$740 million in Bitcoin exits exchanges, the largest outflow since June’s BTC price crash
The amount of Bitcoin (BTC) flowing out of cryptocurrency exchanges picked up on October 18, suggesting a weakened selling pressure that could help the BTC price avoid a deeper correction below $18,000.
Bitcoin Forms a ‘Bear Market Floor’
Over 37,800 BTC left crypto exchanges on October 18, according to data tracked by CryptoQuant. This marks the largest daily outflow of Bitcoin since June 17, when traders withdrew nearly 68,000 BTC from exchanges.
Also, over 121,000 BTC, or nearly $2.4 billion at current prices, have left exchanges in the past 30 days.
An increase in Bitcoin outflows from exchanges is usually seen as a bullish signal because traders are removing the coins from the platforms they want to hold. Conversely, a jump in Bitcoin inflows to exchanges is usually considered bearish given that the supply immediately available for sale increases.
For example, Bitcoin bottomed locally at around $18,000 when outflows from exchanges reached nearly 68,000 BTC on June 17. The cryptocurrency’s price rose towards $24,500 in the following weeks.
This time, the massive surge in Bitcoin outflows from exchanges is surfacing as the BTC price decline stops within the $18,000-$20,000 range.
Interestingly, Bitcoin whales, or units with over 1,000 BTC, have mainly been behind the coin’s strong foothold near the $18,000 level, according to several on-chain calculations.
For example, the accumulation trend score by Cohort notes that the wallets with between 1,000 BTC and 10,000 BTC have been accumulating Bitcoin “aggressively” since the end of September.
In addition, the whales’ on-chain behavior shows that they have recently withdrawn 15,700 BTC from exchanges, the largest outflow since June 2022.
“Bitcoin prices have shown remarkable relative strength recently amid a highly volatile traditional market backdrop,” Glassnode noted in its weekly review published on October 10, adding:
“Several macros indicate that Bitcoin investors are establishing what could be a bear market floor, with many similarities to previous cycle lows.”
Positive BTC fund inflows
Meanwhile, Bitcoin-based investment vehicles have also seen their fifth week of consistent inflows, according to CoinShare’s weekly report.
About $8.8 million entered Bitcoin funds in the week ending Oct. 14, pushing the net capital received by those funds to $291 million on a year-to-date timeframe. CoinShares head of research James Butterfill said the indications imply a “net neutral sentiment among investors” towards Bitcoin.
On the flip side, Bitcoin’s technical outlook remains in favor of the bears, given the formation of what appears to be an inverted cup-and-handle pattern on the three-day chart.
Related: Bitcoin price ‘easy’ due to reach $2M in six years – Larry Lepard
An inverted cup-and-handle pattern forms when price undergoes a crescent-shaped rally and correction followed by a less extreme retracement to the upside. It resolves after the price breaks below the neck and falls by as much as the distance between the cup’s top and neck.
Bitcoin’s price could fall towards $14,000 if the inverted cup and handle plays out as mentioned, consistent with previous reports, or a 30% drop from current price levels.
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