On June 8th 27,000 additional Bitcoin (BTC) were withdrawn from the exchanges where they were deposited. The last time there was such a significant outflow, Bitcoin rose 88%.
The trend for users to pull their assets off central exchanges has been gaining momentum since Black Thursday. However, the amount of Bitcoin that they removed yesterday is excellent, even in the context of this trend – worth $ 265 million.
The daily bitcoin net flows from the exchanges. Source: Glassnode
The Hodling’s logic explained
On March 19, users withdrew 31,000 BTC ($ 198 million) and on March 24, another 27,000 BTC ($ 180 million). The price of Bitcoin on March 18 was $ 5,238. By May 7, it had shot up to $ 9,892.
What could be the correlation or even causality between users withdrawing money from exchanges and the price of BTC? If a user hopes to sell his Bitcoin in the near future, he will keep it on an exchange.
USD 18,000 for August?
Vice versa, If the same user expects a price increase, they are more likely to withdraw their money into an unsecured wallet for better long-term storage. The more Bitcoin gives up the offer in the short term, the more the price tends to rise as long as the demand remains the same.
However, there is always more than one factor influencing price in the markets.
The average net bitcoin flows from the exchanges within seven days. Source: Glassnode
Analyzing the seven-day average for the same metric since Black Thursday, it barely peaked above the waterline. This would indicate a long-term impact on cryptocurrency investors.
If we saw the same appreciation as last time, the price of Bitcoin would reach $ 18,000 in late July. This would be consistent with Bloomberg’s recent predictions.