Despite the current price drop below the $40K level this week, large Bitcoin owners have continued to accumulation and holding of the asset.
In the past few days alone, nearly 26K bitcoins were moved out of crypto exchanges, says crypto data analysis firm Santiment. This is the largest number of bitcoins transferred to private wallets in the prior five weeks.
According to Santiment, large quantities of Bitcoins being withdrawn from trading platforms typically leads to price surges.
As seen from Santiment’s data, Bitcoin’s price rose by approximately 25% the two previous times this year that massive Bitcoin outflows from exchanges were witnessed.
Data from crypto analysis firm Glassnode further reinforces the insights from Santiment regarding subsequent positive market sentiment.
As Glassnode’s co-founders reported, Bitcoin’s has adoption increased and new Bitcoin participants are regularly entering the market. Furthermore, the Bitcoin market is accordingly growing at a faster rate than investors are selling or taking in profits.
“On-chain data shows a continuing accumulation phase with short-term holders expanding their investment horizon,” says Glassnode.
Outflows Caused by Profit-Taking
On the other hand, the beginning of April marked one of the biggest outflows from Bitcoin-focused funds since January. Nearly $132 million was withdrawn from the funds right as the price of BTC started its climb from $38K to $48K, which saw the majority of investors take profits.
According to Glassnode, Bitcoin’s fundamentals are strong despite the price drop which coincided with the FED’s decision to increase interest rates, and also in relation to broader economic and geopolitical uncertainties.
“Bitcoin’s price action is being driven by increased speculation created on exchanges,” highlighted Glassnode.
As Bitcoin’s positive correlation with stock market indexes continues, movements in stock markets are becoming consistently reflected in Bitcoin’s price changes.