Bitcoin withdrawals from exchanges have surged to levels unseen in years, hinting at a vibrant activity that could herald a bullish future for the cryptocurrency. With BTC’s price hovering near all-time highs, a closer examination of the data reveals a pattern reminiscent of 2021, a year characterised by substantial financial movements within the crypto sphere. James Van Straten, a vigilant observer and research analyst at CryptoSlate, highlighted this phenomenon and the significant volumes of Bitcoin withdrawn from exchanges on March 3.
Data sourced from Glassnode indicates that on the first day of March alone, withdrawals totaling $2 billion worth of BTC were made from exchanges. Van Straten’s reaction, “I don’t think I’ve quite seen anything like this before,” underscores the rarity of this occurrence. Total withdrawals on that Friday surpassed $2.3 billion, marking one of the largest outflows in over half a decade. Such movements suggest that while many buyers might still be on the sidelines, there is strong activity within the Bitcoin market, with substantial amounts of BTC reserves being withdrawn.
Interestingly, these withdrawals have drawn parallels to notable outflows observed on June 28–29, 2021, periods that also witnessed record withdrawals. The narrative deepens as Van Straten points out the involvement of United States spot Bitcoin exchange-traded funds (ETFs), which contributed to the movement, excluding approximately $200 million directed to custodian Coinbase Pro. Binance and Coinbase were the primary platforms experiencing these outflows, with Binance recording about $400 million and the remaining balance attributed to Coinbase. The analyst highlighted that Binance’s outflows were particularly intriguing as they were unrelated to ETF activities.
Insights from Glassnode reveal that the total Bitcoin assets available across major trading platforms dropped to 2,286,347 BTC ($142.5 billion) as of March 2, reaching its lowest point since March 2018 when Bitcoin’s value was around $8,000. This decline in Bitcoin reserves on exchanges signals a shifting landscape within the cryptocurrency market.
Concurrently, alongside the decreasing Bitcoin reserves on exchanges, there’s a noticeable shift in market composition indicating an influx of new Bitcoin investors. Analysis from CryptoQuant has shown changes in the ages of unspent transaction outputs (UTXOs), indicating increased activity among “younger” coins and a resurgence of “older” coins dormant for six months or more. This trend suggests growing interest from new individual investors, potentially setting the stage for a significant bull run.
Adding to the bullish sentiment is the potential for Bitcoin to reach $180,000, a projection based on historical gains and the current market momentum. Caleb Franzen, founder of Cubic Analytics, identified a rare bull signal through the Williams%R Oscillator on three-year timeframes, marking only the fourth occurrence in Bitcoin’s history. While past performance does not guarantee future results, the consistency of these signals in indicating bullish phases is noteworthy.
Furthermore, the Relative Strength Index (RSI), another indicator used to assess price momentum, has shown signs of Bitcoin entering overbought territory on daily timeframes, a condition often associated with the most vigorous parts of bull markets. Monthly RSI readings also reflect an optimistic outlook, entering the overbought zone and suggesting sustained momentum behind Bitcoin’s recent price surge.