Bitcoin buyers may have bought the recent price dip and now are taking down their cryptocurrency from exchanges, blockchain data suggests. To digital-market analysts, it's a bullish signal traders or investors might be preparing to hold their BTC for the long term.
- More than 1,365 BTCs were removed from cryptocurrency exchanges during the 24 hours through 12:00 UTC Thursday, the highest for a 24-hour period so far this year, according to the blockchain data firm Glassnode.
- The spike in withdrawals from exchange addresses came as the No. 1 cryptocurrency by market capitalization slumped on Thursday to near $50,000, from a high at $56,783.86 in the past 24 hours.
- "Today we have a new all-time high in BTC leaving the exchanges for 2021 and a new dip-buying prize to award," bitcoin analyst Willy Woo tweeted Thursday.
- At the same time, more coins are being withdrawn to an illiquid status, separate blockchain data show.
- The monthly net change of supply held by liquid and highly liquid entities have pushed into deeply negative levels, to a degree not seen in three years, according to Glassnode. (See chart above.)
- That might be related to many investors' growing use of bitcoin as a hedge against inflation in the face of trillions of dollars of monetary stimulus pumped into global financial markets over the past year by central banks around the world.
- "The trend of coins withdrawn and locked away into long-term holding patterns is a direct response to the world's central bank response to 2020," Glassnode wrote in its newsletter earlier this month. "There still appears to be significant demand from long-term investors."
- At press time, bitcoin is changing hands at $51,278.06, down 9.49% in the past 24 hours.
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