Bitcoin stored in wallets associated with centralized cryptocurrency exchanges is experiencing its most significant increase since May, suggesting a potential temporary halt in the bull market.
According to data from blockchain analytics firm Glassnode, the metric for bitcoin exchange net position change has surged to 31,382.43 BTC ($1.16 billion) on Sunday. This marks the highest level since May 11, 2023, and has contributed to the total balance on exchanges reaching 2.35 million BTC.
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Typically, an influx into exchange wallets indicates investors’ intentions to either sell their holdings, creating potential selling pressure, or use the coins as a margin in futures and options markets. Conversely, an outflow suggests accumulation.
The positive trend in BTC exchange net position change has been consistent since November 1. Historically, such periods have coincided with pauses in bull markets or temporary price pullbacks.
However, it’s important to note that the recent increase in inflow might also signify renewed investor confidence in centralized exchanges. Last year, concerns about the safety of coins held in exchange wallets arose after the collapse of Sam Bankman Fried’s FTX exchange, which was then the third-largest. This event led many investors to move their coins from exchanges to their direct custody.
As of now, Bitcoin is trading at $37,170, after reaching a high of $37,517 late on Sunday. The cryptocurrency, which saw support from Javier Milei’s victory in Argentina’s Presidential elections, has experienced a 7.5% gain this month, following a 28% increase in October.
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