On-chain data shows the Bitcoin outflows from cryptocurrency exchange Coinbase have surged recently, a sign that could be bullish for BTC.
Bitcoin Exchange Outflow For Coinbase Has Shot Up Recently
As pointed out by an analyst in a CryptoQuant Quicktake post, there has appeared to be huge demand for the asset recently. The relevant indicator here is the “exchange outflow,” which keeps track of the total amount of Bitcoin moving out of the wallets of any given centralized exchange.
When the value of this metric is high, it means that the investors are currently withdrawing a significant number of coins from the platform. Generally, holders take their coins out of the custody of exchanges to hold onto them for extended periods.
As such, large outflows can have a bullish impact on the cryptocurrency, at least in the long term. On the other hand, the low metric implies that investors are making few withdrawals right now.
Depending on the trend occurring in the inflow (that is, the amount of deposits happening, which can be for selling purposes), this trend can either be neutral or bearish for the asset’s price.
Now, here is a chart that shows the trend in the Bitcoin exchange outflow for Coinbase over the last couple of weeks:
The value of the indicator appears to have been quite high in recent days | Source: CryptoQuant
The above graph shows that the Bitcoin exchange outflow from Coinbase has recently spiked. A huge spike in the indicator occurred just before the rally towards $50,000 took place for the asset.
Coinbase is the preferred platform for American institutional investors, so movements related to the exchange can provide hints about the behavior being shown by these whales.
The significant spike would imply that these humongous entities have possibly participated in some large accumulation. And given that the asset’s price blew up shortly after these outflows, it’s possible they indicated the occurrence of some fresh buying.
Even after the rally, the Bitcoin exchange outflow for Coinbase has continued to observe spikes. However, they are clearly much smaller than the aforementioned large spree of withdrawals.
“What can we observe here? There is a huge demand, especially today,” explains the quant in the post. “Remember, they want your Bitcoins. Don’t give in to FOMO, and make sure you have strong hands.”
The chart shows that the rally from below $43,000 to $48,000 earlier in the month also occurred as Coinbase saw outflows. When the withdrawals dropped off, though, the coin hit a phase of sideways movement until the latest surge came.
As such, the indicator could be to watch in the coming days, as a return to low levels may indicate the cooldown of bullish momentum for Bitcoin, at least in the short term.
BTC Price
Bitcoin had risen past the $50,000 mark earlier, but it would appear that the coin has seen some pullback as it’s now back at $49,600.
Looks like the price of the coin has sharply gone up over the last few days | Source: BTCUSD on TradingView
Featured image from Erling Løken Andersen on Unsplash.com, CryptoQuant.com, chart from TradingView.com
