Bitcoin has made a big price leap this week with its price rising to over $11,000 from just above $9,000. Despite this remarkable surge, the Bitcoin balance on exchanges has not changed. The balance remains at 14.5% of the circulating supply according to the on-chain data analytics platform Glassnode. This suggests that no deposits are being made on exchange accounts.
There have been huge withdrawals of Bitcoin from exchanges in 2020 before and even after the halving in May. The last major withdrawal was close to $220 million worth of Bitcoin taken off Coinbase alone in one day. This has significantly reduced the number of Bitcoins on exchanges and the trend doesn’t seem to be changing yet.
Bitcoin whales expecting a further rise
The rally in the last few days is the biggest in the year 2020, but Bitcoin whales are expecting a higher rise. This is the most popular explanation that has been given for the outflow from exchanges and the fact that the balance has not increased since.
If this behavior suggests optimism among investors and Bitcoin holders that a higher price is on the way, there is no better time to expect such behavior than now. Bitcoin has reached $10,000 only once in the year 2020 and was not able to sustain the price. After managing to stay above $9,000 for two months, it suddenly broke through the critical price level and now hangs around $11,000.
A crypto trader says with the current pattern, a new all-time high in 2020 isn’t far fetched. This means that it may take a while before exchanges start to recuperate from the outflows that hit them as the bullish sentiment in the space is currently too high for most people to be sending their Bitcoins to exchange wallets.
Meanwhile, the market has turned green even for altcoins. Analysts say Bitcoin will have to slow down for the altcoins to make any significant moves, therefore if the market continues to favor them, then Bitcoin may not be going much above $11,000 anytime soon. The good news is that in the short-term it is not expected to go back to a 4-figure price again either.