For bitcoin, the third quarter 2022 was an unpredictable period. BTC’s price had fluctuated wildly during this time and ended up hitting lower lows than expected. However, this has not changed investors’ convictions about the cryptocurrency. At the end of the third quarter, investors saw a large withdrawal spree on centralized exchanges. This led to over $600 million worth of outflows.
Bitcoin outflows grow
It has been a significant trading day for Bitcoin since the last day of September. It was also the Friday of September, which meant that the end of the trading week had come and went. Bitcoin investors took this to mean they were ready to sell their bitcoins off the exchanges.
Data showsInvestors moved 34.723, BTC from centralized exchanges on the last day. At the time of withdrawals, this amounted to Rond $668.07million. This follows an accumulation trend which has gained momentum since mid September. It happened at a time when the trend for digital assets was below $20,000 and now it’s clear that the accumulation trend is what caused Friday’s spike to $20,000
In one day, more than 34k BTC leave exchanges| Source: Santiment
Santiment is a data-aggregator on chain that notes this as the 4th largest daily BTC inflow for digital assets. It also marks a 3-month new record for digital assets. Part of a large “bank run” that has seen the BTC held by centralized exchanges drop by more than 60,000 over the weekend.
Is this possible?
This is a good indicator that bitcoin will be able to remove large amounts of BTC from its centralized exchanges. Investors tend to do this when their long-term conviction is high, and they want to safeguard their coins as they hold out for the future since it is common knowledge that “Not your keys, not your coins.”
The result is a significant reduction in bitcoin supply on the open markets, which causes a supply shortage. There has been a rise in demand for the digital asset. This means that buy pressure is increasing. Santiment also notes in its post that the last time that the digital asset had seen such a massive movement of coins off exchanges, BTC’s price had rallied more than 22% in the next month.
Source: BTCUSD on TradingView.com| Source: BTCUSD on TradingView.com
It is interesting to note that October has been historically bullish for BTC as well the overall crypto market. The rally could take bitcoin to $23,000 within the next 4 week. But it’s important to keep in mind that bear markets are not ending. While a bitcoin breakout could be possible, maintaining such high levels will prove difficult for the cryptocurrency. A downward correction may lead to new lows.
Bitcoin trades at $19189 as of the writing. It is 10% lower than its 50-day average price of $21,234. Next is $19900. The digital asset, however, has been receiving increasing support at $19,000.
Featured Image from CryptoSlate. Chart from TradingView.com
Follow Best Owie on Twitter for market insights, updates, and the occasional funny tweet…