Bitcoin has recorded the largest outflow from exchanges in more than 23 months, according to on-chain data from Cryptoquant. The data shows this is the largest outflow of Bitcoin from exchanges since November 2022, with all moving averages indicating withdrawals.
The outflows explain the recent decrease in Bitcoin exchange reserves, which had fallen 2.57 million BTC as of September 29. With these withdrawals and a corresponding reduction in exchange reserves, Bitcoin sell pressure has also fallen.
Cryptoquant writer, Cryptoonchain, noted:
“On-chain data shows an increase in #Bitcoin outflows from exchanges – all three 30-, 50-, and 100-day moving averages show this. This is the largest withdrawal of Bitcoin from exchanges since November 2022.”
Historically, an increase in Bitcoin outflows from exchanges is a bullish signal, as it signifies that investors are willing to hold the asset and no longer interested in selling it. This could not have come at a better time for Bitcoin, which fell more than 9% from its most recent peak of over $66,400.
Miners reduce selling in anticipation of price appreciation
Several factors appear to contribute to the reduced selling pressure, including the fact that miners have finally slowed down on dumping BTC on exchanges. Since the halving, miners have doubled down on selling off as they struggled to break even due to the higher costs of mining versus lower rewards.
However, recent data shows they have gradually reduced their exchange inflows. One user noted that this is likely because they are appreciating a future price appreciation, which is why they have chosen to hold off on selling for now.
With selling pressure reduced and more withdrawals, Bitcoin seems to be on a path to price recovery. The flagship asset is up 1% in the past 24 hours to reach $61,300, leaving behind earlier concerns that it might be unable to hold on to the $60,000 support level.
Uptober is still on
The return to green for Bitcoin means investors’ dream of a positive October can resume after a faltering start. This confirms the opinion of crypto analyst Axel Adler Jr., who noted that a bullish October remains very much a possibility despite the month starting with price declines.
He said:
“Average Bitcoin drop was 10%, except for August, when the price plunged by 22%. The current drop is 7%. Just because Uptober started this way doesn’t mean it will end the same.”
However, he added earlier that short-term speculators must reduce the supply by 80,000 BTC so that the flagship asset can more easily form a new bullish trend. At the time, he called on these traders not to flood exchanges with BTC for at least two weeks.
There are further signs that Bitcoin could be set for a rally after trader sentiment about crypto significantly changed over the past week. Per Santiment data, the crowd sentiment has cooled significantly, going from very excited to almost near FUD levels.
While this might seem bad news, Santiment analysts claim the change in crowd mood is good as the markets usually go opposite to crowd expectations. Crypto analyst Ali Martinez also noted a spike today in the Bitcoin Taker Buy/Sell ratio on the OKX exchange, indicating a surge in aggressive buying.
