On-chain data shows that the Coinbase exchange just experienced a massive Bitcoin outflow, a sign that large-scale buying could take place.
More than 16,000 BTC left the Coinbase platform in the last day
As one analyst pointed out in a CryptoQuant Quicktake job, Coinbase observed a huge outflow for the seventh time this year. The on-chain metric that interests us here is the “exchange exit“, which keeps track of the total amount of Bitcoin flowing out of wallets attached to a centralized exchange.
When the value of this metric is high, it means that investors are currently withdrawing significant amounts of money from the platform in question. Typically, holders remove their coins from the custody of these central entities when they plan to hold them for extended periods of time.
Additionally, the trend may also be a sign that these coins coming out are new purchases, so exchange outflows may have an overall bullish effect on the price of the cryptocurrency.
On the other hand, an indicator with a low value may imply that there is not much interest in purchasing the asset at the moment. Depending on the trend of the opposite measure, the trading inflow, such a value can be either bearish or neutral for the coin.
Now here is a chart that shows the trend of Bitcoin exchange outflows specifically for the Coinbase Advanced platform:
The value of the metric seems to have been quite high recently | Source: CryptoQuant
As seen in the chart above, Bitcoin exchange outflows to Coinbase saw a huge spike over the past day. A total of 16,021 BTC, worth almost $1 billion at the current exchange rate, left the platform with this release. Given the scale of the project, a large entity must be involved here.
Coinbase, in particular, is known for being the preferred exchange among American investors. institutional investors, this accumulation can therefore come from one of these traders. A more enlarged view of the chart of the same indicator shows that this is certainly not the first time that such a pullback has occurred on the platform.
Looks like the metric has registered several spikes over the past few months | Source: CryptoQuant
As the quant highlighted in the chart, Coinbase has seen Bitcoin outflows of a similar magnitude seven times over the course of 2024 so far. Some of these purchases preceded price increases, it is therefore possible that they are at least partly the instigator.
However, the most recent spikes have failed to produce any bullish effects on the cryptocurrency, so it is difficult to say whether the latest outflows would result in any sort of rally.
“There is a high probability that this transaction is an institutional purchase,” notes the analyst. “But on the other hand, it could also be an internal transfer from Coinbase.”
Naturally, if the latter reason is behind this apparent capital outflow, then the transaction would not really be relevant to the market.
Bitcoin Price
Bitcoin saw a slight jump of 1% in the last 24 hours, bringing its price down to $62,400.
The price of the coin appears to have been consolidating sideways recently | Source: BTCUSD on TradingView
Featured image by Dmytro Demidko on Unsplash.com, CryptoQuant.com, chart from TradingView.com
