Why bitcoins flooded to exchanges again – for the first time in six months

Why bitcoins flooded to exchanges again – for the first time in six months

HOW TO PAY ZERO IN BITCOIN & CRYPTOCURRENCY TAXES BY MOVING TO PUERTO RICO. CRYPTO CPA EXPLAINS

Contents

Why bitcoins flooded to exchanges again – for the first time in six months
CONTENT

  • Bitcoin inflow to exchanges has exceeded the outflow rate this month.

  • This marked the reversal of an almost half-year trend..

  • This may be due to the intensified exchange of bitcoins for altcoins.

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Investors started pumping bitcoins back to crypto exchanges. For the first time since January this year, the volume of military-technical cooperation entering trading floors exceeded the churn rate.

Why bitcoins flooded to exchanges again - for the first time in six months

 The flow of military-technical cooperation changed direction

According to the results of the latest report of the analytical service Glassnode, in July of this year (as of July 19), the volume of bitcoins entering cryptocurrency trading platforms, for the first time since January, exceeded the figure for BTC withdrawn from exchanges. It is noteworthy that before that, for almost half a year, the outflow of bitcoins from crypto exchanges consistently exceeded their inflow.

So, in March, when the coronavirus pandemic provoked massive panic in the markets, and bitcoin fell in price by almost half, about 92 thousand bitcoins were withdrawn from crypto exchanges. According to Glassnode, this was the maximum intra-month outflow of funds from trading floors. In May, Glassnode experts started talking about the largest and longest in the history of bitcoin downtrend in the balance of BTC on exchanges.

The BeInCrypto editorial staff also talked about earlier that investors are massively withdrawing bitcoins from exchanges amid general uncertainty in the market..

Why bitcoins flooded to exchanges again - for the first time in six months

What can a change in the situation with the inflow / outflow of cryptocurrency deposits on exchanges signal? Join the discussion in our Telegram channel – and you will find out everything!

Bearish sign for bitcoin?

In the spring, analysts at Glassnode viewed the current situation as potentially bullish for Bitcoin’s prospects. They attributed this to the fact that the withdrawal of coins from exchange accounts and their transfer to cold storage indicates the desire of investors to switch to longer-term strategies for owning coins. In theory, this could serve as an indicator of trust in Bitcoin..

Now we are seeing exactly the opposite situation. Accordingly, it can be regarded as a bearish signal and a desire to dump your coins in the market. However, a number of analysts believe that the situation is not so straightforward and is not concentrated exclusively on bitcoin itself..

Perhaps it’s more of a massive increase in interest in altcoins lately. Suffice it to recall just two stories in July, when the Dogecoin course twice staged an aggressive rally – once because of the viral challenge on TikTok, and the second because of a joke picture posted by Elon Musk on Twitter.

“It’s not about you…”

In addition to some curious cases, interest in the altcoin segment is constantly fueled by such key factors as the boom in the DeFi application segment and the associated growth in demand for stablecoins. This may determine the current return of bitcoins to exchanges – for their exchange for altcoins.

Indirectly, this trend can be confirmed by a decrease in bitcoin dominance index.Earlier, we have already talked about the forecast of the lead developer of Blockchair, who predicted that MTC dominance index it will no longer be possible to recover above the 66% mark, and bitcoin itself will lose its status as the main cryptocurrency in the world.

In particular, recently hype around DeFiDecentralized finance (DeFi) – this is financial services, built on blockchain technology, which offer users access to open, efficient and … More was largely driven by the launch of two new DeFi coins, including the acclaimed Compound. Most of the DeFi protocols are developed on the basis of the Ethereum blockchain, which encourages members of the crypto community to upload bitcoins to exchanges and convert them to DeFi tokens..

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