Bitcoin whales have withdrawn over 8 million BTC from exchanges to their own wallets,
with Shrimps also putting a significant amount of coins into illiquid supply.

Investors are struggling because of the recent market downturn. However, on-chain data shows that they are not selling their investments. They are holding on even as the market dips below $20,000.

On-chain data from Glassnode shows that the Bitcoin (BTC) exchange netflow ratio recently hit 0.69. It’s the highest since December 2017 when Bitcoin was last in a bull market.

The Bitcoin netflow ratio measures the amount of BTC flowing into exchanges versus the amount of BTC flowing out. And is used as a gauge for investor confidence.

Bitcoin investors continued to remove their assets from exchanges last week, according to Glassnode’s on-chain analytics platform.

Glassnode, a cryptocurrency exchange in a Tweet, reports that the risk-off mood has resulted in $151K per month of outflows during June.

It’s the highest amount of people selling BTC on exchanges that we’ve seen to date. With hodlers retreating to secure offline wallets as they seek to weather the crypto winter.

The Bitcoin netflow ratio is a key metric used by analysts to gauge investor confidence.

A high netflow ratio indicates that more Bitcoin is leaving exchanges than entering. Indicating that investors are confident in the long-term prospects of the asset and are less likely to sell.

In contrast, a low netflow ratio indicates that more Bitcoin is entering exchanges than leaving. Suggesting that investors are more likely to sell in the short-term.

Exchange reserves drop to 2018 levels

According to Glassnode, aggregate reserves have plummeted significantly over the past year. With continued large-scale withdrawals driving exchange balances to levels last seen in July 2018.

This suggests that Bitcoin held on exchanges is becoming increasingly scarce. As investors move their Bitcoin off of exchanges and into wallets where they have full control over their private keys.

Whales behind the Bitcoin outflow?

It’s worth noting that a large portion of Bitcoin leaving exchanges in recent months. Has been moved by whales – large-scale investors with significant amounts of Bitcoin.

This is likely due to a combination of factors, including a desire for greater control. Over private keys and a belief that Bitcoin will continue to increase in value over time.

Whatever the reasons, it’s clear that whales are playing an important role in the current Bitcoin outflow from exchanges.

Overall balance on exchanges have seen an aggregate outflow of -750k BTC since March 2020. The last three months alone have seen some 142.5k BTC in outflows alone, a remarkable 18.8% of the total,” Glassnode wrote in its weekly report.

As the exchange reserves shrink, the illiquidity of Bitcoin’s supply has grown as stockholders move their coins to wallets.

On-chain data shows that the illiquid supply has increased by more than 223,000 Bitcoin in July. With whales withdrawing over 8.69 million BTC from exchanges Glassnode monitors.

According to the reports, exchange outflows have been gradually increasing since April and hit 140 BTC/month in June.

Bitcoin ‘visitors’ eliminated

The collapse of LUNA and subsequent rot have impacted several crypto firms, causing Bitcoin’s value to drop to $17,600 in June. In conjunction with wider market pessimism, selling activity had the most influence on “market tourists” – the helpless hands.

Bitcoin has locked in one of the worst monthly price performances in history, with prices trading down -37.9% in June. Bitcoin has seen a near-complete expulsion of market tourists, leaving the resolve of HODLers as the last line standing,” the analytics platform noted in its report.

But around 48.1% of all bitcoins that are not on exchanges have been lost, according to another Glassnode Tweet.

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James Atkins

I have been writing copy for blockchain-related projects since 2017. I understand the importance of being able to communicate clearly and effectively with both technical and non-technical audiences. By leveraging my understanding of the crypto industry trends, I can help increase adoption in this rapidly evolving landscape.