Bitcoin prices experienced a roller coaster ride in Q3, with wild swings and frequent lows. However, that hasn’t changed investors’ belief in Bitcoin either. At the end of Q3, there was a massive withdrawal of funds from centralized exchanges, resulting in an outflow of more than $600 million.
The last day of September proved to be a big trading day for Bitcoin. It was another Friday, the end of a trading week, that bitcoin investors apparently saw as a signal to move bitcoin off exchanges
Data shows that on the last day of September, investors moved 34,723 bitcoins out of centralized exchanges, equivalent to $668 million, and this trend has been getting stronger since mid-September.
This also happened at a time when the price of bitcoin fell below $20,000, and the price of bitcoin briefly topped $20,000 on Friday, which also made the withdrawal of bitcoin more obvious.
Santiment, an on-chain data aggregator, pointed out that this sets a record for the fourth largest single-day outflow of Bitcoin in 2022, while setting a new three-month record. Bitcoin holdings on centralized exchanges fell by more than 60,000 over the weekend.
For Bitcoin, a massive move out of centralized exchanges like this is always seen as a bullish indicator. Investors usually transfer bitcoins to cold wallets for long-term holding when their long-term belief in bitcoin is high, because they hold in their hearts that “no key means no currency, and the key to the currency is one” (Not your key). keys, not your coins).
The mass removal of bitcoin from exchanges represents a mass removal of the supply of bitcoin from the open market, which can lead to a tight supply. Demand for Bitcoin has also been rising, which means buying pressure has also increased.
Santiment also pointed out in the post that when the last time such a large number of cryptocurrencies moved out of exchanges, the price of Bitcoin skyrocketed by more than 22% in the following month.
Interestingly, October has always been a rising month for Bitcoin and the overall cryptocurrency market, hence the nickname “Uptober” . This means that if it rises from its current price, it could be expected to see Bitcoin price bounce up to $23,000 within the next four weeks.
However, also keep in mind that the worst of the current bear market is not over. Therefore, while a price breakout is possible, it will be difficult for Bitcoin to sustain such high levels, and if it corrects further downwards, it will make another new low.
Bitcoin is currently trading at $19,685.90, which is 10% below the 50-day moving average of $21,234. The next important resistance level is at $19,900, with support at $19,050.