Bitcoin (BTC) is again showing bullish signs as outflows from crypto exchanges to personal wallets appear to be registering a significant uptick, according to the latest on-chain data.
According to a post published by the crypto analytics platform CryptoQuant, the outflows observed from the exchanges were described as “very significant”. The post adds that this is the “highest amount in several months”, standing at over 61,000 BTC in the past three days alone.
“After months of price [bas]this is a sign of the return of demand on the market”, indicates the user maartunn, author of the post.
Liquidity outflows at exchanges are generally seen as bullish for cryptocurrency prices, as they indicate a long-term conviction in the asset at the level of investors who therefore do not plan to sell again in the short term. Conversely, liquidity inflows on exchanges are considered bearish, as it is an indicator that investors are losing confidence and therefore sending cryptoassets to exchanges to sell.
At the same time, bitcoin balances held on stock exchanges have also been on a steady downward trend in recent months, after peaking in early August.
The biggest drop in bitcoin balances was seen between September 29 and October 1, when the level fell from 2.14 million BTC to 2.08 million across all major exchanges, according to data from Coinglass. All other things being equal, decreasing amounts of bitcoins held on the stock exchanges are seen as a bullish factor for the price.
In the past, several theories have been discussed to explain the decline in bitcoin balances on exchanges. Some scholars cite over-the-counter (OTC) transactions as the explanation, while others claim that the rise in the number of bitcoin whales shows that large holders choose to maintain full control of their own assets.
At the time of writing, Bitcoin is trading around $19,200, according to data from Coinmarketcap, up 0.28% over the past 24 hours and up 0.37% over the past seven days.
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