On-chain data shows a tendency in theย present Bitcoinย (BTC) cycle thatโs different from the pattern followed forย theย past epochs.
More Bitcoinย (BTC) Has Left Exchanges During The Current Cycle So Far
Reportsย by data from the on-chain analytics company Glassnode, the previous cycles saw the balance on exchanges register a net increase. The โbalance on exchangesโ here refers to the total amount of Bitcoinย (BTC) thatโs asย ofย now sitting in the wallets of all centralized exchanges.
Andย once the value of this metric goes up, it means the investors are depositing a net number of coins to these platforms asย ofย now. On the other hand, a decline suggestsย that withdrawals are occurring in the market right now.
Here is a chart that shows how the value of this Bitcoinย (BTC) indicator has changed during the last two cycles and in theย present epoch so far:
Looks like theย present cycle is showing a different tendency than what was seen before | Source: Glassnode on Twitter
Glassnode has taken the โhalvingsโ as the starting point of each of the cycles or epochs here. Halvings are periodic events where the block bonus of the miners (which they receive for solving blocks on the network) are permanently cut in half. These take place approximately every four years.
These events have wide-reaching consequences for the economics of the digitalย currency, as the production price of the investment is constrained following them. This narrative behind the halvings is likewise so strong that the height of the bull runs has always tookย place after them.
From the over graph, itโs visible that during epoch 2, that is, the Second cycle that the investment observed, the Bitcoinย (BTC) balance on exchanges saw a net growth of 1.02 Million BTC. Theย following cycle, epoch 3, saw the metric growing by 1.97 Million BTC, which is almost double what the previous cycle registered.
Note that epoch 1 is absent here because it was the 1st time ever that the investment was trading, and hence, Bitcoin exchanges were likewise only a new existence. Thisย implies that their supply could have only gone up here, as it previously didnโt exist at all.
Inย contrastย toย these cycles, onย theย otherย hand, where the exchanges received a large number of net inflows, theย present epoch has seen investors taking out around 680,000 Bitcoin from these platforms.
The below chart outlines how this decline in the Bitcoinย (BTC) balance on exchanges has taken place.
The value of the metric appearsย to have been going down overย recentย months | Source: Glassnode on Twitter
As displayed in the over graph, the Bitcoinย (BTC) balance on exchanges hit a peak value of 3.2 Million Bitcoin just before the COVID collapse tookย place back in March 2020.
โRetrospectively, the Covid Crisis appeared to be a catalyst for an inflection in participant interaction with exchanges, marking the inauguration of a macro decline in Exchange Balances,โ notes Glassnode.
Today, the indicatorโs value stands at 2.3 Million BTC, which suggests a decline of 28 percent from the peak. This cycle is out of the ordinary in terms of this metric, but itโs worth notingย that the epoch is isย still to end.
Nonetheless, itโs nonetheless unlikely that a reversal could take place now to keep theย present cycle in line with the pattern from the previous cycles, as theย following halving isnโt that far anymore (2024).
Bitcoin Price
Atย theย timeย ofย publication, Bitcoinย (BTC) is trading around $26,700, up 1 percent in the last week.
Bitcoin has plunged in the past day | Source: BTCUSD on TradingView
Featured image from iStock.com, charts from TradingView.com, Glassnode.com
