Bitcoin Outflows Hit Highest Since FTX Crash, Bullish?

On-chain data shows that Bitcoin exchanges have posted the most significant exits since the crash of crypto exchange FTX in November.

Related Reading: Bitcoin Investors Go Greedy For The First Time Since March 2022

Bitcoin Exchange Netflow Shows Deep Negative Values

As one analyst noted in a CryptoQuant post, around 7,000 coins left the exchange in this latest spike. The relevant indicator here is the “net flow from all exchanges”, which measures the net amount of Bitcoin leaving or entering the wallets of all centralized exchanges. The value of the metric is calculated by taking the difference between the inputs (coins going in) and the outputs (coins going out).

When the indicator has a positive value, inflows exceed outflows, and a net amount of coins is deposited on exchanges. As one of the main reasons investors deposit on exchanges is for selling purposes, this trend may have bearish implications for the price of crypto.

On the other hand, negative values imply that a net amount of supply is currently being withdrawn from these platforms. Generally, holders withdraw their coins from exchanges to keep them for extended periods in personal wallets. Therefore, such metrics may indicate that investors are piling in right now, which may have a bullish impact on the price.

Now, here is a graph showing the trend in the net flow of all Bitcoin exchanges in the last few months:

It seems that the value of the metric has been quite negative recently | Source: CryptoQuant

As shown in the chart above, Bitcoin’s net trade flow recorded a deep negative spike over the past day. This outflow amounted to around 7,000 BTC, leaving the wallets of these platforms with the highest value the metric has seen since the FTX crash in November of last year.

From the chart, it is apparent that the aftermath of the FTX crash saw some substantial exit values. The reason behind this is that an exchange known as FTX that went bankrupt instilled fear among investors and made them more aware of the risks of holding their coins on centralized platforms.

Naturally, these holders fled exchanges en masse (causing the net flow to plunge into red values) so they could store their Bitcoin in external wallets, the keys they hold.

Interestingly, the last negative net flow spike was recorded while Bitcoin was seeing a strong rally. Innings are usually seen more commonly in periods like now, as investors scramble to make some profit.

Therefore, instead of making these big exits, investors are showing signs that they are bullish on Bitcoin for the long term and feel that the current rally has even more to offer.

That would only be if these investors made the withdrawals with accumulation in mind. In the event that they transfer these coins to sell through over-the-counter (OTC) deals, Bitcoin could feel a bearish momentum.