoin (BTC) is consolidating between $94,000 and $92,000, but investors are pulling their assets out of exchanges. The asset has plummeted in the past two weeks and was sitting around $93,750 at the time of writing.

Analysis by CryptoQuant official AxelAdlerJr revealed that crypto exchanges are seeing very low levels of BTC deposits as investors move assets away from the platforms, possibly into their personal wallets. AxelAdlerJr said that these trends suggest that BTC could see robust price movements in the near term.

Lowest daily BTC deposits

According to AxelAdlerJr, crypto exchanges have witnessed around 30,000 BTC daily deposits in recent weeks, similar to the all-time lows seen in 2016. In contrast, the 10-year average daily deposits are around 90,000 BTC, and the highest this cycle bullish stands at 125,000 BTC. , especially when the asset reaches the bullish mark of $66,000.

The last time bitcoin’s daily deposit numbers were this low was during the start of its big recovery.

“When users send less coins to trading platforms, it usually suggests that they prefer to keep their BTC in personal wallets instead of preparing to sell,” said AxelAdlerJr.

A decrease in deposits on exchanges could lead to a shortage of BTC in the spot market, leading to positive price movements, according to the laws of supply and demand. While low deposits do not guarantee a rapid price increase for BTC, they could create an environment that would trigger positive momentum.

Traders move BTC from exchanges

In addition to the drop in daily BTC deposits on exchanges, traders are moving their bitcoins away from these trading platforms. AxelAdlerJr cited the Netflow-to-Reserve Ratio, a metric that tracks the ratio of net inflows and outflows to stock markets and their total reserves.

When the Netflow-to-Reserve ratio turns negative, it indicates a dominance of the exchanges’ outflows, which means that BTC is being withdrawn. While the metric is currently negative, the CryptoQuant official noted that the sharpest negative values ​​were seen at the end of the bear market when traders bought BTC from forced sellers at around $17,000.

“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. In together, these signals set the stage for potentially more robust price moves going forward,” added AxelAdlerJr.

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