On-chain data shows that the Bitcoin balance on exchanges has been reducing significantly over the past few weeks. This suggests a growing level of accumulation or self-custody.
The aggregate amount of BTC deposits to crypto exchanges has declined likewise net withdrawals. Overall, the balance on crypto exchanges has seen an aggregate outflow of -750k BTC since March 2020, of which 142.5k BTC was moved within the past three months.
The data shows that large (Whales) and small (Shrimps) investors are aggressively accumulating BTC. The supply held by whales (10k+ BTC) and shrimps (<1 BTC) increased as the exchange supply dropped.
The rate of BTC accumulation among the smallest addresses has reportedly increased to 60.46k BTC per month. This is “the most aggressive rate in history,” according to Glassnode.
Both small and large Bitcoin investors believe that capitulation has already taken place; hence, it’s time to buy BTC. “It appears that a near-complete purge of market tourism has taken place,” Glassnode says.
Conclusively, the declining BTC balance on exchange attests to increased self-custody and accumulation. The data paints a bullish picture because it means BTC is becoming quite scarce, which is a good metric for an asset.
Bitcoin is currently trading below $20,000. The market capitalization has significantly dropped to $374 billion from $875 billion in January.