Bitcoin is currently in a downtrend and could be at risk of losing its $40,000 position. Major market sell-offs are believed to have caused this downtrend. This is however not true, as exchange metrics prove. The decline in exchange balances over the last year points to massive accumulation trends. This has reached a peak after Bitcoin’s exchange balances hit a 4-year high.
The Exchange Balances plummet
There is little doubt that bitcoin has been losing its centralization. It is important to note the extent of this decline. Exchange balances fell even when bitcoin was on the rebound and heading into a bullish market. This has led to exchange balances falling to a 4-year low.
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These outflows have continued to be the rule of the day for months. Even though bitcoin had recovered its position at $40,000 several times, outflows from exchanges always exceeded inflows. This led to a decline in balances.
Source: BTCUSD on TradingView.com| Source: BTCUSD on TradingView.com
On April 14, more than 25K Bitcoins were withdrawn. This was one of the biggest outflows. valued at $1.9 billionIn a matter of hours, centralized exchanges were closed. CryptoQuant tweeted Thursday that the 4-year-lows were revealed.
$BTCOver a 4-year high, Spot Exchanges Reserve has fallen to a record low
Live Chart?https://t.co/52cmYEeYFo pic.twitter.com/BqB7koB5i0
— CryptoQuant.com (@cryptoquant_com) April 21, 2022
Bitcoin Outflows Are Not Slowing Down
Although bitcoin investors have reached a new low point, they continue to outflow their funds. Bitcoin outflows touched $1.3 BILLION on Wednesday 20 April, continuing the trend set by April 15th.
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The Friday outflow was $1.7 billion, which is a record for digital assets in the past 24 hours. Market volatility is quite high during weekends, so the market might see the first digital asset rise above $42,000 again.
?Daily Exchange Flow on the On-Chain#Bitcoin $BTC
➡️$1.42B
⬅️$1,7B
? Net flow: -$315.5M#Ethereum $ETH
➡️$557.2M
⬅️$524.1M Out
? Net flow: +$33.1M#Tether (ERC20) $USDT
➡️In: $647.2M
⬅️Outgoing: $668.5M
? Net flow: -$21.4Mhttps://t.co/dk2HbGwhVw— glassnode alerts (@glassnodealerts) April 22, 2022
BTC’s departure rate from exchanges at a rapid pace suggests that cryptocurrency investors are building up their portfolios. It has been this way for whales. But it looks like small investors are now following that same trend.
Featured Image from IG. Chart by TradingView.com
