Bitcoin (BTC) withdrawals from exchanges reach unprecedented levels as BTC price aims for record highs, indicating increased investor demand and potential supply shortage.
Bitcoin (BTC) is experiencing a rapid decrease in its presence on exchanges as its price reaches for new highs.
According to a recent post on X dated March 3, James Van Straten, a research and data analyst at CryptoSlate, highlighted substantial withdrawals of BTC.
Similar Trends to 2021
While mainstream investors may not have fully re-entered the crypto market, Bitcoin exchanges are witnessing significant reductions in their BTC reserves.
Citing data from Glassnode, Van Straten pointed out that on March 1 alone, withdrawals amounted to approximately $2 billion.
“I haven't seen anything quite like this before,” he remarked.
“Overall, over $2.3B worth of Bitcoin left exchanges on Friday, marking one of the largest withdrawals in over 5 years.”
According to Glassnode, the daily BTC outflows are nearly comparable to those of June 28–29, 2021, which saw record withdrawals.
Van Straten highlighted the impact of United States spot Bitcoin exchange-traded funds (ETFs), with around $200 million routed to custodian Coinbase Pro.
“Binance recorded about $400M in withdrawals and has been experiencing significant outflows for the past few days,” he added.
“The noteworthy aspect is the outflows from Binance, which are unrelated to the ETF.”
According to Glassnode, the total BTC assets available on the major trading platforms it monitors stood at 2,286,347 BTC ($142.5 billion) as of March 2.
This marks the lowest amount since March 2018, when BTC/USD traded at just $8,000.
New Entrants in the Bitcoin Market
Meanwhile, data tracking Bitcoin market composition indicates the entry of new entities into the market.
In a recent market update, Crypto Dan, a contributor to the on-chain analytics platform CrryptoQuant, observed changes in unspent transaction output (UTXO) ages.
There is a higher involvement of “younger” coins, with previously dormant coins — inactive for six months or more — becoming active.
“Fresh investors are entering the market, and we anticipate the arrival of many new ‘individual’ investors in the near future,” he summarized.
“This trend is expected to continue, leading to the desired ‘true bull market.’”
It is essential to note that this article does not provide investment advice or recommendations. All investment and trading decisions involve risks, and readers should conduct their own research before making any decisions.