Data shows that Bitcoin’s reserves on exchanges have slipped to 12.2% of the total supply, and according to statistics, investors have withdrawn 123,500 Bitcoins from exchanges this month.
According to Glassnode’s latest weekly report, the reduction in Bitcoin balances on exchanges is equivalent to 0.86% of the total supply.
The relevant metric here is the “Exchange Balance Percentage Ratio”, which measures the percentage of all bitcoins held in cryptocurrency exchange wallets as a percentage of the total circulating supply of bitcoins.
When the value of this indicator rises, it means that cryptocurrency exchanges are currently seeing net inflows of Bitcoin. If this trend continues for a long time, it may mean that the price of bitcoin will fall, because that may be a sign that investors are selling bitcoin.
On the contrary, when this indicator declines, it means that investors are currently letting Bitcoin flow out of the exchange, possibly depositing it in a cold wallet for safekeeping, starting the “HODL” mode and holding it firmly.
The chart below shows the trend of Bitcoin balances as a percentage of total supply on cryptocurrency exchanges over the past few years:
As the chart above shows, the percentage of bitcoin balances on exchanges have been sliding for some time, but the recent decline has been particularly sharp.
In October of this year, there was a net outflow of 123,500 bitcoins from the market, an outflow equivalent to 0.86% of the total circulating supply of the cryptocurrency. Then, the trend continued to decline, and Bitcoin balances on exchanges today are only 12.2% of the total supply, equivalent to levels reached in January 2018.
This means that the bitcoins that flowed into exchanges at the peak of the previous cycle have been removed by investors.
Coinbase’s Bitcoin balance also shows that the exchange’s Bitcoin outflow is the main reason for the recent decline in the above data. On this platform, last week alone, the net outflow of Bitcoin reached 41,000.
Bitcoin is trading at $20,751 at press time, up 7% last week and 9% over the past month.