Bitcoin Exchange Activity Reaches 2016 Lows as Investors Opt for Holding Over Selling
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Bitcoin exchange deposits drop to 2016 lows – Here’s what it means
Despite a recent spike in sell pressure keeping the asset below $100K, Bitcoin’s long-term outlook remains positive. According to CryptoQuant analyst Axel Adler, the amount of BTC being moved to exchanges has plummeted to levels not seen since 2016. This development could be indicative of investors choosing to hold onto their assets rather than selling them.
The data suggests that deposits on exchanges have dramatically decreased, with daily figures dropping below 45K coins. This mirrors a similar trend observed in 2016, which historically preceded a major rally for the cryptocurrency. The analyst emphasizes that this sudden drop typically indicates that market participants prefer to keep their Bitcoin in personal wallets rather than gearing up to sell.
Furthermore, an examination of net inflows and outflows from exchanges reveals a negative reading, signifying dominance in exchange outflows. This metric, known as the BTC netflow-to-reserve ratio, measures the correlation between net inflows or outflows relative to exchange Bitcoin reserves. The current negative reading reinforces the notion that more Bitcoin is leaving exchanges than recorded deposits are being made.
These findings collectively indicate a positive outlook for Bitcoin’s long-term prospects despite recent short-term weakness. As the cryptocurrency consolidates within a narrow range during the holiday season, between $100K and the 50-day EMA (Exponential Moving Average), its daily RSI has slipped below 50, signaling weakening demand in the near term.
If bearish pressure persists, it is possible that Bitcoin could drop to $90K or $85K. However, if price manages to hold above this dynamic support of a 50-day EMA, it may increase the likelihood of retesting $100K or even breaking out positively.
Source: ambcrypto.com
