Outside Source
Bitcoin (BTC) investors are moving their assets out of crypto exchanges at an increasing rate. An analysis from on-chain intelligence platform CryptoQuant revealed that over the past few days, exchanges have witnessed a rising outflow of BTC, even though the leading digital currency has been in a fluctuation area since February.
While the outflows from exchanges continue, new BTC addresses are on the rise daily.
CryptoQuant’s analysts say the uptick in bitcoin outflow can be a positive signal for the possibility of a BTC price increase and the asset’s exit from the fluctuation area in the future.
Investors Withdraw BTC From Exchanges
The surge in BTC withdrawals from exchanges could be linked to investors’ preparations for the second leg of the bull cycle, which is expected to kickstart towards the end of the year. It also suggests an accumulation period for BTC investors as they position themselves to partake in bitcoin’s gains in the coming weeks.
The 35% rise in daily new addresses is proof that BTC investors could be accumulating. Market intelligence platform IntoTheBlock revealed that bitcoin plunged to multi-year lows in daily new addresses at the beginning of June; however, the trend has reversed recently.
Although the BTC withdrawals from exchanges and the rise in new addresses are positive factors, some on-chain indicators suggest that a BTC price correction is imminent. One such is the Coinbase Premium Index (CPI), which is below its Simple Moving Average over 14 days (SMA14).
Bitcoin Sellers Have the Upper Hand
A separate CryptoQuant analysis explained that the CPI is currently at -0.008 and the SMA14 is at 0.020, indicating that sellers have a stronger hand in the United States crypto market. Selling pressure on BTC often intensifies when the CPI falls below its SMA14, per 2024 on-chain data, and this usually triggers price corrections.
“Especially after the approval of Spot ETFs in the US, the CPI data has become a much more effective leading indicator for price tracking. I find using the CPI data in conjunction with the SMA14 to be more successful for monitoring short-term trends,” CryptoQuant analyst Burak Kesmeci said.
At the time of writing, BTC had fallen significantly from the $70,000 region, which it touched earlier this week, and was changing hands at $65,900.
This article first appeared at CryptoPotato
