Apparently, the Ukraine-Russia situation was a wakeup call for large institutions. In an unexpected turn of events, the Bitcoin net outflow has had a significant increase in the past few weeks. We discussed the decreasing Bitcoin supply in exchanges a few days ago and how it could be a bullish sign. To follow that up, Coinbase is now holding fewer Bitcoin than it has in years. This Bitcoin net outflow is the largest since 2017 bull market and continues to be a great sign for investors.
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Update: Bitcoin Net Outflow in April 2022
Currently, the intense outflow is persistently going on as it is reaching historical proportions. Glassnode’s co-founder Yann Allemann recently said in his Twitter account that Bitcoin is basically bound to grow. BTC is leaving exchanges at a record high rate.
Allemann said in Twitter that looking at Bitcoin’s net unrealized profit/loss (NUPL) metric indicates BTC is long-term bullish. Why? the indicator is showing that most investors are taking profits at a slower rate as compared with market’s growth.
“Short-term BTC is fragile. Long-term higher prices are inevitable.”
Furthermore, Allemann also points our how investors seem to be determined to save BTC rather than selling it. Basically, the iliquid supply of Bitcoin has been on a rally in the past six months. This is surely indicative of an accumulation phase and of course reduced selling pressure.
“Bitcoin’s illiquid supply has been increasing for the past 214 days. Surpassing the 2020 accumulation.
BTC selling pressure is fading. See for yourself.”
Exchange Outflows
On the other hand, Allemann is also looking at exchange outflows to measure the scale of the BTC accumulation. And the results are simply historical. At this point, over $4 billion worth of Bitcoin is leaving exchanges every month.
“Bitcoin exchange outflow volume recently hit a rate of 96,200 BTC per month. Aggregate exchange outflows of this magnitude have only been seen on a handful of occasions through history, with most being after the March 2020 liquidity crisis.”
Bitcoin Net Outflow
The blockchain analytics firm Glassnode says that Coinbase, the giant exchange based in US is now holding significantly lower amount of BTC than it has in years.
According to Glassnode, BTC reserve in Coinbase has decline over 36% over the last two years.
Last week, a staggering 31,000 Bitcoin net outflow was recorded exclusively on Coinbase. At this point, all other exchanges are experiencing an intensified outflow in their BT holdings.
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Currently, the remaining BTC balance is at its lowest level since the bull market of 2017 According to Glassnode. This could seriously reduce selling pressure for the largest digital asset in the world. In the meantime, it is also indicative of growing crypto adoption.
This remains a strong signal that investors increasingly see Bitcoin as a relevant asset in modern portfolios.
This outflow has dropped the total balance held on Coinbase to 649,500 BTC, bringing it back to levels last seen at the 2017 bull market top. The total Bitcoin balance held by Coinbase has now declined by 375,500 BTC (36.6%) from the ATH reached in April 2020.
Large outflows like this one are actually part of a consistent trend in the Coinbase balance, which has been stair-stepping downwards over the last two years. As the largest exchange by BTC balance, and a preferred venue for US-based institutions, this further supports the adoption of Bitcoin as a macro asset by larger institutions.”
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