- Bitcoin outflows from exchanges last week reached an all-time high.
- This might be a sign that the market is about to bottom out.
- It is evident that waning trust in centralized crypto exchanges is at its high.
The withdrawal of Bitcoin from exchanges has risen to its greatest level in history during the last week. This is according to the Netflow chart of the exchanges. Allegedly, this could be a sign that the market is about to bottom out.
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According to data analytics firm, Glassnode, there has been a spike in withdrawals to self-custody wallets. In a tweet this month, Glassnode reported that Bitcoin exchange outflows had hit near historic levels of 106,000 BTC per month.
According to Glassnode, this only occurred three additional times: from June to July 2022, April 2022, and November 2020.
Exchange outflows often indicate that BTC is being held for the long term, which is positive. In this instance, though, it seems to be the outcome of waning trust in centralized crypto exchanges.
As Glassnode noted, “positive balance changes across all wallet cohorts, from shrimp to whales” have been brought about by outflows, the site continued:
“The failure of FTX has created a very distinct change in Bitcoin holder behavior across all cohorts.”
Since the FTX scandal broke on November 6, balance changes have grown for all sizes of Bitcoin wallets. This includes “shrimps” (wallets with fewer than one coin) seeing an increase of 33,700 BTC. The surge of 3,600 BTC in whale wallets with more than 1,000 coins shows that the self-custodian movement is spreading to all markets.
Leaders in the industry are increasingly pushing for self-custody. This comes amid options as the maxim “not your keys, not your coins” has more significance than ever.
On November 13, Ethereum expert Anthony Sassano remarked that unless they are regularly trading significant quantities, cryptocurrency owners shouldn’t be holding their assets on centralized exchanges.
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