Despite four-month bearish price action, institutions continue to hoard bitcoin, which could have scared off leveraged retail traders. This is because institutions are focusing on longer time horizons and see the potential for big gains in BTC growth over time.
The recent large outflow of coins from the US-based crypto exchange Coinbase is evident, according to blockchain analytics firm Glassnode.
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Recent highly volatile markets have pushed bitcoin prices down, with a total of 31,130 bitcoin leaving Coinbase in the past week. This is the largest one-week outflow since 2017, data tracked by Glassnode.
In a weekly newsletter published on Monday, glassnode said;
Big outflows like this are actually part of a consistent trend in Coinbase’s balance, which has been going down for the past two years. As the largest exchange by BTC balance and a preferred location for US-based institutions, this further supports the adoption of bitcoin as a macro asset by larger institutions.
Crypto markets have been experiencing a dry spell over the past week. Bitcoin holdings on the Nasdaq-listed exchange have fallen to a four-year low of 649,500 BTC for the second time since 2018. Additionally, the number of bitcoins held by all centralized exchanges has dropped to 2,519,403 BTC, the most Low since November 2018.
Bitcoin is currently trading above $40,000 with an increase of 2.7% | Source: Tradingview.com BTC/USD chart
Withdrawal bitcoins moved to dormant wallets
The Coinbase withdrawal may be driving up the price of Bitcoin. The declining exchange balance means there are fewer coins available for settlements on exchanges, which could lead to increased demand and push prices even higher, especially as those withdrawals have moved to largely dormant wallets.
Additionally, Glassnode said;
If we look at the Illiquid Supply Shock Ratio (ISSR), we can see a significant increase this week. Which suggests that these withdrawn coins have been moved to a wallet with little to no spending history.
The ISSR is trending upwards, suggesting that these withdrawn coins were transferred to a wallet with little or no spending history.
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The current amount of supply held in Iliquid wallets is 3.2 times higher than the combination of Liquid and Highly-Liquid. Which means a lot of coins are still stuck there despite the recent bear market conditions. A similar metric to what we saw during the 2018-2020 bear market.
Major cryptocurrencies posted mostly small losses on Monday. As the Committee for Economic and Monetary Affairs of the European Parliament voted against a bill. That bill could have banned proof of work on EU territory.
Markets were volatile yesterday as investors waited to find out what the Federal Reserve would do with today’s policy meeting. The NASDAQ100 fell 2%, while the SPX500 index fell 0.75%. DJ30 closed flat after these declines in share prices.
The crypto market saw a slight correction, with Ethereum, BNB, Solana, and XRP shedding 2%. Bitcoin was also slightly down 1.6% in value and was trading below $40,000 at the time of writing.
Featured image from Flickr, chart from Tradingview.com
This post Bitcoin Valued at $1.2 Billion Left Coinbase in Sign of Continued Institutional Adoption
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