While the price of Bitcoin has not been doing anything too monumental of late, having been bound in a range between $11,000 and nearly $12,000 there is some evidence that a bullish trend is developing when looking at BTC on exchanges.
Bitcoin being stored on exchanges, usually ready for quick trades and fast movement, has shown to be dropping in recent times. This immediately points towards a lack of Bitcoin sellers, but the bigger implications could be really positive for the price of Bitcoin.
Since the March crash, the reserves on exchanges rapidly fell from 2,950,000 BTC to 2,700,000 BTC, and are showing signs of falling further. This fall indicates a total of $2.85 billion decline. Behind the steep trend could be two major factors: a decline in sellers and lower trust toward exchanges.
While there is a p[otnetial bullish case here as shortness of sellers could see an accumulation phase, there also seems to be less trust in exchanges following the BitMEX revelations, as well as OKEx, most recently.
The amount of BTC dropping off the exchanges has mostly been attributerd to a lack of sellers.
As retail sellers refrain from selling Bitcoin at current prices, institutions are also acquiring more BTC. The simultaneous drop in selling pressure and an increase in buyer demand is an optimistic trend for Bitcoin.
A trader known as “Oddgems” said the data shows Bitcoin is likely moving from exchanges to non-custodial wallets. If so, it indicates that investors are moving their funds to hold for a longer period. He said:
“More and more #Bitcoin getting out from exchanges and most probably being transferred to non-custodial wallets. This suggests slightly lower liquidity and lower selling pressure going forward.”
Another factor pushing money off the exchanges is the collapse in trust for some major exchanges, such as BitMEX and OKEx. Although BitMEX swiftly processed withdrawals and OKEx wallets show no outflows, the regulatory uncertainty was sufficient to cause exchange reserves to slip.