- Data from Glassnode shows that traders are withdrawing roughly 2,000 BTC from centralized exchanges daily.
- Although interest in Bitcoin is still high, sophisticated traders and institutions are cautious and are spreading their risk.
As Bitcoin continues to trade in the $31,000 and $35,000 price range and analysts continue to differ on the direction the digital asset will take next. Despite this, investors continue to accumulate. According to data from Glassnode, Bitcoin reserves in centralized exchanges has fallen to levels not seen since April when Bitcoin was trading at its $65,000 ATH levels. At the time, the market craze was been driven by FOMO (Fear of Missing Out) with most analysts predicting a $100,000 BTC price tag before the end of the year. Glassnode notes that much of the BTC being withdrawn ended up in the Grayscale GBTC Trust and with institutions.
The research firm further details that there are currently around 2,000 BTC (worth roughly $66 million) outflows in centralized exchanges daily. The researcher’s notes;
On a 14-day moving average basis, the last two weeks, in particular, have seen a more positive return to exchange outflows, at a rate of ~2k BTC per day.
The new trend suggests that traders are confident and are in particular expecting a strong move in the short term. When the market is optimistic, traders are interested in purchasing and withdrawing their holdings from exchanges. The opposite is true when the market is cautious, traders are interested in selling and keep their holdings in exchanges for fast trade executions.
While retail traders are seemingly optimistic, the trend with large investors and institutions who prefer crypto funds to crypto exchanges seems to be one of caution.
Coinshare’s report suggests institutions uncertain of Bitcoin
The most recent report by digital asset manager CoinShares shows that there has been a relative change in small-cap and large-cap funds. Investors are increasingly withdrawing from Bitcoin and Ethereum, growing their exposure in multi-asset products. The firm wrote;
While the inflows [in multi-asset investment funds]remain relatively small in comparison to Bitcoin and Ethererum, the data does imply that investors are increasingly looking to diversify their digital asset holdings,
With traders also taking a key interest in small-cap coins, if and when the Bitcoin breakout takes place, altcoins are set to follow the trend and rally.
Bitcoin remains hesitant despite developments around the technology suggesting that the worst is behind. Its recent turmoil was largely influenced by China’s mining crackdown. With the FUD over and most miners relocating to other regions and resuming operations, most traders expect Bitcoin to make a recovery.
Read More: Bitcoin on recovery mode: BTC exchange inflows drop, miners start accumulating
At the time of press, Bitcoin is still consolidating within a range but after a 3 percent drop has drifted to the $32,000 support.
