Total exchange Bitcoin inflows is net negative since July 2021

According to the latest data from Glassnode, Bitcoin inflows across multiple exchanges have been a net negative starting July 2021. However, a contrary trend has been witnessed where the four major exchanges are concerned.

Crypto exchanges including Binance, Bittrex, Bitfinex and FTX have recorded net positive inflows of 207,000 Bitcoin (BTC), and over the same timespan, the net outflows have totalled 253,000 BTC from several other exchanges that were tracked by Glassnode.

Data newsletter from Glassnode shows that there have been total net outflows of 46,000 BTC (about $1.8 billion at current prices) from all crypto exchanges since July 2021.

FTX and Huobi have also been experiencing the most dramatic shift in their Bitcoin holdings since last year July. While FTX has tripled the number of its Bitcoin holdings to 103,200 on March 2022; Huobi’s holdings have recorded a shutdown at 12,300 BTC, which is around 6 per cent of what it had previously held, from over 400,000 BTC in March 2020.

The newsletter found that net outflows have usually been consistent since last year, barring a few major spikes occurring in August 2021 and then on Jan 11, 2022.

However, Glassnode has stated the reason for current relatively low inflows might be “the scale of market uncertainty”, suggesting that in general, the crypto trading market has shifted towards derivatives trading over spot sells in order to hedge risk.

Usually, exchange inflows are measured for assisting create a better understanding of whether investors are preparing to liquidate or hodl their coins. Net inflows reflect incoming selling pressure, whereas net outflows indicate more hodling.

The coins that are remaining on-chain have maintained a realized price of $24,100 per Bitcoin, thus suggesting that most hodlers have enjoyed a profit margin of 63 per cent. Realized price was the average price of all the combined coins when they wehad been moved on-chain.

The realized price is contrastingly different from implied price of $39,200. The implied price is actually the estimated fair value price per coin, which is presently only below break-even as Bitcoin had been trading at $38,346 while writing this piece.

At present, short-term holders are underwater by about 15 per cent as the average price of coins that have shifted on-chain in the last 155 days is $46,400, Glassnode noted.

Adding to the low volume of inflows and outflows is the profit and loss (PnL) ratio of sellers that have been recorded to be demonstrably flattening since 2021 had started. Glassnode has implied that long-term holders (LTH) are gradually growing tired of selling even though they are still awaiting to see a major LTH capitulation event as one that had been seen at previous cyclical bottoms.

The newsletter from Glassnode has also warned that there still remains the risk of a “final and complete capitulation of both STH and LTH” that had recorded happened at the bottom of previous cycle bottoms.

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