Investors are taking Bitcoin from crypto exchanges “like never before”. A reason to cheer? ⋆ ZyCrypto

Arcane Research, a cryptocurrency research firm, notes that bitcoin holders have been hysterically withdrawing their BTC from exchanges in a recently released report. This implies less interest among investors in trading or holding crypto-assets on centralized exchanges.

Record Bitcoin Exchange Outflows

Arcane Research took to Twitter to share the negative bitcoin outflows they have observed since the beginning of this year.

Data from the research firm shows that holders have moved their BTC holdings from exchanges to wallets “like never before”. For context, 119,000 BTC left exchanges in June. In July, users moved 96,000 BTC out of exchanges, and in August, 65,000 BTC were withdrawn.

Holders usually assume outright custody of coins when they anticipate a renewed rally. A continued exodus of crypto from exchanges typically results in a significant reduction in selling pressure and lays the foundation for a strong price reversal. But in this case, Arcane Research believes the collapse of prominent lenders such as Celsius, Babel Finance, Voyager Digital and Vauld likely contributed to the net outflow.

The research firm noted that problems with these troubled lenders tarnished their reputation among users, further suggesting that they may also lose confidence in centralized crypto exchanges.

It is worth mentioning that the highest exchange withdrawal of BTC before the summer was 71,000 coins.

Data from Glassnode, a chain supplier of data, confirms Arcane Research’s analysis. It estimates that the balance of bitcoin on crypto exchanges has reached a four-year low of 2,342,202,837. The drop in BTC balance on exchanges is consistent with the exchange flow.

What comes next?

The recent outflow of bitcoin from centralized exchanges paints a bullish picture as it suggests that BTC traders have no intention of liquidating their coins on the exchanges.

Investors should be cautious, however, as it remains unclear whether the outflow will be sustained.

Bitcoin has been stagnant for months as prevailing macroeconomic concerns keep rallies at bay. At press time, the world’s largest cryptocurrency by market capitalization is trading at $21,363.20, representing a 2.13% drop on the day.