The quantity of bitcoin (BTC) being held on exchanges has been on a gentle decline for the reason that bear market began in 2022, however the rate at which investors were pulling their cryptocurrencies off exchanges has accelerated within the last couple of months. This has resulted in considered one of the sharpest drops within the percent of BTC supply left on centralized exchanges.

Bitco

In a brand new report by on-chain data aggregator Santiment, the bitcoin held on exchanges has witnessed considered one of the sharpest declines in history. In January 2022, the BTC held on exchanges accounted for around 11.85% of the full supply, but now, a yr later, it has dropped to simply 6.65% of the provision left on exchanges.

This can be a results of the increasing distrust of centralized exchanges following the collapse of FTX, considered one of the most important crypto exchanges on the time. Self-custody gained more prominence when the exchange filed for bankruptcy, prompting more supply than normal to flow out of exchanges.

Over time, some exchanges have been hit harder than others with regards to withdrawals. A variety of this is determined by the quantity of distrust circulating around different exchanges, with some like Kraken seeing 59% of total BTC held on the exchange flowing out in a one-year period.

Coinbase and Bitfinex emerged as among the hardest-hit exchanges with outflows of 33% and 32%, respectively. Coinbase’s outflows got here amid insolvency rumors which have since been debunked by the exchange.

Other exchanges include KuCoin seeing 32% of BTC holdings flow out, in addition to Binance which is currently holding 25% less BTC than it did a yr ago. Bitstamp was the bottom amongst the big exchanges, holding about 23% less BTC than it did in early 2022.

BTC on centalized exchanges falls to six.65% of supply | Source: Santiment

Will This Push Up the BTC Price?

With a lot bitcoin leaving centralized exchanges, it points to 1 phenomenon and that’s the indisputable fact that investors are accumulating their coins. Moreover, with more investors selecting to self-custody their BTC, it leaves much less supply energetic on exchanges which might be able to be sold.

This has worked out to cut back the selling pressure on the digital asset over the past couple of months. It’s also evident within the strength of the present rally as BTC has been in a position to hold its position right above $21,000. The less bitcoin on centralized exchanges, the lower the available selling supply, allowing for demand to catch up and even overtake supply.

BTC rally slows down | Source: BTCUSD on TradingView.com

As demand rises following less available BTC on centralized exchanges, BTC’s price will proceed to rise together with it. This might see the digital asset testing the $22,000 resistance level before the week runs out.

BTC is currently trading at $21,231. The cryptocurrency’s price is up over 21% within the last week, successfully pushing its market cap above $400 billion over again.

Follow Best Owie on Twitter for market insights, updates, and the occasional funny tweet… Featured image from Yahoo Finance, chart from TradingView.com