Bitcoin is experiencing significant withdrawals from centralized exchanges, indicating reduced liquidity and a rise in market prices. This trend highlights long-term changes in investor behavior.
Exchange Withdrawals
Throughout the last days of February 2024, Bitcoin showed negative netflow on centralized exchanges, indicating a decrease in liquidity. Ongoing withdrawals hinder quick purchases of cryptocurrency, lowering supply and potentially leading to price increases.
Long-Term Trends and Structural Shifts
Average net outflows of Bitcoin remain negative, confirming a sustained reduction in available trading volume. This supports the current price rise, as the expected demand remains stable.
Price Correlation and Flows
Bitcoin price movements are closely tied to outflow patterns. Key inflection points in outflows, such as on February 27 and March 9, preceded bullish trends. The less Bitcoin available on exchanges, the stronger price support is in the face of growing demand.
The decline in Bitcoin liquidity on centralized exchanges indicates investors' tendencies towards long-term holdings, which in turn creates favorable conditions for further price growth.
