Despite the recent correction in which Bitcoin lost nearly 20% of its value in a week, the data suggests that the liquidity crunch could intensify.
In just three days, the exchanges witnessed the withdrawal of more than 23,000 bitcoins, worth more than $1.3 billion.
Withdrawing $1.3 billion worth of Bitcoin from exchanges in three days:
Citing data from blockchain analytics firm Glassnode, crypto analyst Ali Martinez explained recent bitcoin withdrawals from cryptocurrency exchanges.
When the #Bitcoin Market experiences a large sell-off, the change in profitable supply indicates of how many coins have an on-chain cost basis above the current price.
Since the ATH, over 17% of the $BTC supply has fallen underwater, leaving 83% of the supply in profit.
— glassnode (@glassnode) November 19, 2021
From what Ali explained:
The information revealed that the number of withdrawals has seen a huge increase in the past several days regardless of the drop in the price of Bitcoin.
In all, more than 23,000 bitcoins have been moved from the exchanges.
This coincided with recent reports that one of the biggest bitcoin whales has resumed its buying spree, accumulating more than $200 million from the original in days.
The total amount withdrawn from trading platforms is still much greater than the purchases of these particular whales, which means that some withdrawals may be internal transfers.
However, this still means that the number of bitcoins on the exchanges has dropped significantly in a matter of days, which will reduce selling pressure.
Bitcoin Investors Winning:
Bitcoin has seen a massive correction since it peaked early last week at $69,000.
In about ten days, Bitcoin lost 20% of its value and fell below $56,000 earlier today.
As expected to some extent, this hurt investors and their positions.
Further data from the analytics firm revealed that more than 17% of the total Bitcoin supply is at a loss, which means that 83% is left in profit.
This has not deterred long-term holders of Bitcoin from continuing to hold their coins.
Glassnode explained that these investors refused to panic and sell their cryptocurrencies, and what was stated in its post:
After peaking at 13.5 million bitcoins, long bitcoin holders distributed 100,000 bitcoins over the past month, representing just 0.7% of their total holdings.
Glassnode confirmed that most of the purchases that came with Bitcoin reaching its peak came from short-term owners, and they are now exposed to unrealized losses.
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