Bitcoin Exchange Balance Decreases, Price Jumps

With outflows of approximately 43,000 Bitcoin in the last 10 weeks, BTC exchange supply has decreased to a record low level. Cryptocurrency exchanges now hold nearly 13.2% of the current BTC supply.

On 10 November 2021, when the price of the digital asset touched an all-time high of $69,000, crypto exchanges were holding around 13.6% of the BTC supply. The latest number indicates that crypto whales have accelerated the movement of Bitcoin from trading platforms to digital wallets.

“Bitcoin exchange balances have drawn down to multi-year lows, with a total of 42.9k BTC in outflows since the Nov ATH. This is very different in character compared to May 2021 where exchanges had 164k BTC in net inflows,” Glassnode highlighted.

As a result of the recent development on the BTC network, the price of the digital asset has experienced a decent recovery during the past 5 days. On 1 February, Bitcoin touched the price level of $39,000 for the first time since 22 January 2022. After a small correction in the following days, the cryptocurrency regained the $38,000 level on Friday.

Address Activity

Despite the reason that the world’s most valuable digital asset is still down by nearly 40% from its all-time high, Bitcoin addresses with non-zero balance have touched a new all-time high of 40.16 million. During the crypto market sell-off in May 2021, the number stood at 37.58 million.

“Retail size wallets, holding < 1BTC, also appear unfazed by this correction, with supply held in these wallets continuing to climb. The rate of supply growth for this cohort has seen two macro increases, first after March 2020, and again after May 2021. Given Bitcoin's history as a grassroots phenomenon, this speaks to a growing class of 'sat stackers' and HODLers who remain throughout all market conditions,” Glassnode added in its weekly on-chain report.

"The current upwards trajectory of non-zero wallet counts appears to be largely unaffected by the last three months of depressed prices. Interestingly, prices in the current market are declining (bearish), whilst Illiquid supply is in a marked uptick (bullish). This week alone, over 0.27% of the supply (~51k BTC) was moved from a Liquid to an Illiquid state. Within a macro bearish backdrop, this does raise the question as to whether a bullish supply divergence, similar to May-July 2021, is in effect," the company added.