Institutions continue to drive bitcoin despite the recent bearish price action. This might be a reason why retail leverage traders aren’t as interested in it. This is because institutions are focusing on longer-term horizons and see the potential for big profits in BTC’s growth over time.
Coinbase in the U.S. has witnessed a significant outflow of coins recently. As per Glassnode, a Blockchain Analytics firm
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Bitcoin prices have been soaring due to volatile market conditions. Coinbase saw 31,130 bitcoin leave Coinbase in the last week. Glassnode has tracked this outflow as the largest single week since 2017.
This week’s newsletter was published on Monday. Glassnode stated;
This large outflow is part of an ongoing trend in Coinbase’s balance. It has been steadily declining over the last two year. The largest BTC exchange balance is at Coinbase, making it a popular venue for U.S. institutions. This further encourages the adoption of Bitcoin as a macro-asset by institutions larger than the US.
Over the last week, crypto markets experienced severe drought. The Nasdaq-listed exchange’s holding in bitcoin has dropped a four-year low of 649,500 BTC for just the second time since 2018. The total bitcoins owned by all centralized exchanges decreased to 2,519.403 BTC. This is also the lowest level since November 2018.
Transfer Bitcoins To Inactive Wallets
Coinbase withdraws may cause Bitcoin to rise in price. The declining exchange balance means fewer coins are available for liquidations on exchanges, which could lead to an increase in demand and push prices higher still – especially since those withdrawals have moved into largely inactive wallets.
Glassnode also stated that
The Illiquid Supply Shock Ratio, (ISSR) shows a notable uptick in this week’s numbers. This suggests that the withdrawn coins were moved to a wallet without any history of spending.
An upwards trend in the ISSR suggests that these withdrawn currencies were transferred to a wallet without any history of spending.
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Illiquid wallets have an inventory that is currently 3.2x greater than Liquid, Highly-Liquid, and combined. This means that there are many coins still stuck in Illiquid wallets despite recent bear markets. A similar metric to what we saw during the 2018 – 2020’s bear market.
On Monday, major cryptocurrencies suffered only minor losses. As the European Parliament’s Committee on Economic and Monetary Affairs voted down a bill. The bill might have made it illegal to show proof of work on EU territory.
The markets were volatile yesterday as investors waited to hear what the Federal Reserve would do with today’s policy meeting. The NASDAQ100 Index fell 2% and the SPX500 Index lost 0.75%. These declines in stock price led to DJ30 closing flat.
BNB, Solana and XRP all experienced a slight correction in the crypto market. They lost 2% each. Bitcoin was also down 1.6% and traded under $40,000 at time of writing.
Featured Image from Flickr. Chart from Tradingview.com