Bitcoin is being pulled off exchanges in greater numbers these days and on-chain data reveal that roughly 70k BTC has been sent off exchanges in the last few days, which could indicate a positive price trend.
The amount of bitcoins kept on exchanges has been steadily declining in recent months, indicating that crypto enthusiasts are withdrawing cash from trading platforms for long-term holding.
In the last week, CryptoQuant’s “all exchanges reserve” indicator, which gauges the total amount of Bitcoin saved in wallets of all centralized exchanges, has recorded approximately 70k BTC withdrawals from exchanges, which may not be good for short-term price action but is bullish in the long term.
In general, an influx of crypto-assets into exchanges is bearish for those assets because investors can sell their holdings for fiat or something comparable because supply is readily available.
If assets flow out of an exchange (as they are currently), it indicates that investors expect a favorable scenario ahead and would rather hold Bitcoin for the long term than store it on less secure exchanges.
The sideways trend is intriguing because, despite the fact that the price of Bitcoin has been struggling recently and macro risks such as the Russian-Ukraine war hover over the market, the signal has not increased significantly.
Normally, a significant selloff occurs during moments like these, but the fact that the metric is still going sideways indicates that there is still enough demand (that is, outflows) to offset any inflows. For the price of Bitcoin, this trend might be bullish.
Bitcoin was trading around $40,700 at the time of writing, up more than 7% this week.