Investors and traders move cryptocurrency away from centralized exchanges as accumulation on the market begins
Centralized exchanges are constantly using user funds as more traders and investors decide to use private, non-custodial solutions to store cryptocurrencies, Glassnode reports. Although the data does not include the OTC market and decentralized exchanges, $2 billion worth of crypto withdrawn from exchange circulation could still have a significant effect on market liquidity.
As data suggests, the crypto market saw outflows of $1.9 billion worth of BTC in the last 24 hours, with $1 billion moving on exchange balances. The net flow of Bitcoin would remain at a negative $925 million. Ethereum and Tether reported a positive flow, but it still does not cover even half of the loss exchanges faced from Bitcoin outflows.
Why is daily trading flow important?
The balance of Bitcoin and other major cryptocurrencies on centralized exchanges often represented the sentiment of cryptocurrency traders. Here, large Bitcoin outflows suggest an accumulation trend among investors.
As more coins leave exchanges, liquidity on the crypto market drops, which creates additional pressure with increased volatility. While sometimes negative net flow is not tied to accumulation, it is still considered a positive factor for the value of an asset as it removes the supply.
Bitcoin Market Performance
Over the past week, Bitcoin has lost around 5% of its value and failed to recover almost any part of it.
At press time, Bitcoin is trading at $40,308 while previously bouncing to $41,150, but since bearish tendencies prevail on the market, the first cryptocurrency quickly retraced to $39,630 yesterday and still merges around that price.
