Bitcoin outflows from centralized exchanges have reached a new high for the year, with roughly 40,000 BTC withdrawn in the last seven days.
According to Glassnode’s The Week On-Chain report from August 2, Bitcoin outflows have accelerated to a rate greater than 100,000 BTC per month for only the third time since September 2019. According to the on-chain analytics provider, only 13.2 percent of circulating BTC is currently held on exchanges, a new low for 2021.
According to the report, “this represents a near full retracement of the significant inflow volume observed during the May sell-off.”
Outflows increased to nearly 150,000 BTC per month by the end of April 2020, following the violent “Black Thursday” crash in which crypto prices fell by more than 50% in less than two days after then-US President Trump announced a travel ban between Europe and the US in March as the coronavirus pandemic intensified. Despite the sharp drop, Bitcoin had recovered by 150 percent by the end of May 2020, resulting in heavy accumulation.
Outflows approached 150,000 BTC per month again in November 2020, when Bitcoin surged to test its then-record price high of $20,000, before rallying to new all-time highs the following month.
Throughout most of 2021, Glassnode observes divergent trends between Coinbase and Binance, with Coinbase experiencing significant outflows while Binance has been the largest recipient of BTC.
However, Binance’s reserves are starting to dwindle, with 37,500 BTC (worth approximately $1.5 billion) leaving the exchange in the last week.
In June, Coinbase balances remained stable. While the exchange received 30,000 BTC in mid-July, 31,000 BTC was withdrawn this week.
When it comes to macro sentiment, the on-chain analytics provider uses its “Liveliness metric” to identify accumulation trends.
Following May’s immediate sell-off, the metric, which measures the ratio of the sum of coin days destroyed to the sum of all coin days ever created, shows a broad trend of accumulation.
The report concluded, “It appears that HODLing and accumulation is the most likely dominant trend in the on-chain market.”