A massive 30,000 BTC was transferred into unknown wallets over the past week, leading many investors to wonder about the current outlook concerning Bitcoin. When big money moves into cold storage, it reduces selling pressure because it often indicates that whales and institutional investors are expecting the price to go up and opting for self-custody.
Data from CoinGlass shows that almost 30,000 BTC have been moved off exchanges in the past week. With Bitcoin currently trading around $26,000, this equates to over $780 million moved into cold storage.
Most of this movement has come from Binance, with an 11,457 BTC net change in its reserves. Coinbase, Bitfinex, and Gemini also witnessed a net exodus of 4,455 BTC, 2,808 BTC, and 6,004 BTC, respectively. In contrast to this, the crypto exchange OKX had 2,149 BTC moved into its exchange.
On-chain whale movement alerts from Whale Alerts this week have also shown various instances of BTC movement off crypto exchanges into unknown wallets:
5,140 #BTC (134,268,844 USD) transferred from #Bybit to unknown wallethttps://t.co/LWXJsbooVX
— Whale Alert (@whale_alert) August 25, 2023
2,910 #BTC (76,010,381 USD) transferred from unknown wallet to #Coinbasehttps://t.co/5bD9vpvMAE
— Whale Alert (@whale_alert) August 24, 2023
4,000 #BTC (106,039,171 USD) transferred from #Bitfinex to unknown wallethttps://t.co/982bCEb4SO
— Whale Alert (@whale_alert) August 24, 2023
Unknown wallets typically mean movement into cold storage, which refers to any method of storing crypto offline. Investors use cold wallets to hold Bitcoin long-term as a way to accumulate their assets.
For many long-term holders, this is a safer option than keeping large amounts of crypto on an exchange which could be at higher risk of hacks or scams.
Bitcoin into cold storage points to a bullish outlook from serious investors. It reduces selling pressure since the amount of BTC available for sale on exchanges has become smaller. According to the economic principles of supply and demand, the lower supply is poised to lead to higher prices.
While it’s not entirely clear what is causing this transition, the timing of this movement to cold storage is also notable. The SEC’s decision on spot Bitcoin ETF applications is imminent, and many believe that approval would lead to a spike in the price of Bitcoin. However, the regulator can still delay the applications for up to 240 days.
The price of Bitcoin has gone through a considerable dip in the past month as the market reacted to various news. At the time of writing, the cryptocurrency is trading at $26,000 and is down by 11.83% in the past month but up by 0.42% in a 7-day timeframe. This would suggest that the movement into cold storage has not had a significant effect, as the price of Bitcoin is still struggling to recover.
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