Key Points
- Nearly 5M Bitcoin (BTC) has left exchanges since 2020, indicating a strong accumulation trend.
- Decreased selling pressure on exchanges could potentially trigger a significant price rally for Bitcoin.
Bitcoin Accumulation Trend
Bitcoin (BTC) is currently experiencing a strong accumulation trend, despite the price volatility between $91k-$105k. According to Joao Wedson, founder of Alphractal, a crypto analytics firm, nearly 5M BTC has been withdrawn from exchanges since 2020. This suggests that investors are opting for a holding strategy. He stated, “4.85M BTC have left Exchanges since February 2020! The Exchange Flux Balance shows a massive shift. Since 2020, the game has changed—everyone wants Bitcoin at all costs.”
Potential Price Rally
The significant outflows from exchanges imply a decrease in the number of BTC available for sale on centralized exchanges. This supply squeeze coupled with low selling pressure could potentially instigate a significant price rally for Bitcoin. IntoTheBlock, a blockchain analytics firm, observed that exchange flows have been negative for the past seven trading days, indicating ongoing accumulation.
During the same period, the cryptocurrency’s value dropped by over 7%, falling from $109k to $97k, before bouncing back to $100k. This suggests that the price dip was marked by strong bids capitalizing on the lower prices.
CryptoQuant noted a similar decrease in selling pressure on Binance, with the taker sell volume dropping significantly over the past week, suggesting short-term weakness among short-sellers. The analysis read, “As the influence of sellers diminishes, buyers may step in, potentially leading to a new upward wave.”
These factors combined suggest that a significant price rally could be imminent. The upcoming Federal Reserve rate decision could provide further insight into these expectations. However, BitMEX co-founder Arthur Hayes predicts a potential 30% drop to $70k-$75k in the near term, followed by a rally to $250k by year-end.