The amount of Bitcoin (BTC) leaving cryptocurrency exchanges picked up momentum on Oct. 18, hinting at easing selling pressure that could help BTC price avoid a deeper correction below $18,000.
Bitcoin would be forming a “bear market floor”
More than 37,800 BTC left cryptocurrency exchanges on Oct. 18, according to data tracked by CryptoQuant. This marks the largest daily Bitcoin withdrawal since June 17, when traders withdrew nearly 68,000 BTC from exchanges.
Additionally, more than 121,000 BTC, or almost $2.4 billion at current prices, have left exchanges in the last 30 days.
An increase in Bitcoin withdrawals from exchanges is often seen as a bullish sign because traders withdraw coins they wish to hold from platforms. Conversely, an increase in Bitcoin deposits on exchanges is often seen as bearish, as it increases the supply immediately available for sale.
For example, Bitcoin bottomed out locally around $18,000 when its exchange withdrawals hit nearly 68,000 BTC on June 17. The price of the cryptocurrency rose as high as $24,500 in the weeks since.
This time around, the massive spike in Bitcoin withdrawals from exchanges comes to light as the downtrend of BTC price stops inside the range between $18,000 and $20,000.
Interestingly, Bitcoin whales, or those entities with more than 1,000 BTC, have been primarily responsible for the coin hovering near the $18,000 level, according to various on-chain metrics.
For example, the cohort accumulation trend score notes that wallets holding between 1,000 BTC and 10,000 BTC have been accumulating Bitcoin “aggressively” since the end of September.
Furthermore, the whales’ on-chain behavior shows that they have recently withdrawn 15,700 BTC from exchanges, the highest figure since June 2022.
“Bitcoin prices have shown notable relative strength of late, amid a very volatile traditional market backdrop,” Glassnode noted in its weekly review published Oct. 10, adding:
“Several macro metrics indicate that Bitcoin investors are establishing what could be a bear market bottom, with numerous similarities to previous cycle lows.”
Green numbers for BTC deposits in institutional funds
Meanwhile, Bitcoin-based investment vehicles have also seen the fifth week of steady inflows, according to the CoinShares weekly report.
Some $8.8 million went into Bitcoin funds in the week ending Oct. 14, bringing the net capital received by these funds to $291 million year-to-date. CoinShares head of research James Butterfill said that the deposits imply a “neutral net sentiment among investors” towards Bitcoin.
On the other hand, the technical outlook for Bitcoin remains favorable for the bears, given the formation of what appears to be an inverted handle cup pattern on its three-day chart.
An inverted handle cup pattern forms when price experiences a crescent-shaped rally and correction, followed by a less extreme move higher. It is resolved after the price breaks below its neckline and falls as much as the distance between the peak of the cup and the neckline.
Bitcoin price could drop to $14,000 if the cup and handle pattern plays out as mentioned, according to previous reports, or a 30% drop from current price levels.
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