While bitcoin’s four-month price decline appears to have scared retail leverage traders, institutions with longer time horizons appear to be unworried. According to blockchain analytics firm, this is evidenced by the recent significant outflow of coins from the US-based crypto exchange Coinbase (COIN).
Last week, a total of 31,130 bitcoins departed Coinbase, the greatest single-week outflow since 2017, according to the data. The quantity of coins held on the Nasdaq-listed exchange has dropped to a four-year low of 649,500 BTC as a result of the outflow during the past week. The total amount of bitcoins held on all centralised exchanges has fallen to 2,519,403 BTC, the lowest level since November 2018.
Because the exchange balance is decreasing, there are less coins available for liquidation on the exchange. In other words, sell-side liquidity is drying up, implying the possibility of a rapid rise upward, especially given the fact that the coins removed from Coinbase were relocated to a mainly inactive wallet.
According to the source “We can notice a big rise this week in the Illiquid Supply Shock Ratio (ISSR), suggesting that these withdrawn coins have been placed into a wallet with little-to-no history of spending.”
Bitcoin was recently spotted trading about $38,600, down 2% from the previous day.