Bitcoin and Ethereum Exchange Exodus Continues to New Lows

On-chain analytics provider, Glassnode, has reported that Bitcoin exchange flows have returned to a dominance of outflows through August as investors withdraw the digital asset.

It added that the market has transitioned through a number of phases of exchange flow dominance over the last year. The previous outflow dominance was last seen in late 2020, just before BTC surged past its previous all-time high of $20K.

#Bitcoin exchange flows have returned to a dominance of outflows through August as investors withdraw $BTC.

The market has transitioned through a number of phases of exchange flow dominance over the last year, with outflow dominance last seen in late 2020. pic.twitter.com/BQLlw06SJr

— glassnode (@glassnode) August 19, 2021

BTC and ETH Exchange Exodus

In late July, more than 465,000 BTC left exchanges as reported by CryptoPotato. At the time, Glassnode reported that exchange balances had dropped to the lowest levels since the deep crypto winter of late 2018.

When Bitcoin leaves centralized crypto exchanges, it is usually viewed as a bullish sign. The assets may be getting moved into custody or cold wallets or being tokenized and invested in DeFi. Conversely, when there are large inflows to exchanges, it is considered bearish as investors may be starting to prepare to liquidate.

Data analyst Will Clemente commented that this past month has seen one of the largest declines in Bitcoin on exchanges in history.

“Exchanges down 111,033 BTC in the last 30 days. One of the sharpest drops of exchange inventories in Bitcoin’s history.”

Glassnode also noted that the same thing is happening with Ethereum. The total ETH held on exchange balances has hit an all-time low, at the same time as ETH 2.0 staking hits new highs, it stated.

The analytics provider stated that the recent uptick in ETH price has been supported by a continued outflow of ETH supply on exchanges. Exchange balances of Ethereum have now declined to reach an all-time low of 13% of the circulating supply this week, equivalent to 15.3 million ETH.

It added that a large portion, around 5.7% of the entire supply of Ethereum, has found its way onto the Beacon Chain deposit contract. The ETH 2.0 staking contract now has almost 7 million ETH, or around $21 billion, locked up.

Bitcoin Price Outlook

BTC prices have retreated again today, falling a further 2.5% over the past 24 hours. According to CoinGecko, Bitcoin was trading at $44,224 at the time of writing. The asset has now dropped 3.2% since the same time last week as the correction deepens.

In order to see the trend continue upwards, Bitcoin needs to break resistance at its previous high of $47,850 on August 16. The long-term outlook is still bullish, at least according to the infamous stock-to-flow model.