Bitcoin Exchange Outflows Surge, Signaling Potential Price Rally

So far, September has proven to be a month of significant volatility for bitcoin, witnessing multiple fluctuations, including yesterday’s remarkable jump past $58,000.

There are indications that BTC might be poised for another surge, as outflows from exchanges have recently reached a multi-month high.

$750M in Withdrawals

According to data from IntoTheBlock, September 10 recorded the highest level of BTC withdrawals from trading platforms since May, marking a four-month high for this metric. With bitcoin reserves on exchanges declining, the immediate selling pressure on the asset diminishes, which is generally seen as a bullish indicator.

In fact, IntoTheBlock’s data illustrates that the last occasion when such a significant portion of the bitcoin supply was withdrawn from trading platforms (in late May) was accompanied by a price increase, with the asset soaring from below $68,000 to $72,000 in just a few days.

Conversely, the considerable inflows in late July resulted in a price drop that saw the cryptocurrency fall from over $68,000 to below $64,000. Additionally, BTC’s value dropped further in early August, hitting a multi-month low of under $50,000.

Therefore, the recent withdrawals might indicate even more upward momentum ahead. BTC’s price has already rebounded from the post-CPI dip to $55,500 and is now hovering above $58,000 in anticipation of next week’s upcoming FOMC meeting in the States.

Yesterday marked the largest net Bitcoin outflow from exchanges since May, totaling a net outflow of $750 million.

This indicates significant accumulation by $BTC holders pic.twitter.com/dA2Rvv6MGA

— IntoTheBlock (@intotheblock) September 11, 2024

Beyond the decreasing exchange reserves, the increase in stablecoins ready for deployment may also drive a price surge for bitcoin or other altcoins.

ETF Landscape

While investors withdrew $750 million worth of bitcoin from exchanges on September 10, the same day saw $117 million in net inflows to spot BTC ETFs. This was the largest net inflow day since August 26.

However, the trend shifted again on September 11, with investors withdrawing a total of $43.9 million from these financial products. Ark Invest’s ARKB experienced the most significant impact with $54 million in withdrawals, while Fidelity’s FBTC gained $12.6 million.